Taouk v AAI Limited t/as GIO
[2022] NSWPICMR 60
•27 October 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| Citation: | Taouk v AAI Limited t/as GIO [2022] NSWPICMR 60 |
| ClaimanT: | Elias Taouk |
| Insurer: | AAI Limited t/as GIO |
| Merit Reviewer: | Katherine Ruschen |
| DATE OF DECISION: | 27 October 2022 |
CATCHWORDS: | MOTOR ACCIDENTS - Merit review; dispute about whether for the purposes of section 8.10 (recovery of costs and expenses in relation to claims for statutory benefits) of the Motor Accident Injuries Act 2017 (2017 Act) the costs and expenses incurred by the claimant are reasonable and necessary; whether costs payable per medical dispute or per medical assessment, clause 22, schedule 1, clause 2 of the Motor Accident Injuries Regulation 2017; section 7.12(7) of the 2017 Act; failure to provide further information; guiding principle section 42 of the Personal Injury Commission Act 2020; Held - decline to conduct a merit review under section 7.12(7) of the 2017 Act. |
| Determinations made: | 1. the claimant is entitled to reasonable and necessary legal costs incurred in connection with the medical assessment by Medical Assessor Bodel up to a maximum of 16 monetary units; 2. the claimant is entitled to reasonable and necessary legal costs incurred in connection with the medical assessment by Medical Assessor Mason up to a maximum of 16 monetary units; 3. the claimant is entitled to reasonable and necessary legal costs incurred in connection with the review of a medical assessment by the review panel comprising Medical Assessors Crane and Maloney up to a maximum of 16 monetary units; and 4. pursuant to s 7.12(7) of the MAI Act I decline to conduct a merit review as to the amount of reasonable and necessary costs payable in connection with each of the above (that is, whether the maximum or a lower sum is payable for each assessment) on the basis the clamant failed to provide information required by the merit reviewer. |
STATEMENT OF REASONS
INTRODUCTION
Elias Taouk (the claimant) was involved in a motor accident on 20 May 2020.
A medical dispute arose between the claimant and the insurer in relation to the claimant’s injuries and treatment.
On 9 November 2020 the claimant lodged an application to determine whether the claimant’s physical and psychological injuries were minor for the purpose of the MAI Act.
On 25 November 2020 the claimant lodged an application regarding two treatment disputes.
That part of the application dated 9 November 2020 concerning physical injury and the 25 November 2020 application were referred by the Personal Injury Commission (the Commission) to a single medical assessment, which was carried out by Medical Assessor Bodel.
That part of the application dated 9 November 2020 concerning psychological injury was referred to a separate medical assessment by Medical Assessor Mason.
On 6 April 2021 Medical Assessor Bodel issued a certificate that the claimant’s right shoulder injury was not minor and that treatment in dispute related to the injuries arising from the motor accident and was reasonable and necessary.
On 15 June 2021 Medical Assessor Mason issued a certificate that the claimant’s psychological injury was minor.
On 7 May 2021 the insurer lodged two separate applications for review of Medical Assessor Bodel’s decision, one concerning whether the injury was minor and one concerning the treatment dispute. The two applications were referred by the Commission to one review of a medical assessment by a review panel comprising Medical Assessors Crane and Maloney.
On 20 September 2021 Medical Assessors Crane and Maloney issued a panel review certificate that the right shoulder injury was minor and the treatment in dispute was not related to the motor accident.
By letter to the insurer dated 12 October 2021 the claimant made a claim for the following costs:
(a) medical dispute $1,660.16;
(b) treatment dispute $1,660.16;
(c) treatment dispute $1,660.16;
(d) review of medical assessment (treatment) $1,660.16;
(e) review of medical assessment (minor injury) $1,660.16;
(f) GST $830
[TOTAL $9,310.88], and
(g) Belmore Medical Services $110.
[TOTAL FOR PROFESSIONAL COSTS & DISBURSEMENTS $9,240.88]
In short, the claimant claims maximum costs for each separate medical dispute, there being five disputes in total despite their being only two medical assessments and one review of a medical assessment that is, only three assessments in total.
The disputes arose from on or about 9 November 2020 when the claimant lodged an application regarding whether their injuries were minor and concluded on or about 20 September 2021 when Medical Assessors Crane and Maloney issued their review panel certificate.
In support of the claim for costs the claimant has provided a 36 page itemised bill of costs totalling $23,946.50 for the period from June 2020 until October 2021. The claimant has made no effort to clarify which items in this document form part of any one of the five separate claims for costs. Precisely which costs are said to be incurred in connection with which medical dispute is unclear from the narratives in the itemised bill. What is clear, however, is that the bill covers a period commencing before any medical dispute arose and includes substantial administrative costs such as time spent on electronic and hardcopy filing and printing. The bill also includes costs that would have no relationship to a medical dispute such as requesting documents from the Australian Taxation Office, or which are unrecoverable such as the costs of an internal review.
The insurer agreed to reimburse the claimed disbursement of $110 inclusive of GST for the clinical records of Belmore Medical Services.
In relation to legal costs, GIO offered, on a without prejudice basis, to pay the maximum amount of $1,660.16 plus GST for the three applications lodged by the claimant on the basis they were consolidated into one medical assessment and the maximum amount of $1,660.16 for the two review applications lodged by the insurer on the basis they were also consolidated into one review of a medical assessment.
SUBMISSIONS
There was a total of four applications lodged by the parties in which five separate disputes were raised. The claimant submits they are entitled to the maximum amount of $1,660.16 for each separate dispute that arose.
The claimant therefore makes five separate costs claims for the maximum amount to be paid in each costs claim and contends that in each separate claim, costs were incurred that reached or exceeded the maximum.
The insurer submits that as the applications were consolidated into one medical assessment there can be only one claim for costs up to the maximum amount regardless of the number of disputes. The insurer further submits that in any event, the work done by the claimant’s solicitor was minimal and therefore unlikely to reach the maximum sum.
REASONS
The legislation
Relevantly, pursuant to s 8.10 of the MAI Act:
“(1) A claimant for statutory benefits is (subject to this section) entitled to recover from the insurer against whom the claim is made the reasonable and necessary legal costs, and other costs and expenses, incurred by the claimant in connection with the claim. Other costs and expenses include the cost of medical and other tests and reports.
(2) The regulations may make provision for or with respect to fixing the maximum costs and expenses recoverable by a claimant under this section (including any matters for which no costs and expenses are recoverable from the insurer).
(3) A claimant for statutory benefits is only entitled to recover from the insurer against whom the claim is made reasonable and necessary legal costs incurred by the claimant if payment of those costs is permitted by the regulations or the Commission.”
(emphasis added)
Regulation 22 and Sch1, cl 2 of the Regulation permit costs in respect of a medical dispute as follows:
“(1) 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 are 16 monetary units (to a maximum of 60 monetary units per claim).
(2) The maximum costs for legal services provided in connection with a further medical assessment under section 7.24 of the Act (including in connection with the application for referral of the decision for further assessment) are as follows--
(a) if the President approves the application for referral--16 monetary units,
(b) if the President refuses to approve the application--
(i) for legal services provided to the applicant--nil,
(ii) for legal services provided to the respondent--8 monetary units.
(3) 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 Act (including in connection with the application for referral of the medical assessment to the review panel) are as follows--
(a) if the President approves the application for referral--16 monetary units,
(b) if the President refuses to approve the application--
(i) for legal services provided to the applicant--nil,
(ii) for legal services provided to the respondent--8 monetary units.
(4) The maximum costs set out in subclauses (2) and (3) are in addition to the maximum costs set out in subclause (1).”
(emphasis added)
Sch1, cl2(2) does not apply as there is nothing to suggest that there has been a “further” medical assessment under s 7.24 of the MAI Act and Regulation 13, which would first require application to the President on the grounds set out in Regulation 13.
Schedule1, cl 2(1) and 2(3) arise, however, and allow costs incurred in connection with a medical assessment and/or a review of a medical assessment by a review panel.
Pursuant to s 7.17 of the MAI Act, “medial assessment” means “an assessment of a medical assessment matter under” Division. 7.5 of the MAI Act and "medical dispute" relevantly means “a dispute between a claimant and an insurer about a medical assessment matter”.
Are costs payable per medical “dispute” or per medical “assessment”?
The claimant claims maximum costs per dispute referred to a medical assessment or review of a medical assessment. However, whilst the language of the relevant provision acknowledges there may be more than one medical dispute, Sch1, cl 2 makes clear in its wording that costs are payable per “medical assessment” or per “review of a medical assessment” regardless of the number of disputes in any one medical assessment or review of a medical assessment.
I therefore reject the claimant’s contention that costs are recoverable in connection with each dispute and conclude the claimant is entitled to costs, up to the maximum for each medical assessment or review of a medical assessment, as follows:
(a) medical assessment by Medical Assessor Bodel;
(b) medical assessment by Medical Assessor Mason, and
(c) review of a medical assessment by review panel Medical Assessors Crane and Maloney.
What are the reasonable and necessary legal costs of each of the two medical assessments and the review of a medical assessment?
The remaining issue to be determined is whether the claimant incurred reasonable and necessary costs in connection with each medical assessment and the review of a medical assessment that reach or exceed the maximum to be entitled to payment of the maximum.
The maximum does not operate as a fixed sum payment. Only costs that are reasonable and necessary and have in fact been incurred are payable. Accordingly, if reasonable and necessary costs in connection with any medical assessment or review of a medical assessment are less than the maximum, the lessor amount is payable.
To recover the maximum in connection with any individual medical assessment or the review of a medical assessment the claimant must establish that actual reasonable and necessary costs incurred in connection with the specific medical assessment or the review reach or exceed the maximum. If actual costs in any given assessment are less the maximum is not recoverable and the claimant may only recover the amount of costs actually incurred in the lessor sum.
For example, only the reasonable and necessary costs incurred in connection with the medical assessment by Dr Bodel are to be considered in determining whether, in connection with that particular medical assessment, the claimant incurred costs at or above the maximum. If costs of the medical assessment by Medical Assessor Mason exceeded the maximum the claimant cannot assign the surplus costs in the medical assessment by Medical Assessor Mason to the costs of the medical assessment by Dr Bodel in order to reach the maximum in both matters.
Procedural history
On 5 July 2022 I issued directions which required the claimant to provide further information under direction 1, by 20 July 2022.
The claimant failed to comply with the directions made on 5 July 2022. An extension of time was not sought and no explanation for the non-compliance was provided.
On 15 August 2022 I gave the claimant a further opportunity to provide the further information required for this merit review by issuing further directions in which time for the claimant to comply with direction 1 made 5 July 2022 was extended to 23 August 2022. I also made direction 4, which required the claimant to provide a written explanation by 24 August 2022 in the event of any continuing non-compliance with direction 1.
The claimant failed to comply with the directions of 15 August 2022. An extension of time was not sought and no explanation for the non-compliance was provided.
On 24 August 2022 the claimant requested an extension of time until 20 September 2022 to comply with the directions on the basis the solicitor with carriage of the matter was overseas until 5 September 2022. Having regard to the nature of this merit review and the nature of the information required by the directions it is unclear why the claimant is unable to comply without assistance from the solicitor with carriage. The bill of costs reveals several personnel worked on the matter and therefore would have knowledge of the file. There is also a supervising partner who is expected to have sufficient knowledge of the matter and ought to be able to co-ordinate the provision of the information required by the directions. In any event, the claimant was advised that direction 1 made 5 July 2022 is further extended to 20 September 2022, as requested.
The final extension of 20 September 2022 has now lapsed by over one month. The claimant remains in breach of the directions issued 5 July 2022 and 15 August 2022. There has been no further request for an extension of time and no explanation has been provided for the failure to comply with the directions.
The claimant’s obligations
Pursuant to the guiding principle in s 42 of the Personal Injury Commission Act 2020 (PIC Act) the claimant and their solicitor are each under a duty to co-operate with the Commission to give effect to the guiding principle and, for that purpose, to participate in the processes of the Commission and to comply with directions and orders of the Commission.
The claimant’s solicitor also has obligations under the Legal Profession Uniform Law (LPUL) regarding the manner in which they may charge and/or claim costs.
As noted above, many items claimed appear unrelated to any medical assessment. For example, many items pre-date any application for a medical assessment. The need for an application for a medical assessment does not arise until after an insurer issues the relevant internal review decision. Accordingly, costs that pre-date the relevant internal review decision could not be costs in connection with a medical assessment. In addition, the current claim includes costs that appear to relate to applications for internal reviews (such costs are not recoverable under the MAI Act) and/or to be unrelated to any medical dispute such as matters involving the Australian Taxation Office. A substantial aspect of the claim also appears to be for administrative costs rather than legal costs.
Under the guiding principle in s 42 of the PIC Act, the claimant’s solicitors have a professional obligation to assist the Commission. As part of this obligation, they must properly consider the extent to which costs can be reasonably claimed as costs of a medical assessment and should submit a claim for only those costs related to the medical assessments. In doing so, the claimant’s solicitors ought to have proper regard to relevant legislation, including but not limited to cl 23 of the Motor Accident Injuries Regulation which excludes costs of an internal review and the costs provisions of the LPUL, which apply to any costs assessment. It is not appropriate for the claimant to simply submit a 36 page bill of costs covering all work for the life of the client file and expect the merit reviewer to determine from this extensive list what costs were incurred in connection with the medical assessment by Medical Assessor Bodel, what costs were incurred in connection with the medical assessment by Medical Assessor Mason and what costs were incurred in connection with the review of a medical assessment by review panel Medical Assessors Crane and Maloney.
Pursuant to s 7.12 of the MAI Act the claimant and the insurer must provide to the merit reviewer such information as the reviewer may reasonably require for the purposes of the merit review.
Directions were issued under s 7.12 for the provision of further information by the claimant.
Compliance by the claimant with s 7.12 and in turn the directions issued is mandatory.
The claimant has been given ample opportunity to properly present the claim for costs and provide the further information required. The claimant has been indulged by two extensions of time to comply with directions under s 7.12.
Other than one request for an extension of time, the directions have been ignored by the claimant, in breach of the guiding principle in s 42 of the PIC Act and s 7.12 of the MAI Act.
The information provided by the claimant is incomplete or lacks clarity such that I do not have sufficient information to determine to extent to which the claimant incurred reasonable and necessary costs in connection with each of the two medical assessments and the review of a medical assessment. This includes that I am unable to determine from the available information whether in each separate medical assessment in which costs are payable the claimant incurred costs at (or above) or below the maximum. Deficiencies in the current material include:
(a) dates in the bill of costs are partially obscured, and
(b) there is no document which makes clear what costs from the 36 page bill of costs covering all work, were incurred in connection with each of the two medical assessment and the review of a medical assessment.
At a rudimentary level the claimant ought to have separately itemised each claim for costs in a way that makes clear the costs the claimant says were incurred in connection with the assessment by Medical Assessor Bodel, the costs the claimant says were incurred in connection with the assessment by Medical Assessor Mason and the costs the claimant says were incurred in connection with the review of a medical assessment.
Absent the further information required by the directions I am unable to determine the extent to which the claimant incurred costs in connection with either medical assessment or the review of a medical assessment. The maximum is not a fixed payment. It is a cap on the extent to which costs are payable meaning that if actual reasonable and necessary costs are less, the lessor sum is payable and not the maximum. Therefore, whether it be a line by line assessment or a gross sum assessment there nonetheless must be at least some assessment of costs carried out, even at a basic level, to determine whether the claimant is entitled to the maximum amount in either medical assessment or the review. Insufficient information is available to do this, hence the directions issued which have been breached by the claimant.
Pursuant to s 7.12(7) of the MAI Act a merit reviewer may decline to conduct a merit review if the claimant or the insurer has failed to provide any such information required by the reviewer. Further information was required of the claimant. The information required by the directions is not onerous. It is information of a kind that ought to be readily available in the client’s file. However, the claimant has failed to provide the information. The claimant has had ample time to provide the information (almost four months).
As the claimant failed to provide the information required for the purpose of this merit review pursuant to directions issued 5 July 2022 (extended on 15 August 2022 and further extended on 24 August 2022), pursuant to s 7.12(7) I decline to conduct a merit review as to the amount of costs recoverable in respect of each medical assessment and the review.
CONCLUSION
Accordingly, the determination is as follows:
(a) the claimant is entitled to reasonable and necessary legal costs incurred in connection with the medical assessment by Medical Assessor Bodel up to a maximum of 16 monetary units;
(b) the claimant is entitled to reasonable and necessary legal costs incurred in connection with the medical assessment by Medical Assessor Mason up to a maximum of 16 monetary units;
(c) the claimant is entitled to reasonable and necessary legal costs incurred in connection with the review of a medical assessment by the review panel comprising Medical Assessor Crane and Maloney up to a maximum of 16 monetary units, and
(d) pursuant to s 7.12(7) of the MAI Act I decline to conduct a merit review as to the amount of reasonable and necessary costs payable in connection with each of the above (that is, whether the maximum or a lower sum is payable for each assessment) on the basis the clamant failed to provide information required by the merit reviewer.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· the application, reply and supporting documentation;
· the MAI Act;
· Motor Accident Guidelines,
· the Regulation, and
· the LPUL.
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