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AGF v NRMA Insurance Australia Limited [2019] NSWDRS MR 163

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
JurisdictionMerit Review
CatchwordsMedical dispute – minor injury – statutory benefits – medical assessment – legal costs – reasonable and necessary costs – physical injury – psychological injury  – multiple invoices
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 7.13(4), 7.17, 7.20, 8.10, Schedule 2 clause 1 (aa), Schedule 2 Clause 2(e)
Motor Accident Injuries Regulation 2017 reg 10(d), Schedule 1 Clause 2(1) & 2(3)
Motor Accident Guidelines 2017 (as amended on 15 January 2019)
Cases cited N/A
Text cited N/A
Parties AGF – Claimant
NRMA Insurance Australia 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

Background

1.   AGF was injured in a motor vehicle accident on 12 July 2018. AGF made a claim with NRMA Insurance Australia Limited (“the Insurer”) for both physical and psychological injuries. The Insurer accepted AGF’s claim under the Motor Accidents Injuries Act 2017 (“the Act”).

2.   On 2 November 2018, the Insurer issued a Liability Notice to AGF declining liability for statutory benefits after 26 weeks of the claim, on the basis that his injuries had been determined as ‘minor injuries’ under the Act.

3.   AGF disputed this decision and lodged two applications for medical assessment with the Dispute Resolution Service (“DRS”) on 15 January 2019, one relating to his physical injuries and the other relating to his psychological injury.

4.   Assessor Alan Home conducted a medical assessment of AGF’s physical injuries and determined on 21 March 2019 that those injuries were ‘minor injuries’ for the purposes of the Act. Assessor Patricia Jungfer conducted a medical assessment of AGF’s psychological injury and also determined on 8 April 2019 that this injury was a ‘minor injury’.

5.   AGF’s legal representatives, Stephen Young Lawyers, issued two invoices to the Insurer for legal costs. The Insurer made payment of one invoice in the amount of $1,796.26 on 3 May 2019, referring to the application for medical assessment of the physical injuries.

6.   The Insurer did not make payment of the second invoice in the amount of $1,796.26, which referred to an application for medical assessment of the psychological injury, and declined in writing on 4 July 2019 to make payment. This is the ‘reviewable decision’ for the purposes of the Act. The issue in dispute is whether AGF 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.

7.   It does not appear that AGF 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.

8.   AGF lodged his 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.

Documents considered

9.   I have considered the documents provided in the application and the reply and any further information provided by the parties. I have also considered AGF’s applications for medical assessment dated 15 January 2019.

Legislation

10.   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”)

Submissions

11.   In the application for merit review, AGF’s legal representatives make the following submissions on his behalf:

  • They requested the Insurer to pay AGF’s professional legal costs for lodging the application with SIRA (DRS 8-2e Minor injury psychological) on 22 April 2019, 3 May 2019 and 6 June 2019 but they have not received any reply.
  • According to clause 2(3) of Schedule 1 of the Regulations, insurers are liable to pay the costs of legal services to the applicant.
  • AGF would like the assistance of DRS in helping him chase the payment from the Insurer and to consider whether the refusal to respond to the legal representative’s emails is compliant with the Act, Guidelines and Regulation.

12.   The Insurer has not lodged a reply. In an email dated 2 July 2019, the Insurer submitted that it had already made payment of the invoice dated 22 April 2019 and attached a list of payments showing that payment of the invoice had cleared on 3 May 2019. The Insurer submitted that as such the dispute should be dismissed.

13.   AGF’s legal representatives responded in an email dated 3 July 2019. They contended that the Insurer had made payment for the invoice relating to the application for assessment of his physical injuries but the invoice relating to the application for his psychological injuries remained unpaid. Therefore, the dispute had not been resolved yet.

14.   In an email dated 4 July 2019, the Insurer responded:

  • A copy of the Insurer’s internal review of the minor injury decision dated 29 November 2018 is attached. It is clear that the Insurer addressed both the physical injuries and the psychological injury.
  • Stephen Young Lawyers subsequently lodged two separate DRS applications for the same minor injury dispute on 15 January 2019 (one for physical injuries and another for the psychological injury). It appears that DRS have also treated both DRS applications under the one dispute/application (SIRA application number 10074736).
  • The Insurer maintains that only one set of professional legal costs are payable as it related to one minor injury decision.

15.   In an email dated 4 July 2019, AGF’s legal representatives submitted:

  • On 2 November 2018, the Insurer contended that AGF sustained “a minor injury” without specifying whether it was either a physical or psychological minor injury or both are of minor injury status.
  • Therefore, the internal review on 8 November 2018 was lodged separately on physical and psychological bases to challenge the decision as we had to assume that both injuries were deemed as minor.
  • This was later confirmed on the submission of the Insurer dated 15 February 2019. On page 3 of the submission, it was clear that the Insurer had to make submissions on both physical and psychological injuries.
  • DRS also concurred with the necessity to determine the status of injury as two assessments had to be conducted.

16.   The Insurer maintained in an email dated 4 July 2019:

  • The Insurer disagrees with this position and will await a decision from DRS regarding this issue.

Reasons

17.   The issue in dispute before me is AGF’s entitlement to legal costs in the amount of $1,796.26 claimed in an invoice dated 22 April 2019 (ref: AGF SYO:1435-2) issued by AGF’s legal representatives to the Insurer. The invoice refers to the professional costs of ‘DRS Application – Medical Dispute (Psychological)’.

18.   The Insurer declined to make payment of the invoice on 4 July 2019 on the basis that it had already made payment of another invoice in the amount of $1,796.26. This invoice related to the professional costs of the application for medical assessment relating to AGF’s physical injuries. The application which was lodged on the same day, 15 January 2019, as the application for medical assessment relating to AGF’s psychological injury, for which the dispute in relation to costs relates to.

19.   AGF’s 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.

20.   AGF’s legal representatives submit that they were required to submit two applications for internal review and medical assessment as it was not clear from the Insurer’s liability decision in relation to minor injury, whether it was the physical or psychological injury that had been determined to be a ‘minor injury’. AGF’s legal representatives also note that two medical assessments were required to be carried out.

21.   The Insurer submits that costs, further to the $1,796.26 already paid to AGF’s legal representatives, are not recoverable as only one set of professional legal costs are payable for the one minor injury decision.

22.   I agree with the submissions of the Insurer in this respect.

23.   Clause 2(1), Schedule 1 of the Regulations provides:

2 Medical disputes

(1)  The maximum costs for legal services provided to a claimant or an insurer in connection with a medical assessment under Division 7.5 of the Act, as allowed by the claims assessor or court, are 16 monetary units (to a maximum of 60 monetary units per claim).

24.   In this matter, it appears that AGF’s legal representatives have issued the two invoices referred to above relating to the dispute about minor injury, on the basis that AGF has both physical and psychological injuries. I note that AGF’s legal representatives lodged two applications for medical assessment, and two sets of submissions and acknowledge the submissions that it was not clear to them which injury had been determined to be a ‘minor injury’ based on the Insurer’s decision.

25.   However 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:

medical assessment means an assessment of a medical assessment matter under this Division

26.   Schedule 2, clause 2(e) of the Act declares a dispute about whether an injury is a ‘minor injury’ as a “medical assessment matter”.

27.   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’.

28.   Accordingly, given that the invoice with reference AGF SYO:1435-2 relates to the same ‘medical dispute’ about ‘minor injury’ of which the Insurer has already made payment of the maximum of 16 monetary units payable ($1,796.26), further costs are not recoverable by AGF in relation to that medical dispute.

29.   The Insurer confirmed with the DRS on 2 July 2019 that payment in the amount of $1,796.26 had been made to AGF’s legal representatives for an invoice also dated 22 April 2019 referring to the application for medical assessment of the physical injuries. In these circumstances, I am not able to permit any further costs as AGF has recovered the maximum costs for the medical dispute regarding minor injury.

30.   I find that AGF is not entitled to recover the legal costs claimed in the invoice ref: AGF SYO:1435-2, dated 22 April 2019, in the amount of $1,796.26 for professional costs of ‘DRS Application – Medical Dispute (Psychological)’.

Determination

31.   The Insurer’s reviewable decision of 4 July 2019 is affirmed.

Tajan Baba
Merit Reviewer and Claims Assessor
Dispute Resolution Service