Zheree v Cic Allianz Insurance Limited
[2022] NSWPIC 400
•28 July 2022
| CERTIFICATE OF DETERMINATION OF MEMBER | |
CITATION: | Zheree v CIC Allianz Insurance Limited [2022] NSWPIC 400 |
| CLAIMANT: | James Cox |
| INSURER: | Insurance Australia Limited t/as NRMA Insurance |
| MEMBER: | Belinda Cassidy |
| DATE OF DECISION: | 28 July 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 ; damages claim: catastrophic injuries and psychiatric consequences; teenager at time of motor accident; pedestrian hit by bus on footpath; Held – assessment of non-economic loss; past economic loss; future loss of earning capacity; large buffer ($500,000.00). |
DETERMINATIONS MADE: | Having considered the claim in accordance with s 6.23 of the Motor Accident Injuries Act 2017 and noting that the claimant and the insurer have proposed to settle the claim for the sum of $120,000, the Commission determines: 1. The proposed settlement is approved. 2. There are no deductions to be made by the insurer from the settlement sum. A statement setting out the Commission’s reasons for the determination is included with this certificate. |
STATEMENT OF REASONS
INTRODUCTION
Mr James Cox was injured in a motor accident on 28 July 2019 as he was driving his wife’s Mazda sedan in Charleston. At the intersection of Hillsborough and Charleston Roads, Mr Cox was turning right with a green light when there was a collision with another vehicle which had failed to obey a red traffic light.
The airbags deployed (including the side airbags) and Mr Cox sustained no injury other than an injury to the right side of his head. While he had vertigo and dizziness in the early stages, he has recovered from that but has been left with permanent hearing loss.
Mr Cox is currently 82 but will turn 83 in October this year.
Mr Cox made two claims against NRMA, the third-party insurer of the motor vehicle after that accident:
(a) a claim for statutory (income support and treatment) benefits, and
(b) a claim for lump sum compensation or damages.
NRMA have been paying Mr Cox his statutory benefits[1]. Because he has more than “minor injuries”, NRMA must continue to pay for Mr Cox’s reasonable and necessary and accident-related treatment needs (likely to be hearing aids and related consultations) after his damages claim is settled and for life.
[1] NRMA’s liability notices accepting liability are dated 29 June 2020 and 28 August 2020 and are documents A3 and A2 in the insurer’s bundle. A further liability notice for a statutory benefits claim dated 22 February 2022 is document A4 in the insurer’s bundle.
Mr Cox then made a claim for damages, and liability has been accepted for that claim[2].
[2] The claim form is dated 19 January 2022 and is document A7 in the insurer’s bundle. The liability notice for the damages claim is document AD6 in the insurer’s bundle.
Mr Cox and NRMA agreed on a lump sum to settle the damages claim. NRMA made an offer of settlement[3] which Mr Cox accepted.
[3] The offer is contained in a letter dated 4 March 2022 which is document A6 in the insurer’s bundle.
Because Mr Cox did not have a lawyer representing him, his settlement must be approved. NRMA referred the claim and the settlement to the Personal Injury Commission (the Commission).
I am a General Member of the Commission, and the proceedings were referred to me for me to decide whether to approve or not approve the settlement. I held three teleconferences in the matter and have decided to approve the settlement.
LEGISLATIVE FRAMEWORK
Approval of settlement
Because of the date of his accident, Mr Cox’s claims and his entitlement to damages is governed by the Motor Accident Injuries Act 2017 (the MAI Act). Section 6.23 of that Act provides that if an injured person is not represented by a lawyer, any settlement of damages must be approved by a member of the Commission. In my view, the approval process in the legislation is an important safety net to ensure an injured person not represented by a lawyer obtains a fair and appropriate amount of damages.
In deciding whether or not to approve the settlement I must consider the cl 7.37 of the Motor Accident Guidelines which says:
“Under section 6.23(3) of the Act, before the Personal Injury Commission may approve the settlement of a claim for damages, it must be satisfied that:
(a) the proposed settlement satisfies the timing requirements in section 6.23(1) of the Act
(b) the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement
(c) the claimant understands that they are entitled to be represented in respect of the claim by an Australian legal practitioner (d) the claimant understands the nature and effect of the proposed settlement and is willing to accept the proposed settlement”.
Damages provisions
The MAI Act provides, at s 4.3 that, in a claim for damages Mr Cox is entitled to seek:
(a) damages for non-economic loss (sometimes called non-pecuniary loss) in accordance with s 4.11, and
(b) damages for his economic or pecuniary losses under s 4.5 of the legislation including lost wages, the additional cost of accommodation and housing, funds management and any income tax paid by NRMA on any weekly statutory benefits paid.
Section 4.11 of the MAI Act says that damages for non-economic loss can only be awarded if the claimant has a whole person impairment (WPI) of greater than 10% and s 4.13 provides that the maximum amount of non-economic loss damages that can be awarded is $590,000.
Non-economic loss is defined in the MAI Act as involving:
(a) pain and suffering;
(b) loss of expectation of life;
(c) loss of amenities of life, and
(d) disfigurement.
CONSIDERATION OF THE SETTLEMENT
The elements of the claim
Mr Cox is aged 82 and is retired. He makes no claim for loss of earnings or loss of earning capacity and the nature of his injuries suggests he would not be entitled to the other types of damages mentioned in s 4.5.
Entitlement to non-economic loss is not in dispute, NRMA has had Mr Cox’s hearing tested and concedes his hearing loss attracts a WPI of more than 10% and that he is entitled to damages for non-economic loss.
There are no deductions to be made from that sum and NRMA has advised Mr Cox it will pay any Medicare expenses that may be payable[4].
[4] In an email dated 4 March 2022 which is part of document A8 in the insurer’s bundle.
The evidence
Mr Cox developed vertigo and binaural hearing loss following a concussive head injury with cochlea and vestibular effects due to the impact of airbags and deceleration of the car on impact[5].
[5] See the certificate of capacity by Dr Elsenberg – document A9 in the insurer’s bundle.
There is no suggestion that Mr Cox sustained any disfigurement as a result of the accident or that his life expectancy has been reduced because of his injury. There is also no evidence to suggest any operative or other treatment or any pain as such. The real consideration for me, when assessing non-economic loss is the loss of the amenities of Mr Cox’s life due to his hearing loss.
There are no medico-legal reports provided to me although a number of hearing test results and documents from the claimant’s doctors are in the insurer’s bundle of documents. One such report notes the claimant has mild to moderately severe hearing loss in both ears with the right worse than the left[6].
[6] Audiologist Robyn Pritchard’s letter to Dr Eisenberg is dated 20 February 2020 and is at page 33 of the insurer’s bundle.
According to the life expectancy tables commonly in use when assessing damages[7], at 83, the medium life expectancy of a man is a further 7.59 years.
[7] Cumpston Sarjeant Life expectancies 2022 (published on the website cumar.com.au).
A handwritten report from Mr Cox’s general practitioner (GP) notes the claimant was diagnosed with prostate cancer and melanoma in 2006 but had no reports of hearing loss before the car accident[8]. There is therefore no evidence before me to suggest that Mr Cox’s life expectancy should be considered below the medium
[8] Dr Eisnberg’s report dated 14 March 2021 is at page 36 of the insurer’s bundle.
Mr Cox told me at the teleconference:
(a) he is 82 years of age and will turn 83 later this year;
(b) he lives with his wife independently in their own home;
(c) he has two children who live nearby and he has several grandchildren;
(d) he wants to settle his claim because the process has been protracted and due to his age, he wants the money now and does not want it to just go into his estate;
(e) he has average health, with issues from time to time which as he said, “anyone in their 80s would have”;
(f) his only injury was damage to his hearing which he experienced from the moment of the accident, as he could not clearly hear what was going on around him as he got out of the car;
(g) he waited for a week to see if his hearing problem would resolve and then he saw his GP who said he would either get better or not and to come back and see him in six months which he did;
(h) his GP then sent him off for investigations which revealed the hearing problem;
(i) he experiences a loss of sensitivity and clarity in hearing. He says he knows people are talking to him and he can hear them talking but cannot distinguish what they are saying. He says if he can see them, he can partly read their lips to fill in the gaps, and
(j) his lack of hearing has greatly interfered with his life.
Mr Cox said that before the accident he would go to the theatre or the movies and would go out to dinner (for example the club after golf). It is this that affects him most because of the background noise and his inability to distinguish the background noise from a specific conversation. He said the hearing aids paid for by the insurer simply amplify everything, background noise and conversation. He explained this with an example. When he is driving with the radio on, he has to have it on quite high to counteract the increased volume of the road noise. He says this makes it very hard for him to travel with other people in the car.
Procedural matters
The original settlement figure proposed by the parties was $80,000. At the first teleconference after hearing from the claimant I said I would not approve the settlement. I expressed the view that while a hearing loss is unable to be ‘seen’ like a fracture or other physical injury, it is an injury that will be experienced by Mr Cox every day for the rest of his life and will interfere with his ability to enjoy every day of the rest of his life. In my view, the amount of compensation offered by NRMA was, on the evidence before me, outside the range of damages that might be awarded to Mr Cox should his claim progress to assessment.
Noting the claimant wanted to accept the offer and finalise his claim due to his age, I said I would not dismiss the application but defer it to enable Ms Rapaport to obtain instructions and for NRMA to further consider its offer.
I observed that Mr Cox accepted the first and only offer NRMA had made to him. I provided him with some figures for non-economic loss extracted from recent decisions published in the Legal Bulletin of the Commission. While not strictly comparable (because I could not find any pure hearing loss assessments) it was information that I considered would assist the parties in their negotiations.
At the second teleconference, the parties had both made additional offers but neither had been accepted.
At the third teleconference I was advised that NRMA had increased its offer to $120,000 and that Mr Cox had accepted that amount.
SHOULD I APPROVE MR COX’S SETTLEMENT?
I have decided to approve the settlement reached between the parties for the sum of $120,000 because:
(a) it is now three years since the accident and the timing requirements in s 6.23(1) have been met;
(b) there are no deductions to be made from the settlement amount and the proposed settlement is just, fair and reasonable and within the range of likely potential damages that could be assessed in the Commission, and
(c) Mr Cox is nearly 83 years of age and wants to put this accident and the claim behind him.
I have explained to Mr Cox, and he understands that he is entitled to have a lawyer but does not want to have one and that by accepting the insurer’s offer, his claim for damages is at an end.
Accordingly, pursuant to s 6.23 of the MAI Act,the proposed settlement of Mr Cox’s claim for damages is approved.
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