QBE Insurance (Australia) Limited v Houseman
[2024] NSWPIC 456
•19 August 2024
| CERTIFICATE OF DETERMINATION OF MEMBER | |
| CITATION: | QBE Insurance (Australia) Limited v Houseman [2024] NSWPIC 456 |
| CLAIMANT: | Sara Houseman |
| INSURER: | QBE |
| MEMBER: | Shana Radnan |
| DATE OF DECISION: | 19 August 2024 |
| CATCHWORDS: | MOTOR ACCIDENTS - Settlement approval; 20-year-old female; non-economic loss concession; past economic loss buffer; future economic loss $600 weekly for ten years then $300 weekly thereafter to retirement; lumbar spine and psychological injuries; Held – proposed settlement is just, fair and reasonable; settlement approved. |
| DETERMINATIONS MADE: | CERTIFICATE Issued under s 6.23 of the Motor Accident Injuries Act 2017 1. The proposed settlement in the sum of $734,000 is approved under s 6.23(2)(b) of the Motor Accident Injuries Act 2017. 2. The proposed settlement complies with cl 7.392 to cl 7.411 of the Motor Accident Injuries Guidelines. |
STATEMENT OF REASONS
INTRODUCTION
Sarah Houseman (the claimant) was a 17 year old in year 11 at high school when she was involved in a motor accident. She was a passenger in a vehicle that conducted a sudden u-turn left the roadway knocking over a letterbox and collided heavily with a tree outside 143 Old Pitt Town Road at Box Hill.
An ambulance was called and the claimant was transported to Westmead Hospital on 26 January 2021 and remained in hospital until her discharge on 29 January 2021
The claimant sustained non-threshold injuries including:
(a) musculoligamentous strain to cervical and lumbar spine
(b) laceration of upper lip
(c) exacerbation of anxiety
(d) post-traumatic stress disorder.
The claimant brought a common law claim for damages dated 21 November 2022. The insurer accepted liability for the damages claim on 15 February 2023.
The parties reached an initial agreement to settle the claim in the sum of $600,000. After review of the matter and updated medical information the settlement sum was increased to $734,000. This amount represents an allowance for non-economic loss in the sum of $200,000, an allowance of $40,000 for past economic loss and $494,000 for future economic loss.
The application before me is approval of the settlement.
THE RELEVANT LAW
Sections 6.23(2) and (3) of the Motor Accident Injuries Act 2017 (MAI Act) requires approval of the settlement and I am not to approve the settlement unless I am satisfied it complies with any of the requirements of the MAI Act or the Personal Injury Commission Guidelines.
Clause 7.38 of the Guidelines states I must be satisfied as to the following:
(a) 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 a claims assessor, 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, and
(c) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement.
Preliminary conference on 13 June 2024
The conference was conducted via video-link. The circumstances of the accident, injuries received and the nature of the settlement was discussed. The claimant confirmed the injuries sustained and her understanding of the terms of settlement.
The insurer was questioned on the basis of the determination to reduce weekly losses by half in five years time and whether there was medical support for the proposed change in earning capacity.
When querying the claimant’s current work and the hours performed it became apparent that her shifts change weekly from 2.5 to 3 depending upon the impact on her symptoms of pain and whether she has had adequate sleep.
The further information provided by the claimant and her mother Terri indicated that there is differing capacity from week to week and it is dependent upon the symptoms she experiences and the work undertaken weekly. She reported that often her work aggravated her pain experienced and rest improved her symptoms.
The claimant was requested to provide to the insurer and myself details of time off work as well as lost shifts over the past 12 months where the claimant had undertaken a clerical role in a hospital setting. This was to ensure the adequacy of the amount allocated to past economic loss.
The claimant confirmed that the physical tasks involved in a position of registered nurse was compromised by her injuries and she believed she would be unable to continue studies in nursing as she could not perform the heavier practical roles. Her decision to change roles was predicated on a less active role which would avoid lifting of patients.
The claimant was to attend her medical practitioner and treating specialist to obtain further information as to the impact of her ongoing injuries long-term, the need for any surgery in the future, if any and when it is likely to take place having regard to the natural progression or deterioration of symptoms and the likelihood of any deterioration.
The insurer agreed to obtain the reports required.
At this conference the claimant advised she did not wish to seek legal representation and confirmed he understood the nature and effect of reaching a settlement. The claimant was eager to effect a settlement and it was explained to her that the additional information was a checking mechanism to ensure all medical information relevant to any assessment of damages was before me and that a short delay was appropriate.
Preliminary conference on 29 July 2024
The insurer produced the reports of Dr Lakshmanan and Dr Parkinson.
Upon discussions between the claimant’s mother and the insurer, the parties decided to increase the damages allocated to non-economic loss from $150,000 to $200,000 and future economic loss was increased to reflect a loss of $600 weekly for the next ten years with the losses for the remaining 38 year working life based on a $300 weekly loss.
As the claimant was not available due to work commitments, to provide further instruction at this time, the matter was adjourned to seek the claimant’s instructions and confirm that a new settlement sum had been reached and agreed to.
Preliminary conference on 2 August 2024
The claimant provided her understanding of the nature and effect of the reaching of a settlement.
She confirmed her willingness to accept the increased offer of settlement dated 30 July 2024 and advised that she did not wish to engage legal representation.
I was informed that the claimant did not wish to undertake any further investigations and wanted the matter concluded.
She confirmed that the statutory payments made to her by the insurer to date amounted to $2,166.91 and she was aware that such sum would be deducted from the settlement sum as it had already been paid to her.
I was requested to approve the terms of settlement agreed to between the claimant and the insurer.
DOCUMENTS CONSIDERED
I have regard to the following relevant documents contained in evidence bundle of evidence submitted by the parties:
· Liability:
(a)police report dated 8 April 2021;
(b)application for statutory benefits dated 25 April 2021;
(c)application for common law damages dated 21 November 2022;
(d)liability notice dated 15 February 2023;
(e)deed of release – dated 30 July 2024, and
(f)submissions amended by insurer dated 30 July 2024.
· Medical records:
(a)report Dr Parkinson dated 13 June 2024;
(b)report Dr Antoun 28 June 2022;
(c)report Ms Moubarak dated 28 June 2022;
(d)report Dr Lakshmana dated 18 May 2024, and
(e)certificates of fitness
· Medico-legal opinions:
(a)report Dr Wallace dated 31 May 2022 and 29 January 2024;
(b)report Dr Vickery dated 17 November 2022, and
(c)report Dr Morgans dated 23 January 2024.
· Financial records:
(a)Email dated 27 June 2024 including particulars of work hours and time off work.
· Settlement documents:
(a)offer of settlement dated 10 May 2024;
(b)amended offer of settlement dated 30 July 2024; and
(c)deed of settlement.
Injuries
The claimant’s application for common law damages noted she initially sustained the following injuries:
(a) laceration to lip requiring sutures, and
(b) whiplash – soreness in neck and back
The claimant’s injuries required treatment including surgical repair of lip laceration whilst hospitalised and bed rest. She remains conscious of her scarring to her lip.
She had one week off school immediately after the accident.
Over time the claimant exhibited symptoms of post-traumatic stress and has been prescribed anti-depressants. She has undertaken psychological treatment and recently this has been increased to provide better progress in the reduction of symptoms which include sleep disturbance.
She reports ongoing intermittent lumbar pain and this impacts upon her ability to participate in sports such as netball. Her reported neck pain resolved over time.
Her local doctor Dr Sham at Kellyville referred her for MRI scans and chiropractic treatment to assist in reduction of lumbar pain. Medication has involved use of Panadol.
At the time of the accident the claimant was in school. She had a part-time job as a waitress in a café working between 4-12 hours a week depending on rostering.
She commenced studies at Australian Catholic University after year 12 in nursing but this has to date proved difficult to complete as the practical training required has not be completed due to the heavy nature of the practical training such as lifting patients.
The claimant was examined Dr Wallace, orthopaedic surgeon, at the request of the insurer on 31 May 2022 for an initial opinion. Dr Wallace confirmed at the time that the claimant did not require any further treatment, medical review and considered stable lumbar functioning.
He confirmed that she could return to pre-accident employment as a waitress without restriction. He considered she had reached maximum medical improvement.
By way of update, his report dated 29 January 2024 noted that the claimant continued to suffer constant aching pain at the midline at L5 spinous process with no radiation to her buttocks or legs. “Her lumbar pain is worse with prolonged sitting or standing and is relieved by changing her posture or lying down She notes intermittent paraesthesia at the toes and heels of her feet bilaterally. She complains of intermittent weakness at her bilateral lower limbs and stiffness at her lumbar spine.” (p34 of bundle)
She reported to Dr Wallace a change to her studies and the commencement of a clerical role at Norwest Private Hospital working an average of 16 hours weekly.
She continues to report “her sleep is disturbed 2-3 times a week after a work shift due to ongoing lumbar spinal pain. She has difficulty in driving a motor vehicle for more than 20 minutes”
She cannot play netball and is unable to dance. There is no other reported impact on activities of daily living outside of the lifting and bending restrictions.
Conservative treatment has included use of Panadeine Forte continues to date. She attended upon Dr Hsu, Spinal surgeon, for cortico-steroid injections to relieve her spinal pain, however this has not been successful.
Further investigations were undertaken by Dr Parkinson, neurosurgeon and he recommended ongoing physiotherapy and home exercise.
Dr Wallace opined “she had a guarded prognosis for further recovery of function at her lumbar spine despite any ongoing treatment.” (p38 of bundle)
The claimant attended upon Dr Vickery for assessment of psychological evaluation on
7 November 2022. There was a history pre-existing since age 14 years, of anxiety, depression and self-harm associated with recent stressors such as parent’s divorce and later higher school certificate. It was confirmed that there had been an exacerbation of symptom post-accident and she received treatment with Dr Baperan psychiatrist.
Dr Vickery opined “There was no apparent clinically significant anxiety, melancholic depression, paranoid delusional ideation or formal thought disorder. There was no apparent cognitive impairment” (p48 of bundle). He considered a diagnosis of “adjustment disorder” rather than post-traumatic stress disorder based on her ongoing functional ability. Her symptoms do not appear to impede on her day to day functioning and there is no clear evidence her capacity is diminished.” He continued “there is no apparent psychiatric impairment noted in clinical examination”.
Reports of Ms Barnes, psychologist, noted she did not envisage any barriers to the claimant processing the trauma and alluded to “good prognosis”.
The insurer qualified Dr Morgans for an updated psychiatric assessment on 10 January 2024. The claimant at interview reported that she has now completed all academic components for her nursing qualifications and had still to complete the practical component of two weeks duration.
Dr Morgans diagnosed “major depressive disorder in partial remission with anxious distress. post-traumatic stress disorder with dissociative symptoms. She also opined that the pre-existing mental health conditions “are unrelated to her current mental health conditions” (p58 of bundle).
Dr Morgans noted that the claimant would benefit from ongoing treatment for her mental health condition. The claimant has confirmed to me in preliminary teleconferences that she intends to undertake further treatment to improve her outcome.
Impact of injuries currently upon the claimant
The claimant’s oral statement made during the video-link preliminary conferences confirmed the history provided to Drs Wallace, Morgan, and Parkinson.
Dr Lakshmana consultant psychiatrist reported on 18 May 2024 that the claimant still experiences significant distress primarily “sleep disturbance and nightmares”. Psychological intervention in the form of Eye Movement De-sensitisation and Reprocessing (EMDR) was not successful to date. “She is not currently functionally impaired with no acute deterioration in symptoms. Biopsychosocial management recommendations need to be considered over the next 12 month period… She is currently taking Quetiapine to assist with sleep management and this medication should be changed to avoid impact on daily functioning.”
She has persistent intrusive thoughts and ruminations about the accident and this heightens anxiety. She should continue with a mental health plan to undertake cognitive behaviour therapy to improve sleep hygiene and this will prove beneficial”.
She now sees Dr Nathan Taylor for pain management of her soft-tissue injuries and continues to be reviewed by Dr Richard Parkinson, neurosurgeon. In Dr Parkinson’s report dated 13 June 2024, he confirmed that she will not require surgical intervention for her symptoms.
Dr Parkinson considered her prognosis “guarded and dependent on response to pain management”.
He considered the impact on work be addressed by an occupational specialist. Whilst the claimant was provided with an opportunity to seek such advice, the claimant declined to do so, advising that she did not want to undertake any further assessments. She confirmed she wanted to take the settlement.
Dr Wallace when commenting on fitness for work opined:
“Ms Houseman would currently not be fit for activities requiring repetitive bending or twisting movements at her lumbar spine, sitting or standing in one position for prolonged periods lifting above 7.5 kilos. She is currently fit to return to work at full-time light duties with due consideration given to restrictions on her activities as detailed above”. (p38 of bundle)
Examination of radiological investigations of MRI in March 2023 and bone scan in May 2023 showed no evidence of structural pathology at the lumbar spine.
Non-economic loss
The impact of the injuries on the claimant is likely to be lifelong. The claimant’s symptoms of lumbar pain continue and this impacts her sleep and psychological well-being.
I accept that the nature of the claimant’s injuries including physical and psychological injuries will likely improve over time and with the benefit of ongoing mental health assistance.
The claimant is a young lady and her sporting activities are curtailed by lumbar pain. She cannot dance without fear of aggravating her symptoms.
Her daily activities are measured by the impact of aggravating lumbar pain and poor sleep. This is likely to remain over the remainder of her life with the impact varying if pain management can be controlled.
The insurer has made an allowance for non-economic loss whilst not conceding whole person impairment exceeded 10%. It is appropriate to make such allowance.
The parties have reached agreement that the sum of $200,000 be allowed for the impact of pain and suffering, loss of amenities of life.
I consider that the sum agreed to is within the range of damages likely to be awarded had the matter been assessed by a member of the commission.
Past economic loss
At the time of the accident the claimant was a school student working part-time in a café.
She finished school and has continued studies to attain a diploma in nursing but is yet to complete the practical training.
There is medical support for the claimant’s restrictions on the heavier type activities of bending and lifting 7.5 kilos.
The claimant now works in a clerical position with a private hospital setting and over time there may be the completion of practical training once further mental health programs are undertaken to reduce the fear avoidance difficulties.
The claimant has shown her willingness to undertake further treatment to improve her outcome.
It is accepted on the medical evidence before me that currently the claimant experiences difficulties with heavier tasks of lifting and bending and required positional breaks to avoid lumbar stiffness and pain.
The circumstances of the claimant being in year 11 at the time of the accident, then in year 12 studying for the higher school certificate and further university study provides a background of the intermittent hours she would likely have worked but for the accident and injuries subsequently sustained.
The parties have allowed for a buffer of $40,000 for past economic loss.
Having reviewed the claimant’s particulars of claim and the medical evidence before me, I consider it is appropriate for there to be a buffer as the impact of the injuries sustained have resulted in economic loss which cannot be specified in an exact weekly sum.
The buffer allowed is supported by the facts before that the claimant’s earning capacity has been restricted by the presence of her injuries and their ongoing impact affects the hours she is able to undertake with some weeks more than others.
Medical opinion in the majority confirms that the claimant has significant residual earning capacity.
I am satisfied that the past losses agreed to between the parties accords with the facts provided in medical records of time off and the financial records provided to support loss.
Future economic loss
There is medical support for the claimant’s ability to work full-time in lighter duties. The claimant is now working in a clerical position with varied hours weekly.
The claimant is currently unable to work full-time. She continues to work varied shifts weekly to support the reduction of pain.
The parties have calculated future economic loss in two stages, then next ten years and the period thereafter,
The loss is based upon a sum of $600 weekly for the next ten years and thereafter an ongoing loss for the remainder of her working life in the sum of $300 weekly to age 67 years.
From a psychological perspective the ongoing treatment undertaken into the future is likely to improve the outcome as commented upon by Dr Morgan and treating psychologists. The reports are indicative that there is likely to be further improvement is pain management can be achieved. It is likely in due course the claimant will exhibit an increased capacity if sleep disruption can be minimised. Support is found in the reports of Drs Barnes, Vickery and Parkinson that pain management is likely to improve further and the result being that there is likely to be an increased capacity.
The losses also allowed for superannuation.
I am persuaded that the current loss of earning capacity estimated at $600 weekly will likely improve over time and so the assumption that losses will be reduced after ten years is an appropriate assumption in the circumstances.
The sum allocated for future economic loss in the sum of $494,000 inclusive of superannuation entitlements accords with the most likely circumstances but for the accident and is within the likely range of damages had the matter been assessed by a member of the Commission.
The insurer, whilst calculating losses based on the weekly sums, considered the sum of $494,000 be considered a buffer in the alternative. The provision of a buffer for future economic loss is appropriate in the circumstances where an exact weekly sum is not established. I note the claimant is at the beginning of her working life and that she may change her career path a number of times depending on her life circumstances. She is hardworking and motivated to improve her station in life and this has been evidenced by her completion of nursing studies without the practical training. It may well be the case that she can enter roles less arduous once her final qualifications are obtained and her role in clinical settings may still be obtained once pain management is under control.
Insurer’s submission
It is the insurer’s submission that the proposed settlement figure is an appropriate one and complies with the requirements of clause 7.37 of the Guidelines, in 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”.
Accordingly, the insurer recommended the proposed settlement figure of $734,000 be approved. The claimant also confirmed her desire that the settlement be approved by me.
SHOULD I APPROVE THE SETTLEMENT
Section 6.23 of the MAI Act provides the following restrictions on settling claims for damages:
(a) The settlement must be approved by a Member of the Commission and I am not to approve the settlement unless I am satisfied there is complaince with any of the requirements of the MAI Act or the Motor Accident Guidelines.
I am satisfied that there has been compliance with the Act and the Guidelines.
(b) Clause 7.389 of the Guidelines requires the insurer to include in its application details of the following:
(i)sub-clause 7.389.1 requires the amount of the proposed settlement and a breakdown of the amount allowed for each head of damage.
The amount for non-economic loss is $200,000: past economic loss is $40,000; the amount for future economic loss is $474,000.
(ii)sub-clause 7.389.2 requires the amount of any deductions in the proposed settlement.
The sum of $2,166.91 has been paid to the claimant as statutory payments and this amount will be deducted from the agreed sum.
(iii)sub-clause 7.389.3 requires the amount of any advanced payments made be specified. There had not been any advanced payments made apart from known statutory benefits.
Medical expenses have been met by the insurer and these do not form part of the settlement.
(iv)sub-clause 7.389.4 requires the evidence, documents and materials relevant to an assessment of the proposed settlement figure.
I have received clinical and medical records effectively convering the period of injury and the relevant period to date. I note the medical records provided and opinions of specialists as well as the records of the claimant’s general practitioner and relevant specialists produced in the matter give me a good indication of the injuries, treatment and prognosis.
(c) Clause 7.399 of the Guidelines, requires me to consider the following:
(i)sub-clause 7.399.2: appropriateness – 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 a claims assessor, taking into account the nature and extent of the claim and injuries, disabilities impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
Having reviewed the medical evidence produced in this matter, I am satisfied that the nature of the ongoing injuries to her lumbar spine as well as her ongoing post-traumatic stress disorder have been identified and that the sum agreed for damages is just, fair and reasonable and within the likely range of damages were it to have been assessed by a Member of the Commission, and
(ii)sub-clause 7.399.3: understanding – the claimant understands the nature and effect of the proposed settlement is the finality of her claim for damages and is willing to accept the proposed settlement.
The claimant was made aware in the teleconference that in the event she took the settlement, she could not seek any further damages for non-economic losses and economic losses. She was advised that the insurer would still provide ongoing medical treatment and care needs, if required and approved by the insurer.
The claimant was also made aware that the insurer would continue to meet any charge issued by Medicare and that the insurer has agreed to reimburse Health Insurance Commission separately, if appropriate.
I am satisfied that the claimant was aware of her rights and had freely agreed to the terms of settlement with an understanding of the settlement and its implications.
CONCLUSION
I am satisfied the proposed settlement of $734,000 is just, fair and reasonable and within the range of likely potential damages assessments if the claim was to proceed to assessment by a Member of the Commission taking into account the nature and extent of the claim, the injuries, disabilities, impairments and losses sustained by the claimant and the age of the claimant.
I am satisfied the claimant was aware she could seek legal advice and but chose not to retain legal representation.
I am satisfied the claimant understands the binding nature of the settlement and that she will be precluded from making a further claim for damages arising out of the subject accident.
I am satisfied the claimant was willing to accept the proposed settlement and his decision to accept it was of his own volition.
I am satisfied the claimant is aware that $2,166.91 will be deducted from the proceeds of settlement and that she will receive $731,833.09 net.
Accordingly, pursuant to s 6.23(2(b) of the MAI Act I approve the settlement of the claimant’s claim for damages in the sum of $734,000.
The proposed settlement complies with clause 7.392 to clause 7.411 of the Motor Accident Injuries Guidelines.
Legislation
In making my decision I have considered the following legislation and guidelines:
· MAI Act;
· Motor Accident Injuries Regulation 2017, Personal Injury Commission Regulation 2020, Motor Accidents and Workers Compensation Legislation Amendment Regulation 2020, and
· Motor Accident Guidelines 2017/Personal Injury Commission Rules 2021.
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