Mudge v Allianz Australia Insurance Limited

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
Citation:	Mudge v Allianz Australia Insurance Limited [2022] NSWPICMR 52
ClaimanT:	Emily Mudge
Insurer:	Allianz Australia Insurance Limited
Merit Reviewer:	Katherine Ruschen
DATE OF DECISION:	8 September 2022
CATCHWORDS:	MOTOR ACCIDENTS- Dispute about payment of weekly benefits under Division 3.3 of the Motor Accident Injuries Act 2017 (2017 Act); whether the degree of permanent impairment as a result of the injury is greater than 10%, section 3.12 of the 2017 Act; cessation of weekly payments; pending claim for damages; whether weekly payments continue if there is a medical dispute under Division 7.5 of the 2017 Act; Held – the reviewable decision is affirmed.
Determinations made:	1. the reviewable decision is affirmed, and 2. the insurer is to reconsider whether the claimant’s degree of permanent impairment resulting from the injury is greater than 10% for the purpose of whether s 3.12(2)(c) applies upon receipt of the Medical Assessor’s certificate and reasons in APP-M10517786/22.

STATEMENT OF REASONS

introduction

Emily Mudge (the claimant) was involved in a motor accident on 29 May 2019.
The claimant made a claim for statutory benefits, including weekly payments.
The claimant has a pending claim for damages in relation to the motor accident.
On 10 May 2022, the insurer determined that the claimant’s degree of permanent impairment as a result of the injury is not greater than 10% and accordingly, weekly payments ceased on 5 July 2022 pursuant to s 3.12(2)(b) of the MAI Act.
The claimant requested an internal review of the insurer’s decision dated 10 May 2022.
On 7 June 2022, the insurer issued their internal review decision in which the insurer affirmed their 10 May 2022 decision that the claimant’s degree of impairment is not greater than 10%.
The claimant seeks a merit review of the internal review decision dated 7 June 2022.
The claimant also lodged an application for a medical assessment under Division 7.5 of the MAI Act disputing that her degree of permanent impairment as a result of the injury is not greater than 10%. The medical assessment application APP-M10517786/22 has not yet been determined.

SUBMISSIONS

The claimant submits that where there is a pending claim for damages and a pending medical dispute as to whether her degree of permanent impairment is greater than 10%, weekly payments should continue beyond 156 weeks, pursuant to s 3.12(2)(c) of the MAI Act.
The insurer submits that whether weekly payments should be reinstated is to be determined following the outcome of the medical dispute in APP-M10517786/22 and that s 3.12(2)(b) requires that payments cease in the meantime, based on current evidence that the claimant’s degree of permanent impairment is not greater than 10%.

REASONS

Section 3.12 of the MAI Act addresses the cessation of weekly payments to other injured persons after the maximum weekly payments period and provides that:
“(1)    An injured person is not entitled to weekly payments of statutory benefits under this Division for any period of loss of earnings or earning capacity that occurs more than the maximum weekly payment period after the motor accident concerned.
(2)     The maximum weekly payment period is as follows--
(a) 104 weeks, unless the person's injury is the subject of a pending claim for damages (whether or not the insurer has accepted liability),
(b) 156 weeks if the person's injury is the subject of such a pending claim and the degree of any permanent impairment of the injured person as a result of the injury is not greater than 10%,
(c) 260 weeks if the person's injury is the subject of such a pending claim and the degree of permanent impairment of the injured person as a result of the injury is greater than 10%.
(3)     The maximum weekly payment period ends if any such pending claim for damages is withdrawn, settled or finally determined after the period of 104 weeks after the motor accident concerned.”
The claimant was coming up to 156 weeks post-accident and accordingly, the question arose as to whether the claimant’s degree of permanent impairment as a result of the injury is greater than 10%. If it is not greater than 10%, weekly payments cease at 156 weeks pursuant to s 3.12(2)(b). If it is greater than 10%, weekly payments may continue up to 260 weeks under s 3.12(2)(c).
There is no expert medical opinion before me establishing that the claimant’s degree of permanent impairment is greater than 10%. The current available expert medical opinions are that the claimant’s degree of permanent impairment is not greater than 10%, as follows:
(a)    Dr Murray Hyde Page: 0%;
(b)    Dr Peter Whetton: 7%, and
(c)    Dr Robin Fitzsimons: 0%.
Accordingly, at present there is no evidence to support a contention that the claimant’s degree of permanent impairment as a result of the injury is greater than 10% such that she would be entitled to weekly payments after 156 weeks.
For present purposes, based on the opinions of Dr Page, Dr Whetton and Dr Fitzsimons, the claimant’s degree of permanent impairment is not greater than 10% and therefore s 3.12(2)(b) applies.
The fact that there is a medical dispute pending before the Personal Injury Commission (the Commission) regarding whether the claimant’s permanent impairment is greater than 10% does not give rise to an entitlement under s 3.12(2)(c) to have weekly payments continue beyond 156 weeks until the medical dispute is determined.
Nothing in the wording of s 3.12 permits payments to be made on any kind of interim or contingent basis, pending a medical dispute.
It is clear from the wording of s 3.12(2)(c) that the only basis upon which weekly payments can continue beyond 156 weeks where there is a pending claim for damages is if “the degree of permanent impairment of the injured person as a result of the injury is greater than 10%” (emphasis added). To be able to say the claimant’s impairment “is” greater than 10% the expert medical evidence must establish on the balance of probabilities that the claimant’s permanent impairment is in fact greater than 10%. The wording is that the impairment ‘is” greater. In other words, the permanent impairment “must be” greater than 10% as distinct from “might be”, “may be” or “could be” greater than 10% or is “yet to be determined” or is “in dispute”. None of these alternatives to the position that the impairment must be greater than 10% can be inferred from the wording of s 3.12(2)(c). Section 3.12(2)(c) is not a contingent provision, depending on the outcome of a medical despite. Nothing in the wording suggests the provision can operate based on a contingency that the claimant might be assessed as greater than 10% in the medical dispute. Instead, the wording of s 3.12(2)(c) requires a positive position to be established at 156 weeks that is, that the degree of permanent impairment “is” greater than 10%.
The claimant has the onus of proof and must therefore establish for the purpose of s 3.12(2)(c) that her permanent impairment is greater than 10%. To do this, there must be reliable expert medical evidence which establishes on the balance of probabilities that the claimant’s impairment is greater than 10%. However, the current evidence comprising the expert opinions of Dr Page, Dr Whetton and Dr Fitzsimons as to permanent impairment establishes on balance the opposite that is, that the claimant’s impairment is not greater than 10%. Accordingly, s 3.12(2)(b) is triggered by this consensus in expert opinion and therefore applies at the present time, unless and until the claimant’s permanent impairment “is” assessed as being greater than 10%. Section 3.12(2)(c), which permits payments beyond 156 weeks is only triggered if the evidence establishes on balance the impairment is greater than 10%. Otherwise, it has no work to do.
Of note, s 3.12 provides for the continuation of weekly payments (up to the specified maximum periods) if there is a “pending” claim for damages. If the legislation intended that s 3.12 also provide for the continuation of weekly payments beyond 156 weeks if there is a pending medical dispute, presumably it would have said so given it provided for “pending” damages claims.
Further, if interim payments under s 3.12 were permitted pending a medical dispute after a person is assessed as not being greater than 10% it would be problematic for the motor accident scheme, particularly in a case such as this where the current evidence establishes on the balance of probabilities that the claimant’s degree of permanent impairment is not greater than 10%. If ongoing payments were permitted pending a medical dispute, a not insignificant amount of money could be paid to a claimant resulting in an insurer being put in the position of trying to claw back the payments, if the medical dispute outcome confirms the claimant is not greater than 10%. Such circumstances are inconsistent with the objects of the MAI Act under s 1.3, which include:
(a)    to encourage early and appropriate treatment and care to achieve optimum recovery of persons from injuries sustained in motor accidents and to maximise their return to work or other activities;
(b)    to keep premiums for third-party policies affordable by … limiting benefits payable for minor injuries, and
(c)    keeping the overall costs of the scheme within reasonable bounds so as to keep premiums affordable and of promoting the recovery and return to work or other activities of those injured in motor accidents.
Interim payments to the claimant in circumstances where her permanent impairment has been assessed as not being greater than 10% may discourage the claimant from maximising her return to work and has the potential to create a financial burden on the scheme if monies are not repaid or if it is necessary for the insurer to incur additional costs to enforce repayment of the debt by the claimant. This would not assist to keep overall costs of the scheme within reasonable bounds. Of note, the objects of the MAI Act require that overall costs be kept within “reasonable” bounds. It would not be reasonable for the insurer to continue to pay weekly payments under s 3.12 beyond 156 weeks, where the current consensus among the expert medical opinions is that the claimant’s degree of permanent impairment is not greater than 10% simply because there is a medical dispute about this in circumstances where the section does not permit payment to be made on a contingent basis. To make payments unreasonably in this way, in a manner inconsistent with the evidence, would not be in keeping with the objects of the MAI Act, including that costs be kept within “reasonable” bounds.
Lastly, if a claimant is assessed as not being greater than 10% but interim weekly payments were permitted on a contingent basis, pending a medical dispute, it has the potential to open the flood gates and in turn, further burden the scheme financially. In this case, the claimant has disputed the decision her impairment is not greater than 10% even though that is the current consensus of the medical experts. Setting a precedent for interim payments pending a medical dispute in this circumstance would no doubt provide an incentive to every claimant who has been assessed as being less than 10% to lodge an application for a medical assessment regardless of the weight of the evidence or how unreasonable the challenge may be so they can extend weekly payments beyond 156 weeks pending the outcome of the medical dispute.
Of course, if the determination in APP-M10517786/22 is that the claimant’s permanent impairment is greater than 10% the insurer can reinstate weekly payments, including make-up payments in respect of any past period. Unlike the insurer at risk of being unable to claw back payments from the claimant should they become repayable, the claimant is not at risk of the insurer being unable to pay should the medical assessment be determined in her favour.
In the meantime, the language of s 3.12(2)(b) is that weekly payments cease at 156 weeks if the permanent impairment “is” not greater than 10%. There are three permanent impairment assessments, being Dr Page, Dr Whetton and Dr Fitzsimons. All three assessments conclude the claimant’s degree of permanent impairment “is” not greater than 10%.
Conversely, s 3.12(2)(c) also requires a positive position to be established that is, that the degree of permanent “is” greater than 10%. For this to be established the expert medical evidence would need to establish on balance that the claimant “is” greater than 10%. As noted in the paragraph above, this is not the case. Accordingly, the requirement of s 3.12(2)(c) that the claimant “is” greater than 10% is currently not satisfied. Section 3.12(2)(c) therefore does not arise. Instead, the provision in s 3.12(2)(b) that the claimant’s impairment “is” not greater than 10% is currently satisfied on the evidence. As such, s 3.12(2)(b) applies, and the insurer was required to cease weekly payments after 156 weeks.
Now that there is a medical dispute, s 3.12(2)(c) will only be triggered, if the medical assessment in APP-M10517786/22 determines that the claimant’s degree of permanent impairment is greater than 10%. Until and unless that occurs s 3.12(2)(c), being the only provision under which payments could continue beyond 156 weeks, does not arise.

CONCLUSION

Pursuant to s 3.12(2)(b) of the MAI Act weekly payments cease after 156 weeks if the claimant’s degree of permanent impairment as a result of the injury is not greater than 10%.
Pursuant to s 3.12(2)(c) weekly payments may only continue beyond 156 weeks if the degree of permanent impairment is greater than 10%.
There is no evidence to establish on balance that the claimant’s degree of permanent impairment is greater than 10%. Accordingly, s 3.12(2)(c) is not triggered. On the other hand, the evidence establishes the claimant is not greater than 10% and accordingly, s 3.12(2)(b) applies. Whilst there is a pending medical dispute, nothing in the language of the MAI Act permits payments to continue beyond 156 weeks on a contingent basis in case the medical dispute is determined in the claimant’s favour.
Unless and until the appointed Medical Assessor determines the claimant’s degree of permanent impairment is greater than 10% in APP-M10517786/22 the claimant’s degree of permanent impairment is not greater than 10%, as established by the current evidence and s 3.12(2)(b) therefore applies.
The insurer’s decision to cease payments after 156 weeks under s 3.12(2)(b) was therefore correct at the time and continues to be the correct decision, pending determination of the medical dispute.
Accordingly:
(a) the reviewable decision is affirmed, and
(b) the insurer is to reconsider whether the claimant’s degree of permanent impairment resulting from the injury is greater than 10% for the purpose of whether s 3.12(2)(c) applies upon receipt of the medical assessor’s certificate and reasons in APP-M10517786/22.

LEGISLATION AND GUIDELINES

In making this decision, I have considered the following:
·     the Application, Reply and supporting documentation;
·     MAI Act;
·     Motor Accident Guidelines, and
· Motor Accident Injuries Regulation.

[2022] NSWPICMR 52

8 September 2022