|NSW DISPUTE RESOLUTION SERVICE (NSWDRS)|
|Catchwords||Legal costs – costs of medical assessment – minor injuries – DRS application costs – physical medical dispute application – psychological medical dispute application – reasonable and necessary costs – medical assessment cost|
Motor Accident Injuries Act 2017 (NSW) ss 7.13(4), 7.17, 7.20, 8.10, Schedule 1 clause 2, Schedule 2 clause 1(aa) & 2(e)|
Motor Accident Injuries Regulation 2017 Schedule 1 clause 2(1) & (3)
Motor Accident Guidelines
AFK – 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
Reasons for decision
Issued in accordance with section 7.13(4) of the Motor Accident Injuries Act 2017
1. AFK was injured in a motor vehicle accident on 22 May 2018. Allianz Australia Insurance Limited (“the Insurer”) accepted AFK’s claim under the Motor Accidents Injuries Act 2017 (“the Act”).
2. On 24 September 2018, the Insurer issued a Liability Notice to AFK declining liability for statutory benefits after 26 weeks of the claim on the basis that her injuries, both physical and psychological, had been determined as ‘minor injuries’ under the Act.
3. AFK disputed this decision and lodged an application for medical assessment with the Dispute Resolution Service (“DRS”).
4. Assessor Michael McGlynn conducted a medical assessment of AFK’ physical injuries and determined on 12 April 2019 that those injuries fell outside of the definition of ‘minor injury’. The Insurer lodged an application for review of this assessment however subsequently withdrew the application.
5. On 7 May 2019, AFK withdrew the component of her application for medical assessment of the psychological injury, in light of the determination that her physical injuries were non-minor.
6. AFK’s legal representatives, Stephen Young Lawyers, issued four invoices to the Insurer for legal costs. The Insurer made payment of one invoice in the amount of $1,796.26 which referred to the medical assessment of the physical injuries and another invoice relating to the Insurer’s application for review of that assessment.
7. The Insurer verbally declined to make payment of an invoice in the amount of $1,805.76, which referred to an application for medical assessment of the psychological injury, on 6 June 2019. This is the ‘reviewable decision’ for the purposes of the Act. The issue in dispute is whether AFK is entitled to recover from the Insurer the legal costs claimed in that invoice pursuant to section 8.10 of the Act, and if so, the quantum of those costs.
8. It does not appear that AFK sought an internal review by the Insurer of the reviewable decision and I note that clause 10(d) of the Regulations excludes disputes arising under section 8.10 of the Act from the requirement of internal review.
9. AFK lodged her application in respect to the dispute with the DRS on 6 June 2019. The application was accepted and falls within the jurisdiction of the DRS as a merit review matter under Schedule 2(1)(aa) of the Act.
10. I have considered the documents provided in the application and the reply and any further information provided by the parties. I have also considered AFK’s application for medical assessment dated 18 October 2018.
11. In conducting my review, I have considered the following legislation and guidelines:
- Motor Accident Injuries Act 2017 (NSW) (“the Act”)
- Motor Accident Guidelines 2017 (as amended on 15 January 2019) (“the Guidelines”)
- Motor Accident Injuries Amendment Regulation 2017 (NSW) (“the Regulations”)
12. AFK’ legal representatives make the following submissions on her behalf:
b. On 6 June 2019, a representative of the Insurer advised them via telephone that the Insurer is not able to support further legal costs as they had already paid for the minor injury (physical) dispute application.
c. According to clause 2(3) of Schedule 1 of the Regulations, insurers are liable to pay the costs of legal services of claimants.
d. However, there is no provision in the Act, Guidelines or the Regulations indicating whether insurers are liable to pay for legal costs for two minor injury DRS applications.
e. It is submitted that as physical and psychological minor injuries are considered separately and independently from each other and two assessments would had been conducted, legal representatives should be able to charge twice for legal services provided as two sets of submissions and evidence have been gathered.
f. AFK would like the assistance of DRS in helping her chase the payment from the Insurer and to comment whether the Insurer’s delay in responding to their request for 143 days is compliant with the Act, Guidelines and Regulation.
13. The Insurer provides a summary of the dispute and of the relevant legislation and submits:
b. Section 7.17 then defines a medical assessment to be an assessment of a medical assessment matter. The medical assessment matter in this case is “whether the injury caused by the motor accident is a minor injury for the purposes of the Act.”
c. As such, the costs payable for the determination of whether AFK has a minor or non- minor injury caused by the motor vehicle accident (physical, psychological or both) is limited to 16 monetary units.
d. It is irrelevant whether AFK has lodged separate applications for each injury sustained because the medical assessment matter as a whole pertains to whether AFK has minor or non-minor injuries. As such, the Insurer submits that the legal fees are capped at 16 monetary units for the entire dispute type.
e. There are no exceptional circumstances in this application, AFK’ legal representatives are simply charging outside the limits of the legislation.
f. In any event, even if the Merit Review is satisfied that AFK has an entitlement to two sets of costs for physical and psychological minor injury, the Insurer submits that AFK’ legal representatives are not entitled to any further fees than the 16 monetary units already paid.
g. Section 8.10 of the Act limits the entitlement of AFK to seek legal fees from the Insurer to those costs that are reasonable and necessary.
h. AFK’ legal representatives essentially made no submissions as part of the application other than to list a series of injuries. AFK’ legal representative did not engage in any way with the legislation and the definition of minor injury. No references were made to any of the relevant diagnoses or medical opinions provided by AFK’ treating practitioners.
i. The Insurer provides an extract of the submissions made by AFK legal representatives.
j. The Insurer submits, as such, it objects to any more than 16 monetary units being payable for the minor injury dispute as it is clear very limited to no legal services have been provided by AFK’ legal representatives.
14. The issue in dispute before me is AFK’s entitlement to legal costs in the amount of $1,805.76 claimed in an invoice dated 14 January 2019 (ref: AFK SYO:1425-2) issued by AFK’s legal representatives to the Insurer. The invoice refers to the professional costs of ‘DRS Application – Medical Dispute (Psychological)’.
15. The Insurer declined to make payment of the invoice on 6 June 2019 on the basis that it had already made payment of another invoice in the amount of $1,796.26 (same invoice ref). This invoice referred to the professional costs of ‘DRS Application – Medical Dispute (Physical 2)’.
16. AFK’ legal representatives submit that insurers are liable to pay the costs of legal services of claimants pursuant to clause 2(3) of Schedule 1 of the Regulations. They submit that there is no provision in the Act, the Guidelines or the Regulations indicating whether insurers are liable to pay for legal costs for “two minor injury DRS applications”.
17. AFK’ legal representatives submit that as physical and psychological minor injuries are considered separately and independently from each other and two medical assessments would had been conducted, legal representatives should be able to charge twice for legal services provided as two sets of submissions and evidence have been gathered.
18. The Insurer makes a number of submissions in respect to the provisions of the Act and the Regulations relating to the recovery of legal costs of medical assessments. The Insurer submits that costs, further to the $1,796.26 already paid to AFK’ legal representatives, are not recoverable as the maximum costs for the medical assessment under clause 2(1), Schedule 1 of the Regulations has been paid.
19. I agree with the submissions of the Insurer in this respect and note that this responds to the submissions of AFK’ legal representatives regarding the legislation and the Guidelines not indicating whether insurers are liable to pay for legal costs for “two minor injury DRS applications”.
20. In this matter, it appears that AFK’s legal representatives have issued the two invoices referred to above relating to the dispute about minor injury, on the basis that AFK has both physical and psychological injuries. I note that AFK’s legal representatives only lodged one application for medical assessment however, listing a number of different physical injuries and a psychological injury, and attaching one set of very brief submissions.
21. Nevertheless, regardless of whether two separate applications are lodged or not, I note that section 7.20 of the Act provides that a “medical dispute” can be referred to the DRS for a “medical assessment”. A definition for “medical assessment” is provided at section 7.17 as follows:
22. Schedule 2, clause 2(e) of the Act declares a dispute about whether an injury is a ‘minor injury’ as a “medical assessment matter”.
23. It is important to note that the maximum costs provided at clause 2(1), Schedule 1 of the Regulations relates to costs in connection with a “medical assessment”, which is defined above to be an assessment of a “medical assessment matter”. The maximum of 16 monetary units therefore does not relate to injuries or types of injuries or the number of applications made to the DRS, but rather the “medical dispute” that has been referred to the DRS for a “medical assessment”. In this case, the medical dispute is regarding ‘minor injury’.
24. Accordingly, given that the invoices with reference AFK SYO:1425-2 relate to one ‘medical dispute’ about ‘minor injury’, that was referred to the DRS, I consider the maximum of 16 monetary units applies in respect to AFK’s application for medical assessment dated 18 October 2018.
25. The Insurer confirmed with the DRS on 25 July 2019 that payment in the amount of $1,796.26 has been made to AFK’s legal representatives for the invoice referring to ‘DRS Application – Medical Dispute (Physical 2)’. In these circumstances, I am not able to permit any further costs as AFK has recovered the maximum costs for the medical dispute regarding minor injury.
26. I find that AFK is not entitled to recover the legal costs claimed in the invoice ref: AFK SYO:1425-2, dated 14 January 2019, in the amount of $1,805.76 for professional costs of ‘DRS Application – Medical Dispute (Psychological)’.
27. The Insurer’s reviewable decision of 6 June 2019 is affirmed.
Merit Reviewer and Claims Assessor
Dispute Resolution Service