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ADX v Allianz Australia Insurance Ltd [2019] NSWDRS MR 101

Overview

Jurisdiction: Merit review

Catchwords: Statutory benefits – minor injuries – medical assessment cost – reasonable and necessary legal costs – medical dispute – payment of legal costs for medical assessment

Legislation cited:

  • Motor Accident Injuries Act 2017 (NSW) ss 7.13, 8.3, Schedule 1, Schedule 2(1)
  • Motor Accident Injuries Regulation 2017 reg 10(d), schedule 1, Part 1(2)
  • Motor Accident Guidelines effective 13 July 2018

Parties:

  • ADX – Claimant
  • Allianz Australia Insurance Limited– Insurer

Disclaimer: This decision has been edited to remove all unique personal identification including the name of the claimant.

Merit review certificate

View here

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

The claim:

  • Claimant: ADX
  • Insurer: Allianz Australia Insurance Limited
  • Claim Number: 37C000253

The reviewable decision:

  • Reviewable decision-maker: Fiona Laffan
  • Date of Reviewable decision: 21 January 2019
  • Nature of Reviewable decision: Costs of a Medical Dispute

The merit review:

  • Our  Reference: 10076293
  • Merit Reviewer: Colin Stoten
  • Date of Merit Review Certificate: 14 February 2019

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:
    • The Insurer is to pay to the Claimant’s solicitor’s costs of $1,783.91 in respect of the Medical Assessment of Assessors Reutens and Barnsley.
  • Effective Date: This determination takes effect on 14 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 for decision

Background

1. The Claimant was injured in a motor accident on 7 April 2018. A medical dispute arose as to whether the Claimant’s injuries were minor injuries in accordance with section 1.6 of the Motor Accidents Injuries Act 2017 (MAI Act).

2. Ultimately the Claimant’s injuries were found to be minor injuries.

3. The Claimant’s solicitors by letter dated 14 January 2019 submitted a tax invoice for costs incurred by the Claimant in connection with the medical assessment. The Insurer declined payment of the tax invoice by letter dated 19 January 2019.

4. The issue for me to determine is whether the Claimant’s solicitors are entitled to payment of costs associated with the medical assessments of Assessors Reutens and Barnsley, and if so the quantum of those costs.

5. The Insurer was not asked to and did not conduct an internal review of its decision.

6. I note 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.

7. I held a preliminary teleconference on 14 February and indicated my preliminary view and received final submissions and approval from the parties to review the medical assessment file.

Documents and information

8. I have considered the documents provided in the application and the reply and any further information provided by the parties. I have also considered the medical assessment file held by the DRS.

Submissions

9. 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.

10. The Insurer’s submissions say that there is no mechanism by which this dispute can be resolved noting that the claim for statutory benefits beyond 26 weeks has failed after the medical assessors had determined the injury to be a minor injury.

11. The Insurer, in the event that I find I can assess the costs, says that I should follow the principle that costs follow the event and as the Claimant failed then there should be no costs. Further, the Insurer says the application for medical assessment was without merit and no costs ought be allowed.

Legislation

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

  • Motor Accident Injuries Act 2017 (NSW) (“the Act”)
  • Motor Accident Guidelines effective 13 July 2018 (“the Guidelines”)
  • 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 is 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’s Reutens and Barnsley.

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 medical assessment file.

20. The Claimant was unsuccessful in her application for determination of minor injury. However having regard to the legal consequences, namely that a person is not entitled to further benefits under the MAI Act I consider it reasonable for a solicitor to investigate the medical issues and pursue the Claimant’s rights to have that issue determined by independent medical assessors that the legislation provides for.

21. The Insurer submits that costs should follow the event. I do not agree because the costs provisions allow for costs of an initial medical assessment whether the Claimant was successful or not, unlike the position with respect to costs for further assessments and reviews, although the merits of an application made ought be assessed in relation to the particular medical dispute.

22. In such circumstances I consider the assessment of costs a balancing exercise. In my view any such costs would extend to investigating the issue and obtaining treating reports and giving advice. The issues from the submissions in support of the application for medical assessment point to some evidence of complaint of radiculopathy and of a psychiatric condition. There were thus 2 medical disputes to consider and the claim proceeded to an internal review. There would appear to have been considerable work involved in obtaining medical evidence and proceeding to assessment.

23. Utilising my discretion and experience I consider it appropriate to allow legal costs of $1,320.00 plus disbursements of $463.91 as claimed.

24. 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.

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:
    • The Insurer is to pay to the Claimant’s solicitor’s costs of $1,783.91 inclusive of gst in respect of the Medical Assessments of Assessors Reutens and Barnsley.
  • Effective Date: This determination takes effect on 14 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