Simolo v AAI Limited trading as GIO

CERTIFICATE OF DETERMINATION OF MERIT REVIEWER
CITATION:	Simolo v AAI Limited trading as GIO [2021] NSWPICMR 40
CLAIMANT:	Loseta Simolo
INSURER:	AAI Limited trading as GIO
MERIT REVIEWER:	Tajan Baba
DATE OF DECISION:	22 June 2021
CATCHWORDS:	MOTOR ACCIDENTS- Merit Review;  dispute about recovery of costs and expenses in relation to claims for statutory benefits under the Motor Accident Injuries Act 2017 (MAI Act); whether the legal costs of application for medical assessment incurred by claimant are reasonable and necessary for the purposes of section 8.10 of the MAI Act; claimant failed to attend scheduled medical assessment; claimant withdrew application for medical assessment; whether entitled to recover legal costs regardless of whether medical dispute determined; whether legal costs incurred in preparing application for medical assessment reasonable and necessary; whether the application had reasonable prospects of success; Held – the reviewable decision is affirmed; the legal costs incurred by the claimant in relation to the medical dispute are not reasonable and necessary; the claimant is not entitled to recovery of costs.
DETERMINATIONS MADE:	1. The Insurer’s reviewable decision dated 1 September 2020 is affirmed: The legal costs incurred by Ms Simolo in relation to the minor injury medical dispute, referred in application dated 27 November 2018, are not reasonable and necessary for the purposes of section 8.10 of the Act. Ms Simolo is not entitled to recovery of these costs. 2. Effective date: This determination takes effect on 22 June 2021. 3. The reasons for this decision are attached to this certificate.

Background

Ms Simolo was injured in a motor vehicle accident on 19 March 2018.
AAI Limited trading as GIO (“the Insurer”) accepted Ms Simolo’s claim under the Motor Accidents Injuries Act 2017 (“the Act”).
The Insurer made a decision on 4 September 2018 to decline liability for statutory benefits after 26 weeks of Ms Simolo’s claim on the basis that she suffered a ‘minor injury’ for the purposes of the Act. Ms Simolo’s legal representatives, CMC Lawyers, lodged an application for internal review. On internal review, the Insurer affirmed its decision by way of notice dated 6 November 2018.
Ms Simolo disputed the Insurer’s decision and lodged an application for medical assessment with the Personal Injury Commission (“the Commission”) (formerly the Dispute Resolution Service) dated 27 November 2018.
The Commission arranged a medical assessment for Ms Simolo with Assessor Truskett on 5 June 2019. Ms Simolo failed to turn up to the assessment. Her legal representatives subsequently advised that she did not attend due to illness. The application with the Commission in respect to minor injury was subsequently closed on the basis that Ms Simolo did not intend to pursue it.
On 1 September 2020, Ms Simolo’s legal representatives issued a tax invoice to the Insurer dated 18 August 2020, for recovery of legal costs and disbursements.
In an email dated 1 September 2020, the Insurer advised that it would not make payment of the invoice on the basis that Ms Simolo had not been assessed by a medical assessor and the medical dispute had therefore not yet been finalised. This is the ‘reviewable decision’ for the purposes of the Act. The issue in dispute is whether Ms Simolo is entitled to recover from the Insurer the legal costs incurred pursuant to section 8.10 of the Act.
I note that clause 10(d) of the Regulations excludes disputes arising under section 8.10 of the Act from the requirement for internal review.
Ms Simolo’s legal representatives lodged an application with the Commission on 24 September 2020, referring the dispute in relation to legal costs. The application was accepted and falls within the jurisdiction of the Commission as a merit review matter under Schedule 2(1)(aa) of the Act.

Submissions

In the application for merit review, Ms Simolo’s legal representatives provide a background to the dispute and make the following submissions on Ms Simolo’s behalf:
a. Reference is made to Schedule 1, 2(1) of the Motor Accident Regulation 2017 (“the Regulations”):
The maximum costs for legal services provided to a claimant or an insurer in connection with a medical assessment under Division 7.5 of the Act, as allowed by the claims assessor or court, are 16 monetary units.
b.Regardless of whether or not the dispute has been finalised, Ms Simolo’s legal representatives provided legal services to Ms Simolo totalling $11,377.50. These services included preparing the application which was accepted by the Commission.
c.Ms Simolo therefore maintains the claim for legal costs in the sum of $1,826.17.
d.Ms Simolo requests a merit review as to whether her legal representatives are entitled to recover the costs and disbursements in accordance with section 8.9 and 8.10 of the Act.
The Insurer makes, in summary, the following submissions in its Reply:
a.While the injured person has a right to have medical disputes determined by a medical assessor, there is no automatic entitlement to recover legal costs in matters such as this.
b.Consideration ought to be given to the amount of work completed and effort exerted by the legal representatives as well as the merits of the application. The legal representatives put forth brief submissions that were approximately half a page in length. The submissions do not address how the medical evidence satisfies the criteria outlined in section 1.6 of the Act for Ms Simolo’s alleged injuries to be classified as a ‘non-minor’ injury and how the evidence would have a material effect of altering the outcome of the dispute.
c.It is also noted that Ms Simolo failed to attend the scheduled medical appointments which has resulted in the Commission closing the application on the basis that Ms Simolo does not intend to pursue the application regarding minor injury dispute.
d.It is not in line with the objects of the Act to award the maximum amount of costs for a medical dispute, in the absence of evidence of exceptional circumstances and/or application of legal expertise, or considerable work undertaken.
e.The Insurer submits that the Merit Reviewer should therefore, commiserate with a multitude of prior Commission decisions in this regard, give consideration to the level of submissions/reasons provided and overall consideration put into the application, and conclude it would not be appropriate to award the maximum costs claimed.
f.Maximum costs should be awarded in circumstances where the legal representatives have put significant and justified time and effort into the application, and regard should be had to the success of the application.
g.The Insurer submits that Ms Simolo’s application for legal costs ought therefore to be dismissed. In the alternative, should the Merit Reviewer find that there should be an allowance for costs in this matter, only a minimal allowance for costs in relation to the medical dispute should be awarded.

Reasons

The issue in dispute before me is Ms Simolo’s entitlement to legal costs relating to the ‘minor injury’ dispute, including the application to the Commission dated 27 November 2018.
Section 8.3 of the Act provides for the fixing of maximum costs recoverable by Australian legal practitioners. 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.
Ms Simolo submits that she is entitled to legal costs in the maximum sum of $1,826.17 (inclusive of GST). The Insurer makes a number of submissions in relation to Ms Simolo’s entitlement of legal costs and submits that nil, or in the alternative only minimal costs should be allowed.
The Commission has jurisdiction to determine disputes arising in relation to costs as merit review matters under Schedule 2, clause 1(aa) of the Act, which outlines the determination of the dispute as follows:
whether for the purposes of section 8.10 (Recovery of costs and expenses in relation to claims for statutory benefits) the costs and expenses incurred by the claimant are reasonable and necessary.

Schedule 1, Part 1, clause 2(1) of the Regulations limits costs in connection with medical assessments to 16 monetary units (currently equalling $1,660.16).
I am required, pursuant to the jurisdiction conferred by Schedule 2, clause 1(aa) of the Act, to determine the quantum of the maximum costs I consider appropriate. It is open to me to permit any amount of costs up to the maximum amount, including nil.
In this case, the Insurer issued a ‘Liability Notice – Benefits after 26 weeks’ on 4 September 2018 declining liability for statutory benefits after 26 weeks of Ms Simolo’s claim, on the basis that her injury had been determined as a ‘minor injury’ under the Act, in a separate notice of the same date.
Ms Simolo’s lodged an application for internal review. I note that the costs of legal services provided to claimants in connection with applications for internal reviews are not recoverable pursuant to clause 23 of the Regulations.
The Insurer issued its decision on internal review on 6 November 2018. The decision affirms the original decision. The statement of reasons for the internal review decision is just over 9 pages long and provides a detailed history of the dispute and injury.
The internal review also outlines the legislative provisions of the Act, Regulations and the Guidelines relevant to determining ‘minor injury’ in the matter. It then outlines the “facts in the matter”, including the diagnosis of “neck and back muscle strain” by Ms Losetta’s GP and refers to the medical evidence, specifically outlining the results of x-rays of the cervical spine and thoracolumbar spine.
The internal review proceeds to consider the definition of ‘minor injury’ under section 1.6 of the Act and other relevant provisions as well as the medical evidence, and provides comprehensive reasons as to why the evidence indicates Ms Simolo’s injuries to the neck and back are a ‘minor injury’ under the Act. It is also noted that Ms Losetta’s GP did not make a diagnosis of injury for the right shoulder nor is there any evidence indicating injury to that shoulder.
On 27 November 2018, Ms Simolo’s legal representatives lodged an application for medical assessment with the Commission. The application included three attachments, being the Insurer’s liability notice, the application for internal review and the Insurer’s internal review decision.
The submissions made by Ms Simolo’s legal representatives in support of the application are half a page in length and consist of a background to the dispute and the following submission:
The claimant submits her injury is not a minor injury. As a result of the subject accident, the claimant sustained injuries to her neck, nback and right shoulder and refers for assessment, physical injuries.
The dispute was referred to Medical Assessor, Dr Truskett. Ms Simolo failed to turn up to the medical assessment appointment. Her legal representatives subsequently advised that she did not attend due to illness and the application with the Commission was later closed on the basis that Ms Simolo did not intend to pursue the application.
Ms Simolo’s legal representatives make a number of submissions in support of Ms Simolo’s entitlement to the recovery of legal costs in this matter.
I acknowledge the general entitlement to the recovery of legal costs, and while injured persons have a right to have medical disputes determined by a medical assessor this does not necessarily transpose to also having the right to recover the legal costs associated with such. As noted above, the legal costs need to be “reasonable and necessary” to be entitled to recover the costs under the Act.
The application for medical assessment made by Ms Simolo’s legal representatives, in my view, had no prospects of success based on the available medical evidence and the information provided in the internal review. The internal review also comprehensively explained why Ms Simolo’s injuries were a ‘minor injury’ for the purposes of the Act.
It is not clear on the information before me why Ms Simolo chose not to pursue the application in relation to minor injury. It may the case that the available medical evidence and the internal review influenced this decision.
I agree with the submissions of the Insurer that consideration ought to be given to the merits and success of the application and the amount of work and effort exerted by Ms Simolo’s legal representatives.
As submitted by the Insurer, there were very brief submissions attached to the application and no engagement with the legal provisions relating to ‘minor injury’. The legal representatives also did not make any submissions in support of how Ms Simolo’s injuries met the criteria of a ‘non-minor injury’. The application did not attach any medical evidence or attempt to explain why the available evidence supported Ms Simolo suffered from a ‘non-minor injury’.
In my view, the dispute in relation to minor injury should not have proceeded to an application for medical assessment as it would have been relatively apparent to Ms Simolo’s legal representatives that her injuries were not of a nature that would be determined as ‘non-minor’. In addition, I consider the application lacked a satisfactory level of consideration and legal work required of such an application.
Having regard to the objects of the Act (section 1.3), I do not consider it to be in line with the objects of the Act where an injured person’s injuries are obviously minor, to proceed to the Commission and be assessed by a medical assessor, causing unnecessary delay to an injured person.
Having every minor injury dispute proceed to medical assessment, including ones with clearly no reasonable prospects of success and allowing the recovery of legal costs for all of these matters, would also not be in line with the objects of the Act.
Given that I do not believe the application for medical assessment had any reasonable prospects of success, I do not consider the legal costs incurred by Ms Simolo in connection with the application reasonable and necessary.
I find that the legal costs incurred by Ms Simolo in relation to the minor injury medical dispute, referred in application dated 27 November 2018 were not reasonable and necessary for the purposes of section 8.10 of the Act.
Ms Simolo is therefore not entitled to the recovery of legal costs claimed in the invoice dated 18 August 2020.

Conclusion

The Insurer’s reviewable decision dated 1 September 2020 is affirmed:
The legal costs incurred by Ms Simolo in relation to the minor injury medical dispute, referred in application dated 27 November 2018, are not reasonable and necessary for the purposes of section 8.10 of the Act. Ms Simolo is not entitled to recovery of these costs.
Effective date: This determination takes effect on 22 June 2021.

Legislation and Guidelines

In making this decision, I have considered the following:
·    The Application, Reply and supporting documentation;
·    Motor Accident Injuries Act 2017 (NSW) (the Act), and
·    Motor Accident Injuries Regulation 2017 (the Regulations).

Tajan Baba
Merit Reviewer

Personal Injury Commission

[2021] NSWPICMR 40

22 June 2021