QBE Insurance (Australia) Limited v Hitchco
[2024] NSWPIC 577
•17 October 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | QBE Insurance (Australia) Limited v Hitchco [2024] NSWPIC 577 |
| CLAIMANT: | Craig Hitchco |
| INSURER: | QBE Insurance (Australia) Limited |
| MEMBER: | Maurice Castagnet |
| DATE OF DECISION: | 17 October 2024 |
CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017; approval of settlement; section 6.23; 58-year-old manual worker; damages for non-economic loss; damages for past and future economic loss; injury to left shoulder; arthroscopic debridement; requirement for revised surgery; reverse left shoulder replacement; loss of earning capacity; Held – proposed settlement of $400,000 is approved under section 6.23(2)(b). |
| DETERMINATIONS MADE: | CERTIFICATE Settlement Approval Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement sum of $400,000 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017. A statement setting out my reasons for the determination is attached to this certificate. |
STATEMENT OF REASONS
INTRODUCTION
On 14 March 2024, the claimant, Craig Hitchco made a claim for common law damages for the injuries he sustained in a motor accident on 16 February 2021.
The claimant is self-represented.
Section 6.23(2) of the Motor Accident Injuries Act 2017 (MAI Act) requires that any settlement of a claim for damages by a claimant who is self-represented be approved by Personal Injury Commission (Commission).
The parties agreed to a settlement of the claim and accordingly, on 6 August 2024, the insurer lodged an application with the Commission to have the settlement approved.
The matter was referred to me to consider the approval.
Settlement was reached on the basis that there was a reduction of damages for contributory negligence on the part of the claimant in the order of 50% for failing to exercise reasonable caution when walking on or near a roadway, and for failing to ensure his presence on the roadway was known to the insured driver, by moving into the path of a reversing vehicle.
When I explored the available evidence regarding the circumstances of the accident with the parties at a teleconference, it became apparent amongst other things, that the claimant was hit head-on by the insured vehicle, and not when it was reversing.
Following further discussions, the insurer withdrew the allegation of contributory negligence and consequently, made a revised offer of settlement in the sum of $400,000 which was accepted by the claimant. This is the proposed settlement which is now submitted for approval.
THE EVIDENCE
The claimant was 55 years old at the time of the motor accident and is now 58.
On 16 February 2021 at about 9.00pm, the claimant was walking out of the driveway onto a lane way at the back of his residence when he was struck head-on by the insured vehicle.
The NSW Ambulance Service attended the scene of the accident and conveyed the claimant to Blacktown Hospital where he remained for treatment until 17 February 2021.
According to the clinical notes of Blacktown Hospital, it was observed that the claimant had mild deformity to the left shoulder and the humerus, and mild grazing over the left knee. An X-ray of the left shoulder revealed anterior dislocation. His left shoulder joint was reduced under sedative cover and his left arm was immobilised in a sling. He was prescribed analgesic medication upon discharge.
The claimant continued with sling immobilisation for a period of two weeks. He continued treatment through his general practitioner, Dr Gayathiri Subendran who referred him for further treatment by orthopaedic surgeon, Dr Adrian Low.
Following further investigation through an MRI, Dr Low was of the opinion that there was a complete rupture of all three rotator cuff tendons in the left shoulder with associated muscle atrophy.
On 7 February 2022, Dr Low performed an arthroscopic debridement at the left shoulder with acromioplasty, biceps tenotomy and rotator cuff repair.
Post-operatively, the claimant’s left arm was again immobilised in a sling and he underwent a course of physiotherapy.
The claimant continued to complain of ongoing pain and stiffness at the left shoulder. Following a visit by the claimant on 30 February 2023, Dr Low recommended revision surgery.
On 27 March 2023, Dr Low performed a left reverse total shoulder replacement. Following surgery, the claimant again underwent a further course of physiotherapy.
On 4 March 2024, the claimant was examined by orthopaedic surgeon, Dr Raymond Wallace at the request of the insurer.
Dr Wallace assessed the claimant’s injury to the left shoulder as giving rise to a whole person impairment (WPI) of 21%. He found that there was no assessable impairment for scarring.
On the basis of Dr Wallace’s assessment of permanent impairment, the insurer conceded that the claimant was entitled to damages for non-economic loss.
Dr Wallace was of the opinion that at the time of his assessment, the claimant had regained full capacity for employment and that there was no future incapacity for employment anticipated.
The claimant was reviewed by Dr Low on 11 March 2024 and it was noted that the claimant had a reasonable actual range of movement in his left shoulder. The claimant was encouraged to continue with physiotherapy.
CONSIDERATION
In conformity with s 6.23(3) of the MAI Act, before I approve the proposed settlement, I must be satisfied that that the settlement complies with the applicable requirements of the MAI Act and the Motor Accident Guidelines (the Guidelines).[1]
[1] The reference is to Version 9.1.
The claimant’s understanding of the proposed settlement
According to cls 7.37 (c) and (d) of the Guidelines, I must be satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner and understands the nature and effect of the proposed settlement and is willing to accept it.
I conducted two teleconferences with the parties to question the claimant about these issues.
The claimant stated that he is aware that he was entitled to be represented by a lawyer with respect to his claim, but he has chosen to represent himself. He has accepted the proposed settlement of $400,000 and he would leave it up to the Commission to decide whether it is satisfactory.
The insurer confirmed that the claimant has not been paid any weekly payments of statutory benefits and accordingly, there will not be any deduction made by the insurer from the proposed settlement.
I explained to the claimant that the proposed settlement includes damages for economic loss and on that basis, Centrelink will be seeking a refund of any benefits received after the accident. The claimant indicated that he was aware that this would occur.
I explained to the claimant that once he accepts the proposed settlement, this will end his entitlement to any further claim for damages of any kind.
I explained to the claimant that because he has sustained a non-threshold injury, he is entitled to claim reasonable and necessary treatment and care expenses for life. I explained to the claimant that these claims will be managed by the insurer until 16 February 2026 and thereafter, by the Lifetime Care and Support Authority. The treatment and care benefits include costs such as medical treatment, medication, home assistance such as lawnmowing and future surgery.
The claimant reconfirmed his wish to accept the proposed settlement.
I am satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner, but he has chosen not to do so.
I am satisfied that the claimant understands the binding nature and effect of the proposed settlement and that he will be precluded from making any further claim for damages arising from the motor accident.
I am satisfied that the claimant understands that following the settlement of his claim for damages, he has ongoing rights to claim future treatment and care.
I am satisfied that the claimant is willing to accept the proposed settlement.
Is the proposed settlement just, fair and reasonable?
According to cl 7.37 (b) of the Guidelines, before I approve the proposed settlement under s 6.23(3) of the MAI Act, I must be satisfied that it is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
The proposed settlement is in the sum of $400,000 which represents damages as follows:
(a) non-economic loss – $300,000, and
(b) a buffer for past and future economic loss – $100,000.
Non-economic loss
Section 1.4 of the MAI Act defines “non-economic loss” as meaning:
(a) pain and suffering, and
(b) loss of amenities of life, and
(c) loss of expectation of life, and
(d) disfigurement.
As I have previously indicated, the claimant was 55 years of age at the time of the motor accident. He is now 58. Taking into account the claimant’s significant injuries requiring surgery, the length of stay in hospital, the past rehabilitation process, the ongoing pain and restriction of movement, the psychological effects and the impact that these injuries have had upon his activities of daily living (referred to in the claimant’s statement to the insurer), I am of the view that this allowance is within the range of damages for non-economic loss likely to be assessed by a member of the Commission.
Past and future economic loss
Section 4.5(1)(a) of the MAI Act provides that damages may be awarded for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity.
In cases such as Medlin v State Government Insurance Commission [1995] HCA 5 and Husher v Husher [1999] HCA 47, the High Court of Australia confirmed that the issue to be determined in the present case is whether the claimant has sustained a loss or diminution of his earning capacity and if so, whether that loss or diminution will result in economic loss.
In calculating any economic loss into the future, I must have regard to the provisions of
s 4.7 of the MAI Act.Section 4.7(1) of the MAI Act provides that damages may not be awarded for future economic loss unless the claimant first satisfies the court or Commission that the assumptions about future earning capacity or other events on which the award is to be based, accorded with the claimant’s most likely future circumstances but for the injury.
Section 4.7(2) of the MAI Act provides that the amount of damages for future economic loss that would have been sustained on those assumptions is to be adjusted by reference to the percentage possibility that the events concerned might have occurred but for the injury.
Section 4.7(3) of the MAI Act provides that if an award for future economic loss is made, the Court or Commission is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
Section 4.9(1) of the MAI Act provides that where an award of damages is to include compensation, assessed as a lump sum, in respect of damages for future economic loss which is referrable to deprivation or impairment of earning capacity, the present value of the future economic loss is to be qualified by adopting the prescribed discount rate. Section 4.9(2) of the MAI Act prescribes a discount rate of 5%.
Section 4.7 of the MAI Act does not preclude the awarding of a buffer for future economic loss. The occasion for a buffer in accordance with the principles enunciated in Penrith City Council v Parks [2004] NSWCA 201 is when the impact of the injury on the economic benefit from exercising earning capacity after injury is difficult to determine.
The claimant is currently 58 years of age. He intended to work until age 67. This means that the claimant has nine years left in the workforce.
According to the available evidence, the claimant worked at Precision Assembly from 2007 to 2016. This essentially entailed the provision of support services to retailers and customers to assemble flat pack furniture and items such as gym equipment, trampolines, barbecues, dollhouses, and bikes.
The claimant had not worked for a few years before and was not working at the time of the accident. He was receiving a Jobseeker allowance from Centrelink.
The claimant said that it was always his intention to go back to work and that at the time of the accident, he was actively seeking work.
The claimant indicated that after the accident, he continued to apply for jobs and attending job interviews. He said that was typically unsuccessful when he informed the prospective employer about his injury and surgery to the left shoulder.
In January 2022, he was successful in obtaining employment as an Assistant Assembler with Rhino Racks Warehouse. However, after he was medically assessed to evaluate his capacity to undertake the job, the offer of employment was withdrawn. He received wages for about two days in the sum of $412 gross.
The claimant’s tax records otherwise showed that he did not receive any income from employment after June 2017.
I consider that the claimant’s most likely future circumstances, but for the injuries, is that he would have continued to look for work as an assembler or in a similar position in a warehouse on a full-time basis until retirement. Because of his injuries, I accept that he is no longer fully fit for the normal duties of this type of employment and that he will struggle to compete for such employment on the open labour market.
In the circumstances, I am of the view that the buffer figure of $100,000 is at the low end of an amount for damages for past and future economic loss that would likely be assessed by by a member of the Commission to compensate him for long periods of time off work or for a reduced capacity to work until retirement. It represents a loss of about $250 per week for the 12 years following the accident as calculated on the 5% discount tables and deducting vicissitudes of 15%.
CONCLUSION
Having regard to all the above matters, I am satisfied that the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, the disabilities and the impairments sustained by the claimant.
The proposed settlement of the claimant’s claim for damages in the sum of $400,000 is approved under sub-s 6.23(2)(b) of the MAI Act.
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