Rymer v Allianz Insurance
[2021] NSWPICMR 45
•7 October 2021
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Rymer v Allianz Insurance [2021] NSWPICMR 45 |
| CLAIMANT: | Christophe Rymer |
| INSURER: | Allianz Insurance |
| MERIT REVIEWER: | Ray Plibersek |
| DATE OF DECISION: | 7 October 2021 |
| CATCHWORDS: | MOTOR ACCIDENTS- Medical Review Panel; reasonable and necessary spinal surgery; dispute about legal costs and expenses by the claimant; claim for exceptional circumstances legal costs; section 8.10(4)(b) of the Motor Accidents Injuries Act 2017; insurer submitted exceptional circumstances did not exist only allowed regulated legal costs ; AAI Limited v Moon and San v Rumble (No. 2) [2007] NSWCA 259 considered; Held- finding that exceptional circumstances exist; volume and complexity of the medical material; difficulty in obtaining instructions from claimant with diagnosed depression; claimant entitled to recover about 40 % of legal costs claimed as reasonable and necessary; consideration of objects of Motor Accidents Injuries Act 2017. |
| DETERMINATIONS MADE: | 1. The Insurer is to pay the Claimant’s reasonable and necessary legal costs assessed at $28,000 plus GST totalling $30,800 for solicitors costs and Counsel’s fees of $4,050 plus GST totalling $4,455. 2. This determination takes effect on 7 October 2021. |
Background
There is a dispute between the Claimant, Christophe Rymer and the Insurer about the payment of his legal costs. The Claimant solicitors are seeking $69,548.60 for their solicitors costs and $4,455 for barristers fees. The Insurer’s view is that Claimant lawyers are only entitled to a total of the maximum regulated legal costs of $1,826.
In legal terms, the issues for determination are whether under sections 8.3, 8.10 of the Motor Accident Injuries Act 2017 (the MAI Act), costs and expenses incurred by the Claimant are reasonable and necessary and whether the Claimant is entitled to be paid or recover legal costs for any legal costs beyond the maximum amount fixed by the MAI Act and Motor Accident Injuries Regulation 2017 ( the Regulation) .
The Claimant was injured in a motor vehicle accident on 8 December 2018. He was driving his motorcycle along Pittwater Road and Oliver Street, Manly.
On 12 December 2018, the Claimant lodged an application for statutory benefits with Allianz, the Insurer of the other vehicle involved in the accident.
On 19 March 2019 the Insurer issued a Liability Notice - Benefits After 26 Weeks, which advised the Claimant that in the Insurer’s opinion his injuries were minor.
The Claimant disputed the Insurer’s internal review decision on liability and lodged a review application with the Dispute Resolution Service (DRS) on 7 May 2019.
On 17 April 2019, the Claimant's treating orthopaedic surgeon, Dr Saravanja issued a request to the Insurer for approval of spinal surgery at C7-T1 Anterior Cervical Discectomy and Fusion.
In a letter dated 17 May 2019 the Insurer denied the Claimant’s request for the spinal surgery.
On 22 May 2019 the Claimant requested an internal review of the Insurer’s decision to not approve the surgery.
On 28 May 2019 the Claimant had the spinal surgery at his own cost.
On 2 July 2019 the Claimant lodged an application for review of the decision to deny the spinal surgery with the DRS. The application for review attached detailed written submissions and numerous medical reports attached to it, (AD 2).
On 2 September 2019, the Claimant was assessed by Medical Assessor Bodel.
On 9 October 2019 Assessor Bodel concluded that the injury to the Claimant’s neck and left arm and hand were non-minor injuries and that the surgery of C7-T1 Anterior Cervical Discectomy and Fusion was reasonable and necessary.
On 6 November 2019, the Insurer lodged an application for a review of the Certificate of Medical Assessor Bodel.
In detailed submissions dated 26 November 2019, the solicitor for the Claimant made detailed written submissions in reply to the application for review of a medical assessment, (AD 3).
Between about February 2020 until about August 2020 the Claimant’s solicitors supplied the Medical Review Panel with numerous documents, scans and submissions. The details of the work done by the solicitors for the Review Panel are set out in the Claimant’s solicitors submissions in paragraphs 20 to 30, (A1).
On 15 September 2020 the Claimant’s solicitors wrote to Insurer indicating they would be claiming legal costs because of the unusual degree of factual and legal complexity of the medical review.
On 3 October 2020 the Medical Review Panel decided to confirm the certificate of Medical Assessor Bodel dated 9 October 2019, (AD 1) concerning one dispute which dealt with: Treatment and Care ,Causation and Reasonable and Necessary treatment over the spinal surgery . Regarding the second dispute, which was about whether numerous injuries to the neck , spine, arms, hands , fingers and legs were Minor injury or Non-Minor injuries, the Review Panel “…revokes the Certificate of Assessor Bodel regarding the minor injuries, and issues a new certificate.”, (AD 1, page 32).
The Certificate and Reasons of the Review Panel set out in considerable detail all of the clinical notes, medical reports, x-rays and other films before the Review Panel. The Panel also referred in detail to the Claimant’s extensive history of previous medical treatments, accidents and medical procedures. The Review Panel noted that it had asked for further evidence to be provided to it. In its reasons the Panel listed all the further evidence it had requested. It listed a large number of clinical notes, records and x-ray and CT scans provided by the Claimant’s solicitors on 19, 20 and 21 May 2020. The Review Panel also commented that the Claimant’s solicitors had provided a number of medical reports and notes from Dr Davor Saravanja and imaging notes for x-rays, CT scans and MRI. The Review Panel noted that some of this documentation was “… not requested by the Panel but was considered relevant by the solicitor”, (AD 1, page 23).
The Review Panel referred some of the x-rays, CT scans and MRIs to radiologist Assessor John Korner for an opinion. Assessor Korner concluded that it was hard to say that the motor accident and subsequent treatment are not linked, (AD 1, page 22).
After reviewing all of the evidence, the Review Panel “…found that all the injuries referred to Dr Bodel for assessment were causally related to the subject accident, and most of the injuries had resolved.”, (AD 1, pages 27 and 28).
The Claimant now seeks legal costs for the preparation and conduct of the medical treatment dispute referred to above.
Submissions
The solicitors for the Claimant seek the payment of the Claimant’s “exceptional circumstances” legal costs incurred by him under sub-section 8.10 (4) (b) of the MAI Act,
(A -1).
The legal costs sought by the Claimant are for a total of $67,276 comprised of: $63,166 for solicitors professional fees; $4,050 for Counsel’s fees and $60 for clinical fees, (A -1). With GST added, the legal costs sought (excluding Counsel’s fees), are a total of $69,548.60 with GST of $6,322.60, (A 5). Counsel’s fees are $4,050 plus GST of $405 totalling $4,455, (A 6). The clinical records invoice from Dr Davor Saravanja are $60 plus GST of $6 totalling $66, (A-8).
The solicitors for the Claimant submit that under sub-section 8.10 (4) (b) of the MAI Act there is no qualification limiting the costs to the costs of the dispute, (A-1 at 36). Despite this submission, the Claimant then submits that it has limited the recovery of costs to what are effectively the costs of the dispute, (A -1 at 38).
The Claimant’s submissions then refer to the objects of the MAI Act , specifically at sub-section 1.3(2)(g), ‘to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes’. The submissions set out in great detail the work done by the solicitors, the complex medical issues of the disputes, the chronology of the work done for the Review Panel, the need to obtain a detailed clinical history of past treatments, and copies of x-rays and other films dating back a number of years, (A-1 at 46 to 61). There were over 600 pages of documents submitted to the Review Panel.
The solicitors for the Claimant also submit that the Claimant has been diagnosed with a depressive illness and was in a depressed mood most days. As a result it was difficult to get instructions and explain the dispute process to the Claimant, (A-1 at 62 to 64).
The solicitors for the Claimant submit that if exceptional circumstances are found in this case then, when determining the amount of costs, a number of factors need to be taken into account including: little overlap in the statutory benefits and damages claims; the costs incurred in the statutory benefits were necessary because of the framework of the legislation; the partner on the case has 32 years experience and is an accredited personal injury specialist; the solicitor has 16 years experience.
The Insurer submits that the Claimant is entitled to 16 monetary units plus GST for the legal services rendered in connection with the Review Application of $1,826, (R 1).
The Insurer submits that “…the circumstances of the dispute, being a reply to a Review Application is not exceptional. There is nothing out of the ordinary or unusual pertaining to the subject dispute nor is the claimant is under a legal disability…. The Claimant resides in Australia, is English speaking and is well-educated”. (R 1, paragraphs 13-16).
The Insurer submits that the Claimant’s lawyers telephone calls and email correspondence, made prior to the determination by the Proper Officer, does not give rise to exceptional circumstance. “The services outlined are merely administrative work as opposed to legal work. The services rendered were not required in circumstances where both parties had made submissions in the matter and the Dispute Resolution Service was handling the allocation of the dispute which did not require input by either party.” (R-1, paragraph 22).
The Insurer also submits that:
· the Claimant is not entitled to legal costs for the period of 1 July 2019 to 16 October 2019 as these expenses were incurred prior to the lodgement of the Application for Review of a Medical Assessment which was submitted by the Insurer;
· the Insurer has already made payment for legal costs in connection with the “minor injury” and cervical fusion surgery disputes, and
· the parties were required to obtain additional medical information regarding the Claimant’s pre-accident medical history, the Insurer submits that this is not an unusual situation in Review Application matters. (R-1, paragraphs 24,25 and 27).
Regarding Counsel’s fees, the Insurer submits that engaging counsel:
“…outside the legislative framework does not make the case exceptional. The objectives of MAIA must be borne in mind when determining issues in relation to costs. The Insurer submits that by awarding exceptional costs merely because there is a dispute which required consideration of medical information not meet those objectives and costs should not be awarded in those circumstances.” (R-1, paragraph 30).
Consistent with the objects of the MAI Act, the discretion to award such costs must be exercised in a manner consistent with the framework of the legislation and the legislative intent, lest the cost of the scheme becomes unpredictable. (R-1 paragraph 10).
The Insurer submits that the current dispute did not involve complex legal or medical issues. A medical dispute with consideration of relevant and current medical journal articles and the medical guidelines are matters which a practitioner in this area should be acquainted with and would not of itself give rise to an exceptional circumstance within the context of section 8.10 (4) of the MAI Act. This is a common type of dispute that would ordinarily find its way to the DRS for resolution. (R-1 paragraph 10).
The Insurer submits that exceptional circumstances do not exist that would justify payment of the legal costs sought in this case above the regulated amount. Accordingly, under section 8.10(4)(b) of the MAI Act, the Claimant’s payment of legal costs in respect of the medical assessment should be limited to 16 monetary units, which currently equates to a monetary sum of $1,660 plus GST totalling $1,826. (R-1 paragraph 23).
Relevant Statutory Provisions
Both parties in this dispute have referred to the relevant statutory provisions in their submissions. Accordingly, I will not set out in detail the text of those provisions but will only refer to them briefly.
The objects of the MAI Act include, at section 1.3(2)(g), ‘to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes’. In the interpretation of a provision of the MAI Act or the Regulations, a construction that would promote the objects of the MAI Act or the provision is to be preferred to a construction that would not promote those objects (section 1.3(4)). In the exercise of a discretion conferred by a provision of the MAI Act or the Regulations, the person exercising the discretion must do so in the way that would best promote the objects of the MAI Act or of the provision concerned (section 1.3(5)).
The Claimant’s entitlement to recover legal costs is governed by Part 8 of the MAI Act. That Part applies to and in respect of legal costs payable on a party and party basis, on a solicitor and client basis or on any other basis, unless the Part otherwise provides, section 8.2.
Section 8.3 of the MAI Act provides for the fixing of maximum costs recoverable by Australian legal practitioners. Sub-section 8.10(1) provides that a claimant for statutory benefits is (subject to that section) entitled to recover from the insurer ‘reasonable and necessary’ costs in connection with the claim. This is qualified by subsections (3) and (4) which provide that the recovery of costs is allowed if payment is permitted by the Regulations or the Commission, if satisfied that the claimant is under a legal disability or exceptional circumstances exist.
Schedule 1 Part 1 sub-clause 2 (1) of the Regulation provides that the maximum claim for legal services in connection with a medical assessment under Division 7.5 are 16 monetary units.
Sub-section 7.1(1) defines medical assessment matter to mean a matter declared by Schedule 2 to be a medical assessment matter for the purposes of this Part.
Schedule 2, clause 2(b) of the MAI Act declares a dispute about whether any treatment and care provided to the injured person is reasonable and necessary in the circumstances is declared to be a “medical assessment matter”.
Under clause (1) of Schedule 1 of the Regulation, the maximum costs for legal services provided to a claimant or an insurer in connection with an assessment under Division 7.6 of the MAI Act involving a dispute about a regulated miscellaneous claims assessment matter are 16 monetary units (to a maximum of 60 monetary units per claim).
Under clause 2(1) of Schedule 1 of the Regulation, the maximum costs for legal services provided to a claimant or an insurer in connection with an assessment under Division 7.5 of the MAI Act as allowed by a claims assessor are 16 monetary units (to a maximum of 60 monetary units per claim).
Under clause 2(3) of Schedule 1 of the Regulation, the maximum costs for legal services provided in connection with a review of a medical assessment by a review panel under section 7.26 of the MAI Act are 16 monetary units plus the maximum costs set out in subclause (1).
Reasonable and necessary costs
In this matter both the Claimant and Insurer in their written submissions agree that the Claimant is entitled to the payment of legal costs of 16 monetary units, which currently equates to a monetary sum of $1,660 plus GST totalling $1,826.
The area of dispute is that the Claimant submits that exceptional circumstances exist and an amount of $69,548.60 for their solicitors costs and $4,455 for barristers fees should be awarded. The Insurer disagrees and submits that there are no exceptional circumstances which justify the higher payment.
Do exceptional circumstances exist?
In AAI Ltd t/a GIO v Moon [2020] NSWCC 714 (Moon) His Honour Wright J considered in some detail legal costs, the operation of section 8.10 and the meaning of “exceptional circumstances”.
Wright J stated at [103] that:
“… in summary, the legal costs that a claimant for statutory benefits is entitled to recover and be paid under s 8.10, are the ‘reasonable and necessary’ legal costs ‘incurred by the claimant’ in connection with the claim:
(1) where those legal costs do not exceed the relevant maximum legal costs fixed by the regulations made under s 8.10(2) and thus the payment of those legal costs is ‘permitted by the regulations’; and
(2) where those legal costs exceed the relevant maximum legal costs fixed by the regulations but the DRS:
(a) is satisfied that the claimant is under a legal disability or that exceptional circumstances exist; and
(b) has permitted the payment of those legal costs, in accordance with s 8.10(4).”
The Court held that sub-section 8.10(3) should be construed as conferring on the DRS (Commission) a discretion to permit the recovery and payment of legal costs in excess of the maximum costs fixed by the Regulations, where the requirements of sub- section 8.10(4) are met. The Court referred to a category of cases considered exceptional, because they involve an unusual degree of factual or legal complexity or for some other reason, and this requires the incurring of more substantial legal costs by a claimant. These cases fall within sub-section 8.10(4). It would be consistent with the objects and other provisions of the MAI Act, including for example sub-section 7.46, and the express terms of sub-sections 8.10(3) and (4), to permit the amount of legal costs recoverable under sub-section 8.10 in such exceptional cases to exceed the maximum fixed by regulation, where that was reasonably required to prevent injustice, hardship or some other relevant adverse consequence.
The phrase ‘exceptional circumstances’ in sub- section 8.10 (4) (b) is not defined in the MAI Act. The existence of ‘exceptional circumstances’ was accepted by the parties in Moon’s case and was not in contention and not discussed at any detail in the judgment, (see [16]).
Some assistance for the meaning of the phrase ‘exceptional circumstances’ can be derived by reference to the principles discussed in San v Rumble (No. 2) [2007] NSWCA 259. That case examined the meaning of the phrase “exceptional case and for the avoidance of substantial injustice” as it appears in section 153 of the Motor Accidents Compensation Act 1999 (NSW). Campbell JA reviewed numerous cases on the meaning of ‘exceptional circumstances’. His Honour referred to Ho v Professional Services Review CommitteeNo 295[2007] FCA 388 where Rares J (at [26]) said that exceptional circumstances "... can include a single exceptional matter, a combination of exceptional factors, or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional."
Campbell JA then concluded his review of the cases and stated that at [67]:
“In deciding whether it is an ‘exceptional case’ within the meaning of section 153(1), the court needs to find that the circumstances of the instant case are unusual or out of the ordinary, whether that unusualness or being out of the ordinary arises from qualitative or quantitative factors. But, to adapt Kelly, the case need not be one that is unique, unprecedented, or very rare. The conclusion that the case is exceptional can arise in any of the ways identified by Rares J in Ho. Beyond that, it seems to me it is not possible to provide general guidance. …..it will be necessary to approach each application by careful consideration of the facts of the individual case.”
Determination
Applying the concepts and discussions above about the meaning of “exceptional circumstances”, I find that exceptional circumstances exist in this case.
The exceptional circumstances in this matter are that the Claimant’s solicitors preparation and presentation of the dispute involved special skill by the solicitors given the complexity of the medical issues and materials and the volume of material. The solicitors were required to undertake extra work because the matter had unusually complex medical issues involved. They also had a large volume of material they had to collate and present to the Review Panel. The solicitors had to contend with an additional difficulty of a client who, although not under a legal disability, was diagnosed with depression. The solicitors say this made it difficult to get instructions and took longer to deal with the Claimant’s questions and need to explain the dispute process to him. Taken individually these factors may appear ordinary and not amount to exceptional circumstances, but when combined together they can be seen as exceptional.
In Moon’s case, the Court referred to a category of cases considered exceptional, because they involved an unusual degree of factual or legal complexity or for some other reason which required the incurring of more substantial legal costs by a claimant. Moon’s case stated it would be consistent with the objects and other provisions of the MAI Act, including the express terms of sub-sections 8.10(3) and (4), to permit the amount of legal costs recoverable under sub-section 8.10 in such exceptional cases to exceed the maximum fixed by regulation where that was reasonably required to prevent injustice, hardship or some other relevant adverse consequence.
In the present case the Claimant incurred greater legal costs because of the complexity of the medical evidence and the need for a review by a medical assessment Review Panel. I also note that the Insurer initially refused to fund the spinal operation and the Claimant had to fund the operation himself. The Claimant was also the respondent to the Insurer’s review application to the Review Panel. His success at the Review Panel prevented hardship to the Claimant who had suffered debilitating neck and back pain which was only relieved by necessary spinal surgery.
Having found that exceptional circumstances exist in this case I now have to determine the amount of reasonable and necessary legal costs.
The solicitors for the Claimant submit that if I find that exceptional circumstances exist the full amount of legal costs claimed should be awarded. The reasons they give are as referred to above: the volume and complexity of the medical material and the difficulty they had in getting instructions and explaining the dispute process to a Claimant with a diagnosed depression.
On the other hand the solicitors for the Insurer
ssubmit that not all the legal costs claimed should be awarded. They submit that the Claimant resides in Australia, is English speaking and is well-educated. He is not under a legal disability. The Insurer’s solicitors argue that although the matter was complex it was not unusually complex for a Medical Review Panel matter. They also argue that much of the work done by the Claimant’s solicitors was clerical or administrative in character and did not need to be done by qualified solicitors. The Insurer’s solicitors also noted that the Insurer has already made payment for legal costs in connection with the “minor injury” and cervical fusion surgery disputes. Finally the Insurer’s solicitors submit some of the legal costs claimed by the Claimant’s solicitors was for work done prior to the application to the Review Panel which is not allowable.In addition to the matters raised in the Insurer’s solicitors submissions, I also note the comment by the Review Panel about extra medical material put before the Panel which was not requested by the Panel. The Review Panel noted that some of this documentation was “… not requested by the Panel but was considered relevant by the solicitor”, (AD-1, page 23). In my view this demonstrates that some of the work done by the Claimant’s solicitors for the Review Panel was unnecessary.
I also note that in a claim for damages the hourly rate recoverable for a legal service is three monetary units, which is about $312 plus GST. This is clearly not a market rate but it is a rate that the MAI Act prescribes for provision of legal services in connection with a claim for damages. The lower than market rate reflects the intention of the legislation to reduce legal costs. In this case the Claimant’s solicitors have charged per unit fees ranging from $30 to $60 or $66 for senior experienced solicitors, (A-5).
When exercising my discretion to determine the amount of legal costs to be paid in exceptional circumstances there is little guidance available in assessing those costs. There is no scale of legal costs nor any schedule of fees in the Commission’s Rules or legislation unlike the maximum costs for legal services set out for regulated matters in Schedule 1 of the Regulations. Nor is there a process for a taxation where a taxing officer goes through in detail checking every item claimed against a scale of permitted fees. The discretion to award legal costs in exceptional circumstances must be used consistently with the objects of the MAI Act. These objects include the early resolution of claims and the quick, cost effective and just resolution of disputes. The objects are also to keep premiums affordable and the scheme sustainable. When exercising a discretion it must be exercised in the way that would best promote the objects of the MAI Act. Accordingly, dealing with disputes quickly and limiting legal costs would be consistent with the objects of the MAI Act and is a relevant consideration when determining legal costs.
In In my view it is not appropriate that I deal with the assessment of Claimant’s legal costs on an item-by-item basis. The discretion I have is one which requires me to assess those reasonable and necessary costs for the disposition of the Review Panel dispute having regard to the objects and framework of the legislation.
Taking into consideration the above submissions from the parties, the comment from the Review Panel and the objects of the MAI Act, I find that not all of the legal work claimed by the Claimant’s solicitors for the Review Panel dispute was reasonable and necessary. I award the amounts of: $30,800 including GST for the solicitors professional legal costs and $4,455 including GST for barristers fees.
I have allowed Counsel’s fees because of the essential role Counsel played in drafting written submissions for the Claimant in the dispute.
There is also a claim for the clinical records invoice from Dr Davor Saravanja of $60 plus GST of $6 totalling $66. I will make no formal order for the $60 fee claimed by Dr Saravanja because the Insurer in its written submissions stated it does not dispute the invoice and would pay it on receipt of verification of payment, (R-1,paragraph 3).
Conclusion
Under sub-section 8.10 (4) I am satisfied that that exceptional circumstances exist that justify payment of legal costs incurred by the Claimant.
The amount of the Claimant’s reasonable and necessary legal costs assessed in accordance with the MAI Act and the Regulations is $30,800, inclusive of GST for the solicitors professional legal costs and $4,455 inclusive of GST for barristers fees.
Ray Plibersek
General Member and Merit Reviewer
Personal Injury Commission
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