Zia v AAI Limited t/as AAMI
[2022] NSWPICMR 24
•26 April 2022
| CERTIFICATE OF DETERMINATION OF MERIT REVIEWER | |
| CITATION: | Zia v AAI Limited t/as AAMI [2022] NSWPICMR 24 |
| CLAIMANT: | Mohammad Zia |
| INSURER: | AAI Limited t/as AAMI |
| MERIT REVIEWER: | Katherine Ruschen |
| DATE OF DECISION: | 26 April 2022 |
| CATCHWORDS: | MOTOR ACCIDENTS- Merit review; whether costs are reasonable and necessary; schedule 2(1) (aa) of the Motor Accident Injuries Act 2017 (the MAI Act); section 8.10 the MAI Act; costs of internal review; costs of medical assessment; Schedule1(2) of the Motor Accident Injuries Regulation 2017; Regulation 10; Regulation 20; Regulation 22; Regulation 23; Held– the application is remitted to the insurer. |
| DETERMINATIONS MADE: | The reviewable decision is about whether for the purposes of section 8.10 of the Motor Accident Injuries Act 2017 (the MAI Act) costs and expenses incurred by Mohammad Zia are reasonable and necessary and is therefore a merit review matter under Schedule 2(1) (aa) of the MAI Act. 1. The reviewable decision is determined as follows: (a) the claimant is not entitled to payment of costs of or in connection with the internal review decision dated 17 March 2022, and (b) the matter is remitted back to the insurer to consider the claimant’s claim for costs of the medical assessment upon conclusion of the medical assessment. |
Issued under section 7.13(4) of the Motor Accident Injuries Act 2017
BACKGROUND
There is a dispute between Mohammad Zia (the claimant) and the insurer about whether for the purposes of section 8.10 of the MAI Act costs and expenses incurred by the claimant are reasonable and necessary.
The claimant was involved in a motor accident on 20 May 2020.
The claimant made an application for personal injury benefits under the MAI Act.
On 17 March 2022 the insurer determined by way of an internal review decision that physiotherapy was not reasonable and necessary and denied a request for same by the claimant.
The claimant has made an application to the Personal Injury Commission (Commission) for a medical assessment to determine whether referral to a physiotherapist for initial consultation is reasonable and necessary. The application for medical assessment was made by the claimant on 21 March 2022.
On 21 March 2022 the claimant also made an application for a merit review in relation to legal costs associated with the medical assessment application.
The claimant claims the maximum amount of $1,710 for regulated costs pursuant to the Motor Accident Injuries Regulation 2017 (the Regulation) together with an amount for unregulated disbursements.
SUBMISSIONS
The claimant:
(a) submits their legal representatives have investigated their entitlement, sought and reviewed evidence, complied with the obligations of the MAI Act, Regulation and Guidelines and drafted submissions in an attempt to resolve the dispute, and
(b) seeks determination of costs by way of merit review on the basis the insurer failed to respond to their request that the insurer concede regulated costs are payable for the dispute.
The insurer submits that given the medical assessment has not yet taken place, the request for the payment of costs in conjunction with the dispute is premature and that it will negotiate costs of the dispute following the outcome of the medical assessment.
REASONS
Pursuant to Schedule 2(1)(aa) 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 is a merit review matter.
The insurer has not conducted an internal review on the question of costs under section 8.10. However, pursuant to Regulation 10 an internal review is not required before making a merit review application under Schedule 2(1)(aa).
Relevantly, section 8.10 permits the recovery of costs and expenses in relation to claims for statutory benefits as follows:
(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.
(4) …
Schedule 1 of the Regulation sets out the matters in which costs are permitted. Under Schedule 1(2) costs are permitted in connection with a medical assessment under Division 7.5 of the MAI Act.
Maximum costs where costs are permitted under the Regulation are fixed under Regulation 22.
Regulation 20 provisions for certain costs on a non-regulated basis.
Pursuant to Regulation 23 “no costs are payable for legal services provided to a claimant or to an insurer in connection with an application for internal review by the insurer under Part 7 of the Act”.
The claimant’s submissions suggest costs are claimed under section 8.10 in respect of the internal review process. However, as outlined above, pursuant to Regulation 23 there is no entitlement to costs incurred in connection with an application to an insurer for internal review. Accordingly, to the extent there is a claim for costs of or in connection with the internal review decision dated 17 March 2022, it is refused on the basis such costs are not permitted under the MAI Act and Regulation.
To the extent the claimant claims costs of the Division 7.5 medical assessment, prima facie the claimant is entitled to regulated costs of the medical assessment under Schedule 1(2) of the Regulation to a maximum of $1,710 together with any disbursements that fall under Regulation 20. However, whether such costs are “reasonable and necessary”, as required by section 8.10 of the MAI Act, cannot be known until the medical assessment is complete.
The medical assessment application was lodged on 21 March 2022, the same day as this merit review application. Accordingly, save for the costs of drafting the medical assessment application and its supporting submissions most, if not all, costs incurred on or before 21 March 2022 would not be costs in connection with the medical assessment. This is also borne out by the claimant’s description of the costs as being costs to “investigate [their] entitlement, seek and review evidence, comply with obligations of the MAI Act, Regulation and Guidelines and draft submissions in an attempt to resolve this dispute”.
Indeed, the need to prepare a medical assessment application (and in turn incur costs of same) does not arise until such time as the insurer issues their internal review decision. In this case, it was issued on 17 March 2022. Just one business day (18 March 2022) followed between receipt of the internal review decision and filing the application for medical assessment.
It follows that the claimant does not begin to incur costs in connection with the medical assessment until on or after 17 March 2022 and that costs incurred before the internal review outcome are costs of the internal review (which are not permitted by the Regulation) and/or of the matter generally and not costs in connection with the medical assessment.
In any event, as the medical assessment has not concluded, a claim for costs in connection with the medical assessment and any merit review as to whether such costs are reasonable and necessary is premature. Accordingly, the matter is remitted back to the insurer. Once the medical assessment is complete the insurer should determine and pay the amount of reasonable and necessary costs incurred by the claimant in connection with the medical assessment, up to the maximum of $1,710 for those costs that are regulated.
If a dispute arises following the medical assessment as to whether costs of the medical assessment are reasonable and necessary, it is open to the claimant to then make a merit review application at that time under Schedule 2(1)(aa) of the MAI Act.
CONCLUSION
The claimant is not entitled to payment of costs in connection with the internal review decision dated 17 March 2022.
Prima facie the claimant is entitled to costs of the medical assessment that are reasonable and necessary, up to a maximum of $1,710 for those costs that are regulated. However, as the medical assessment has not yet concluded any determination as to costs of the medical assessment is premature. Accordingly, this merit review is determined as follows:
(a) the claimant is not entitled to payment of costs of or in connection with the internal review decision dated 17 March 2022, and
(b) the matter is remitted back to the insurer to consider the claimant’s claim for costs of the medical assessment upon conclusion of the medical assessment.
LEGISLATION AND GUIDELINES
In making this decision, I have considered the following:
· The application, reply and supporting documentation.
· MAI Act, and
· the Regulation.
Katherine Ruschen
Merit Reviewer
Personal Injury Commission
0
0
0