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ADG v GIO General Ltd [2019] NSWDRS MR 085

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsLegal costs  - claims assessor – merit reviewer  – legal costs for medical assessment
Legislation citedMotor Accident Injuries Act 2017: Section 8.10 ; Schedule 2(1)(aa)
Cases citedN/A
Text citedN/A
PartiesADG – Claimant
GIO General Limited - Insurer
DisclaimerThis decision has been edited to remove all Unique Personal Identification including the name of the Claimant.

Merit Review Certificate

View the certificate

Issued under section 7.13(4) of the Motor Accident Injuries Act 2017

The Claim
ClaimantADG
InsurerGIO General Limited
Claim NumberY056938009-01

The Reviewable Decision
Reviewable decision-makerAaron Young
Date of Reviewable decision30 November 2018
Nature of Reviewable decisionCosts of a Medical Dispute

The Merit Review
Our Reference10071878
Merit ReviewerColin Stoten
Date of Merit Review Certificate11 February 2019

Merit Reviewer’s Determination

This determination relates to a merit review matter, which is a reviewable decision as a Schedule 2, 1(aa) matter of the Motor Accident Injuries Act 2017, about legal costs.

My determination of this referral is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
    o The Insurer is to pay to the Claimant’s solicitor’s costs of $616.60 in respect of the Medical Assessment of Assessor Wong dated 12 October 2018.
  • Effective Date: This determination takes effect on 11 February 2019.
  • Legal Costs: The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017 is $nil.

A brief statement of my reasons for this determination are attached to this certificate.


Colin Stoten
Merit Reviewer & Claims Assessor, Dispute Resolution Service

Reasons

Background

1.  The Claimant was injured in a motor accident on 1 February 2018. A medical dispute arose as to whether the Claimant’s proposed right shoulder surgery by Dr Chia was reasonable and necessary. That dispute was determined by Medical Assessor James T Wong on 12 October 2018 and he found that such treatment did not relate to the injuries caused by the motor accident. In reaching his conclusion Dr Wong found that the Claimant’s treating specialist Dr Chia had not said the proposed surgery was due to the after effects of the accident, and that the need for the surgery was most likely due to pre-existing degenerative changes.

2.  The Claimant’s solicitors by letter dated 29 October 2018 submitted a tax invoice for costs incurred by the Claimant in connection with the medical assessment. The Insurer declined payment of the tax invoice.

3.  The issue for me to determine is whether the Claimant’s solicitors are entitled to payment of costs associated with the medical assessment by Dr Wong, and if so the quantum of those costs.

4.  The Insurer did not conduct an internal review of its decision.

5.  I held a preliminary teleconference on 6 February and indicated my preliminary view and received final submissions and approval from the parties to review the MAS file relating to Assessor Wong’s assessment.

6.  It is agreed that the requirement for an internal review does not apply to this issue as it is specifically excluded by operation of Regulation 10(d) of the Motor Accident Injuries Regulation.

Documents and information

7.  I have considered the documents provided in the application and the reply and any further information provided by the parties.

Submissions

8.  The Claimant says that Schedule 1, Part 1, clause 2(1) permits payment of legal costs of a Claimant in connection with a medical assessment under Division 7.5 of the Act, such costs are as allowed by the Claims Assessor.  The Claimant also seeks a costs uplift under s8.10(4) and the costs of this application pursuant to Section 8.10(4) of the Act. The costs sought by the Claimant are $1,600 plus GST and disbursements of $176.60 inclusive of GST.

9.  The Insurer in detailed submissions says such costs are not payable unless assessed by a Claims Assessor in relation to a claim for damages in much the same way as such costs are assessed under the 1999 Act, or by a court. Further the submission is made that the payment of such costs is not permitted by the Regulations or the DRS as required by section 8.3 (4) of the Act. The only exception is found in s8.10(4) which provides for payment in exceptional circumstances and there is nothing exceptional about the circumstances about this claim.

10.  The Insurer says the construction of clause 2 of Part 1 which deals with legal costs in respect of medical disputes is such that costs under clause 2 (1) can only be allowed by ‘the Claims Assessor or Court’ and that such restriction is not placed on the operation of costs under subclauses (2) or (3) of clause 2.

11.  Finally the Insurer points to its interpretation as to how the scheme for medical assessments operates, that is, costs of this type of dispute only arise if there is a successful review of an original MAS assessment.

Legislation

12.  In conducting my review I have considered the following legislation and guidelines:

a.  Motor Accident Injuries Act 2017 (NSW) (“the Act”)
b.  Motor Accident Guidelines effective 13 July 2018 (“the Guidelines”)
c.  Motor Accident Injuries Regulation 2017 (NSW) (“the Regulation”)

Reasons

13.  Section 8.3 of the Act provides for the fixing of maximum costs recoverable by Australian legal practitioners. Subsection (4) provides that such practitioner is not entitled to be paid legal costs for legal services provided to a party to a claim for statutory benefits unless those legal costs are permitted by the Regulations or the DRS.

14.  The costs issue I have been asked to determine has been referred to me as a merit review matter pursuant to Schedule 2, Clause 1 (aa) which refers to the issue in the following terms:

“whether for the purposes of Section 8.10 ……….. the costs and expenses incurred by the claimant are reasonable and necessary”

15.  Section 8.10 permits recovery of reasonable and necessary legal costs in a claim for statutory benefits. Section 8.10 is qualified by subsections (2), (3) and (4) which provide for the recovery of costs in a claim for statutory benefits if payment is permitted by the Regulations or the DRS.

16.  Costs are regulated by Schedule 1, Part 1, clause 2 of the Regulations, and subclause (1) limits such costs to 16 monetary units.  Such reasonable and necessary costs can only be allowed by the Claims Assessor or Court. The Regulations do not provide for such costs to be allowed by a merit reviewer.

17.  Jurisdiction is conferred by Schedule 2 clause 1 subclause (aa) of the Act as a merit review matter however having regard to the requirement that such costs can only be allowed by the Claims Assessor it is only a Claims Assessor who can exercise the discretion permitted by the Act. Accordingly in my view the dispute concerning costs of this medical assessment is not a matter which can be dealt with by a merit reviewer as this is not permitted by the regulations referred to above.

18.  I consider that as I am a claims assessor duly appointed I have jurisdiction to determine this dispute and to assess the Claimant’s legal costs in respect of the medical assessment by Assessor Wong. I do not consider that I am required to rely upon section 8.10(4)(b) of the Act for jurisdiction.

19.  Having established that I have jurisdiction I am required to assess the Claimant’s reasonable and necessary legal costs in respect of the medical assessment. I have now with the approval of the parties accessed the MAS file.

20.  The Claimant was unsuccessful in her application for determination of a treatment dispute and it would appear the treating surgeon did not even provide an opinion that the need for the proposed surgery resulted from injuries arising from the accident. The treatment dispute arose when the Insurer by letter dated 6 July 2018 denied approval for right shoulder surgery and that they were awaiting a report from the Claimant’s treating practitioner. It seems such report was not forthcoming as the Insurer ultimately declined payment on 30 November 2018. The last report from the treating surgeon Dr Chia was to the effect that the Claimant had enquired of him as to whether the MVA could have caused the shoulder injury necessitating surgery, but he makes no further comment. There is a clear causation issue due to the delay in reporting any shoulder injury or problems for several weeks. Assessor Wong has now resolved that issue in favour of the Insurer.

21.  I would have thought that before embarking on the costly exercise of a MAS treatment dispute it would have been imperative to have available a report from the treating surgeon dealing with the causation issue. This apparently did not occur and now Assessor Wong has determined that the shoulder surgery is not related to the MVA.

22.  In such circumstances I do not consider the Claimant’s solicitors are entitled to recovery of the maximum legal costs in respect of the medical assessment of Assessor Wong. In my view any such costs would extend to investigating the issue and obtaining treating reports and giving advice. Such costs and disbursements are modest in my view having regard to the end result and the comments of Assessor Wong and the treating records could of course be utilised for the general purposes of advising the Claimant in respect of her claim generally. I consider it appropriate to allow legal costs of $440.00 plus disbursements of $176.60 as claimed.

23.  The Claimant has been successful in respect of the legal position regarding whether costs of a medical assessment are recoverable. Ordinarily the Claimant’s solicitors would be entitled to costs of the application to the DRS in respect of this dispute but unfortunately I consider that costs of this application are not recoverable because it is not a regulated merit review matter which attracts payment of legal costs under Schedule 1, Part 1, of the Regulations. There are only a limited number of merit review matters for which costs are payable as set out in subparagraph (2) and this application is not one of them.

24.  The Claimant seeks however that I apply my discretion under section 8.10(4)(b) of the Act which provides for payment of costs in exceptional circumstances, although its submissions refer to extenuating circumstances. I do not consider that the costs incurred in respect of this dispute are exceptional. This application was precipitated by the Insurer’s refusal to pay the Claimant’s costs however for reasons different to those I have referred to in these reasons. Ultimately I have found those costs to be modest for the reasons indicated and the application to MAS failed. I therefore allow no costs of this application.

Determination

My determination of the Merit Review is as follows:

  • The reviewable decision is set aside and the following decision is made in substitution for the reviewable decision:
    o The Insurer is to pay to the Claimant’s solicitor’s costs of $616.60 in respect of the Medical Assessment of Assessor Wong dated  12 October 2018.
  • Effective Date: This determination takes effect on 11 February 2019.
  • Legal Costs: The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017 is $nil.

Colin Stoten
Merit Reviewer & Claims Assessor,  Dispute Resolution Service