ACV v NRMA Insurance Ltd [2019] NSWDRS CA 074

JurisdictionMiscellaneous Claims Assessment
CatchwordsReasonable and necessary costs – legal costs – police brief – contributory negligence – exceptional circumstances – costs penalty – liability – surveillance footage
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 3.21, 6.21, 7.36(4), 8.10, 8.10(4), Schedule 2(3)(d) & (e)
Motor Accident Injuries Regulation 2017
Motor Accident Guidelines 2017 (as amended on 15 January 2019) cl 7.445
Cases cited N/A
Text cited N/A
Parties ACV – Claimant
NRMA Insurance Limited – Insurer 
Disclaimer This decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Miscellaneous Claims Assessment Certificate

Reasons for decision

Issued in accordance with section 7.36(4) of the Motor Accident Injuries Act 2017


1.   This determination relates to a Miscellaneous Claim, which is a reviewable decision under Schedule 2 (3) (D) and (E) of the Motor Accident Injuries Act 2017 ('the Act') about recovery of costs and expenses pursuant to s.8.10 and whether a costs penalty may be imposed on an Insurer under s.3.21 of the Act.


2.   The Claimant was injured in a motor vehicle accident on 20 May 2018.

i.   On 7 September 2018, the Insurer admitted liability but alleging 50% contributory negligence.

ii.   On 10 September 2018, the Insurer applied for the Police Brief, including notebook entries.

iii.   On 21 September 2018, the Claimant's solicitor requested a copy of the Police Brief.

iv.   On 23 October 2018 on Internal Review, the Insurer reversed its decision, finding the Claimant wholly at fault.

v.   On 22 November 2018, the Claimant made an application to DRS to review liability.

vi.   On 6 December 2018, the police provided the full brief to the Claimant's solicitor.

vii.   On 10 December 2018, the Claimant provided a copy to the Insurer.

viii.   On 12 December 2018, the Insurer admitted liability.

ix.   On 18 January 2019, the Claimant requested costs, plus a costs penalty.

Issues in dispute

3.   The issues in dispute are:-

i.   whether, for the purposes of section 8.10, the costs incurred by the Claimant are reasonable and necessary;

ii.   whether a costs penalty should be imposed under section 3.21 on the basis that there was no reasonable ground for denial of liability.

Submissions by the Claimant 18 January 2019

4.   After setting out the background to the accident and the Insurer's liability decision the submission proceeds:

i.   the initial decision as to liability was that the fault was equal;

ii.   at the Internal Review stage the Insurer reversed the decision completely denying liability and consequentially further statutory benefits;

iii.   the Insurer was aware that it did not have the documents requested from New South Wales Police pursuant to GIPA;

iv.   the Insurer at the time of the Internal Review was aware and expressly noted that the driver had been issued with a traffic infringement notice pursuant to r.62 (1)(a) for not giving way to a pedestrian at lights;

v.   the Insurer clearly made a mistake in relation to the decision on liability;

vi.   the Insurer issued its decision on liability without reviewing all of the required documents that it should have reviewed;

vii.   the Insurer should have reviewed the police file before making its decision;

viii.   the Insurer admitted its mistake and denied to accept liability on 12 December 2018. This was done after the Insurer reviewed surveillance footage which showed the Claimant crossing at the pedestrian crossing and being hit by a car;

ix.   the Insurer decided to change its decision on liability after it reviewed documents the Claimant provided to it which documents it should have obtained in the first place;

x.   the Claimant incurred costs by requesting documents from the Police under the GIPA application and should be reimbursed;

xi.   the Claimant incurred costs under the original DRS Application and should be allowed to recover those costs from the Insurer pursuant to s.8.10 and s.7.37 of the Motor Accidents Injuries Act 2017;

xii.   s.6.21 of the Act should be applied. The Insurer made a mistake in denying liability without having first reviewed documents available from New South Wales Police Force;

xiii.   the excuse that the Insurer did not then have the available material is not a valid excuse;

xiv.   the Insurer had enough time to request the documents but did not;

xv.   a costs penalty should apply.

Submissions by the Insurer - 1 February 2019

5.   The submission summaries the four issues raised by the Claimant's submissions and then sets out the chronology and the numbering:

[5]   The Claimant's DRS Application was premature. Both the Claimant and the Insurer were waiting for the full Police Brief. On receipt of the further information including the Police Brief the Claimant could have submitted the Police Brief to the Insurer for re-consideration of liability after the solicitor received it on 6 December 2018.

[7]   The Claimant can only recover legal costs 'incurred by the Claimant in connection with the Claim." There is no evidence that the Claimant entered into a fee agreement or has in fact incurred the costs of retaining her solicitor.

[8]   s 8.10(4) allows the DRS to permit payment of costs by a Claimant but only if satisfied that "exceptional circumstances exist that justify payment of legal costs incurred by the Claimant".

[9]   There are no exceptional circumstances. The Insurer promptly requested the Police Report, a statement from its insured driver and was required to admit liability within 28 days. The Insurer proceeded to assess and determine liability with the material available at the relevant time.

[1O]   Both the Insurer and the Claimant's solicitor experienced delay in receiving the full Police Brief.

[11]   The Insurer promptly reviewed the Police Brief and admitted liability. The Claimant's rights to statutory benefits were largely unaffected.

[12]   Rather than proceed to DRS the parties ought to have followed up the outstanding Police Brief to determine if such evidence negated the need for any DRS Application.

[13]   Denies the costs penalty is warranted. GIO determined liability within 28 days of receiving the claim for statutory benefits and after receiving the NSW Police report and an accident report from the insured driver on 7 September 2018.

[14]   The Insurer requested the complete Police Brief on 24 September 2018. The Claimant's solicitor made a request on 21 September 2018. Both parties were provided with the brief in December 2018.

[15]   A costs penalty is not justified. The Insurer was required a determination of liability within legislative timeframes. There was an unexpected delay in receiving the complete Police Brief. GIO attempted to further investigate liability by requesting the Police Brief approximately 14 days after it did advise liability. Had it not been for the delay GIO would have had the opportunity to further assess and re-consider liability.

The Relevant Legislation

6.   s.8.10 of the Motor Accident Injuries Act 2017 provides:

'(1)   a claimant for statutory benefit is.......entitled to recover from 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;

(3)   the 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 Dispute Resolution Service;

(4)   the Dispute Resolution Service can permit payment of legal costs incurred by a Claimant but only if satisfied that.....

(b)   exceptional circumstances exist that justify payment of legal costs incurred by the claimant'

7.   s.6.21 of the Act provides:

'(1)   if an insurer denies liability.... . the Claims Assessor may, in assessing costs on the claim, impose a costs penalty....if the Claims Assessor is of the opinion that there was no reasonable basis for the denial of liability;

(c)   the costs penalty that may be imposed..... is a penalty of up to 25% (imposed by increasing the costs to be awarded against the insurer.. . ..'


8.   The Insurer is under a statutory obligation to make a decision on liability within 28 days of the lodgement of the claim. The position it took at the time was reasonable taking into account the information it then had available namely the documents then provided by the Police which were limited in scope and did not include the CCTV images and the statement of the driver, each of the Claimant and the driver gave a different version and the apportionment of 50% liability to the Claimant was a not unreasonable decision to make at that time.

9.   The decision on Internal Review of 23 October 2018 to reverse the initial decision and to find th Claimant wholly at fault was unreasonable:

i.   there was no additional evidence to justify that decision;

ii.   the Internal Reviewer knew that the additional material requested by the Police had not yet been provided by the New South Wales Police pursuant to the GIPA Act had not been provided;

iii.   there was no or no adequate consideration of the proposition that the Insurer held the onus of proof for the purposes of cutting off statutory benefits of establishing that the pedestrian was wholly at fault;

iv.   it was as a result of the decision on Internal Review that the Claimant had to proceed with an Application to DRS for resolution of the dispute as to whether or not the Claimant was wholly at fault;

vi.   that Application was made on 22 November 2018 by Alex Lopes solicitor on behalf of the Claimant;

vii.   the entry into a Costs Agreement as between the solicitor and the Claimant is not a pre-condition to the incurrence of legal costs. The costs agreement relates to retainer and obligations under the Legal Profession Uniform Law 2014. The obligation to pay reasonable legal costs arises pursuant to the retainer of the solicitor and the fact that the solicitor acted for the Claimant in the matter;

viii.   the Insurer is obliged to pay the reasonable and necessary costs as per the regulations enacted under the Motor Accidents Injuries Act 2015 and these amount to $1,663.00 plus GST;

ix.   the Claimant is also entitled to recover the costs of the GIPA application namely $30.00.

x.   as to the costs penalty the question arises as to whether or not the conduct of the Insurer was such as to give rise to an entitlement to a 25% costs penalty;

xi.   the original decision which was reversed was that each party was equally liable. There was a legitimate basis in the absence of documents for coming to that decision;

xii.   notwithstanding that there was, in my view, no reasonable basis for the Insurer to determine that the Claimant was wholly at fault, this was not a matter which gave rise to any additional costs or work on the part of the Claimant's solicitor. Had the original decision been re-affirmed (and remember that this was before the surveillance images became available) an Application would still have been made to the DRS for review of that decision;

xiii.   the approach of the Internal Reviewer was probably more in the nature of an error of judgment than acting unreasonably;

xiv.   in all the circumstances, I do not consider this an appropriate case for the provision of the costs penalty.

Legal Costs

10.    I am satisfied that the Claimant is entitled to the payment of legal costs. I allow the Claimant's costs at $1,663.00 together with $30.00 to which GST is added (under cl 35 of the Regulation) making the total awarded for costs $1,862.30 inclusive of GST.

Terence Stern
DRS Claims Assessor
Dispute Resolution Services
Dated: 8 March 2019