|NSW DISPUTE RESOLUTION SERVICE (NSWDRS)|
|Jurisdiction||Miscellaneous Claims Assessment|
|Catchwords||Are injuries the result of a motor accident – wholly at fault – single vehicle accident – two accidents – pedestrian – pure mental harm – foreseeable risk – exceptional circumstances – legal costs|
Civil Liability Act 2002, section: 30, 31
AAI Ltd t/a GIO v Moon (2019/00332392)
AHK – Claimant
GIO General Ltd – 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
This determination relates to a Miscellaneous Claim, which is a reviewable decision under Schedule 2(3)(b) of the Motor Accident Injuries Act 2017, about whether, for the purposes of section 3.1 of the Act, the Claimant’s injuries have resulted from a motor accident in New South Wales.
1. In this matter there was originally a dispute between the Claimant and the Insurer pursuant to sections 3.11 and 3.28 of the Act, as to whether the Claimant was wholly at fault for causing the accident.
2. The Insurer’s original decision on liability dated 2 November 2018 stated: “Being a single vehicle accident, you would be deemed to be at fault in this motor vehicle accident”. The Claimant sought an internal review of that decision.
3. The Insurer’s internal review decision was issued on 8 November 2019. That confirmed the Insurer’s original decision but also alleged actual fault on the part of the Claimant in causing the accident.
4. That position was maintained by the Insurer until the lodgement of its Reply on 2 December 2019. For the first time, the Insurer alleged that there were two accidents involved, firstly the collision between the motor vehicle and the pedestrian and, secondly, when the Claimant carried the pedestrian to the side of the road.
5. The Insurer also submitted, again for the first time, that the Claimant would not be entitled to statutory benefits for the collision as the Claimant’s injuries amounted to pure mental harm and the Claimant did not witness the accident.
6. As to the second incident, the Insurer submitted that that did not amount to a motor accident within the meaning of the Act.
7. The Insurer further expanded its argument, by amended further submissions dated 10 December 2019. It submitted that the Claimant not only did not witness the pedestrian being injured nor put in peril and that the Claimant had not suffered a recognisable psychiatric illness, but further submitted that any physical injury the Claimant sustained in lifting and carrying the pedestrian was not a reasonably foreseeable risk. The Claimant has responded to each of these submissions
8. I thank both parties for forwarding submissions on an urgent basis since the first teleconference on 9 December 2019. This has enabled me to finalise my decision on an urgent basis also.
9. Since the Claimant’s initial submissions dated 18 November 2019, the Claimant has sought a determination that her legal costs be assessed above the amount provided for in the Motor Accident Injuries Regulation, 2017, on the basis of exceptional circumstances. The Insurer submits that the Claimant is only entitled to legal costs, and in the regulated amount, if exceptional circumstances exist and opposes any amount above that figure.
10. I held an initial teleconference with the parties on 9 December 2019 and then made directions for further submissions from each of the parties on an urgent basis. These were provided to me.
11. I held a second teleconference with the parties on 12 December 2019 and again made directions for further submissions from each of the parties, which I have received, again on an urgent basis.
12. I have considered the documents provided in the application and the reply and any further information provided by the parties.
13. I have considered in particular the submissions from both parties regarding the issues now in dispute, namely:
(b) is the Claimant entitled to recover legal costs from the Insurer in an amount in excess of that permitted by the Regulation?
14. In my view it is helpful to consider the circumstances of the accident firstly.
15. There can be no dispute as to the factual circumstances, as the Insurer has not provided me with any factual material, other than the Claimant’s own Application for Personal Injury Benefits.
16. In that Application the Claimant indicated that the accident occurred on 5 July 2018 at 3.45 pm on Luxford Road, Mt Druitt in New South Wales. I noted with the parties at the second teleconference that I had looked at the location of the accident on Google Maps and noted that Luxford Road is a major road with what seems to be two lanes in either direction. As the accident occurred near the Mt Druitt Public School, it was within one block of the Westfield Shopping Centre.
17. In her Application form, the Claimant described the accident as follows:
18. The Claimant in that same form went on to describe her injuries as follows:
19. The Police attended the scene and I have been provided with a copy of the Police report for the event. That report describes the accident as follows:
20. The Police noted the Claimant’s pre-accident speed of 45 kph. The report confirmed that Luxford Road is a main road and divided.
21. The Claimant also apparently described the accident to her general practitioner. Dr Salib recorded, in a visit on 6 July 2018, the day after the accident, the following history obtained from the Claimant:
when- 5/7/18 @ 3.45 pm
How- a child ran into rt side of her car while driving
while driving her car in lt lane out of 2 lanes just after finished 40 km/h school zone - heard a bang to rt side of her car
when looked in mirror there was a child (10 yo girl of islander origin) lying in the middle of road crying + her 2 sibling were next to her
she stopped car - rushed to child + lifted her to side of road
off duty firefighter was driving behind her - stopped to assist - called 000 for police + ambulance - both attended
the girl been hit was taken to hospital
the child’s mum came yelling
later she went home - 2 hr later tingling all over her body - hot + col sensation - nausea - shaking hands - lightheaded - chest tightness
LBP + R knee pain + neck shoulder pain
Nervous - hypervigilent driving - sleeplessness
o/e tearful no bruise rt knee or lower back
mild tenderness lower ant rt knee nad
imp - psychological trauma + soft tissue injury”
22. As I have noted, there can be no dispute regarding the circumstances of the accident. The Police report confirms the Claimant’s description of the accident in terms of the initial collision. The Claimant’s description of the accident in her Claim Form and to her GP are consistent.
23. The Insurer has not provided statements from any other witnesses to contradict the Claimant’s account of the accident, nor has it provided any statement from the pedestrian who was injured. There is no factual investigation report nor record of interview with the investigating Police Officer.
24. I accept therefore that the accident occurred as the Claimant has described.
For the purposes of section 3.1 of the Act, did the injuries to the Claimant result from a motor accident in this state?
25. As I have already noted, the Insurer for the first time raised this issue in its submissions dated 29 November 2019, attached to its Reply. The Insurer acknowledged this by stating therein, “The Insurer now raises the issue of whether the Claimant’s injuries has resulted from a motor accident pursuant to schedule 2, clause 3(b)”. Prior to this, as I have also already noted, it was the Insurer’s submissions that the Claimant was no longer entitled to statutory benefits because she was either at or deemed to be at fault for causing the accident. This was confirmed at the first teleconference by Ms Miles, solicitor for the Insurer, who advised that fault on the part of the Claimant was no longer in issue.
26. In the Insurer’s submissions there were two separate incidents. Firstly when the pedestrian ran into the side of the Claimant’s vehicle and secondly when the Claimant picked the pedestrian up from the roadway and carried her to the side of the road.
27. The Insurer accepts that the first incident falls within the definition of a motor accident but says that the Claimant, if she suffered mental harm from that incident, needs to satisfy the provisions of section 30 of the Civil Liability Act, 2002, as amended.
28. The Insurer put on further submissions dated 9 December 2019 in which it said that there was no evidence that the pedestrian had been injured. That submission was withdrawn when it was pointed out by the Claimant’s Senior Counsel, Mr Stone, that the Police Report had noted that the pedestrian had sustained a fractured fibula.
29. The Insurer then provided amended further submissions dated 10 December 2019 in which it acknowledged its error but maintained its submissions. It stated that the Claimant did not witness the pedestrian being injured at the scene of the motor vehicle accident, that is the first incident. It further submitted that the circumstances of the Claimant moving the pedestrian from the road did not fall within the aftermath of the accident, as considered in Wicks and Sheehan -v- State Rail Authority  HCA 22.
30. The Insurer further submitted that the Claimant has not established that the pedestrian was in peril within the meaning of section 30 of the Civil Liability Act, when on the roadway after the collision. It submitted that if there was some imminent danger to the Claimant and the pedestrian from other vehicles on the roadway, then it would be those vehicles that may be liable to pay statutory benefits to the Claimant.
31. The Insurer further submitted that as the Claimant’s physical injuries occurred in the removal of the child from the roadway, this was not a reasonably foreseeable risk and was the result of a separate incident not being a motor accident within the definition in the Act.
32. The Claimant has responded to these submissions from the Insurer, initially by supplementary submissions dated 4 December 2019. These submissions considered firstly the Insurer’s arguments pursuant to section 30 of the Civil Liability Act. The Claimant noted that the term “witnessed” is not defined in that Act. The Claimant submitted that the term “witnessed” did not have to be by sight alone but could be by hearing, smell or physical contact. Reference was made to provisions of section 62(2) of the Evidence Act which relevantly provides “A person has personal knowledge of the asserted fact if his or her knowledge of the fact was, or might reasonably be supposed to have been, based on something that the person saw, heard or otherwise perceived, other than a previous representation made by another person about the fact”.
33. The Claimant referred to the decision in Wicks and Sheehan, supra, which concerned rescuers attending at the Waterfall train derailment. That decision is well known and the High Court was there satisfied that the rescuers fell within the scope of section 30 of the Civil Liability Act.
34. The Claimant submitted that she was in effect a rescuer at the time of moving the injured child from the roadway.
35. As to the movement of the child from the roadway by the Claimant, the Claimant submitted that this fell within the definition of a motor accident within the Act by reason of a dangerous situation caused by the collision.
36. The Claimant submitted that both her physical and psychological injuries resulted from a motor accident. The Claimant referred to the decision of the High Court in Chapman -v- Hearse (1961) 106 CLR 112. The Claimant submitted that that decision is authority for the proposition that the circumstances of a motor vehicle accident extend beyond the impact to the clean-up that has to occur after the crash component. The Claimant submitted therefore that her injuries occurred as a result of being involved in a motor accident, in respect of both incidents.
37. As to the Insurer’s submission that the Claimant had not suffered a recognisable psychiatric illness, the Claimant referred to the notes of Dr Salib, to which I have already referred. It was noted, as is the case, that those records noted a diagnosis of post-traumatic stress disorder. The Insurer had made this submission under section 31 of the Civil Liability Act
38. For the reasons that follow, I determine that the Claimant’s injuries have resulted from a motor accident in this State.
39. The definition of “motor accident” is contained within section 1.4(1) of the Act. It reads:
(a) the driving of the vehicle, or
(b) a collision, or action taken to avoid a collision, with the vehicle, or
(c) the vehicle’s running out of control, or
(d) a dangerous situation caused by the driving of the vehicle, a collision or action taken to avoid a collision with the vehicle, or the vehicle’s running out of control.”
40. I accept the Claimant’s submission that the motor accident involved two incidents. The first being the collision between the Claimant’s motor vehicle and the child pedestrian. The second being when the Claimant lifted and carried the child from the roadway and out of danger. In my view these two incidents all form part of a motor accident.
41. The definition contains four separate circumstances during which the injury must occur. These are not, however, mutually exclusive. It is readily understandable that injury can occur by one or a combination of more than one of those circumstances.
42. I am further satisfied that the Claimant’s injuries were caused during a dangerous situation caused by a collision, within sub-section (d) of the definition. The child pedestrian, who was apparently aged about 10, was sitting on Luxford Road crying and told the Claimant she could not walk. That is not surprising given her fractured leg. I have already noted that Luxford Road is a main road, as described by the Police and is in near vicinity to a major shopping centre. The pedestrian being on the road and unable to walk was a dangerous situation and the Claimant in my view acted properly and reasonably in assisting her from the roadway. This was a continuation of the motor accident commencing with the collision.
43. However if I am wrong, then I am satisfied that that second incident, as relied upon by the Insurer, was a motor accident in itself being when the Claimant sustained injury during a dangerous situation caused by a collision. The Claimant can be in no worse position in that regard than a bystander who had come to the rescue of the pedestrian.
44. Accordingly, I am satisfied that both incidents, as identified by the Insurer, fall within the definition of motor accident within the Act. I think the matter can be left there, however I will deal with the questions raised under the Civil Liability Act.
45. In my view the provisions of section 30 of the Civil Liability Act either do not apply or are satisfied in the circumstances of this motor accident.
46. That section, which is well known and which I will not repeat here, restricts the recovery of damages for pure mental harm. I am satisfied that the Claimant has suffered more than pure mental harm, because of her physical injuries which have resulted from the one motor accident. In addition, there is no medical material to indicate that the Claimant’s psychiatric injury occurred solely as a result of the collision rather than as a result of the whole circumstances of the motor accident. The latter is more probable, as it was only after the collision that the Claimant became aware of the whole circumstances, including injury to the pedestrian.
47. Alternately I would accept the Claimant’s submission that the Claimant witnessed, in the sense of hearing, the pedestrian being injured and also saw the pedestrian in peril, as considered by the High Court in Wicks and Sheehan, supra. This was clearly foreseeable, in the aftermath of the accident. See Chapman -v- Hearse, supra.
48. There was clearly other traffic on the roadway as recorded in the notes of Dr Salib. The pedestrian had been put in peril by reason of the collision.
49. Accordingly, I am satisfied that for the purposes of section 3.1 of the Motor Accident Injuries Act, that the injuries to the Claimant have resulted from a motor accident in this State.
Is the Claimant entitled to recover legal costs from the insurer in an amount in excess of that permitted by the Regulation?
50. As I have noted, the Claimant in her initial submissions indicated that she would seek to recover legal costs under exceptional circumstances and in excess of the amount provided by the Regulation.
51. The Insurer submitted that I may assess costs in connection with this dispute but only if exceptional circumstances exist and then only in the amount provided by the Regulation. The Insurer submitted that I need pay particular regard to section 7.37(3)(b) of the Act.
52. The Claimant submitted that costs in excess of the regulated amount were provided for by section 8.10(4)(b) of the Act and that the circumstances of this matter are exceptional.
53. I considered the same submission from the Insurer in a miscellaneous claims dispute of Brown and GIO (No 10089606). Mr Stone of Counsel appeared in that matter for the Claimant and Ms Miles appeared for the Insurer. In that matter I did not accept the Insurer’s submission and set out my reasoning as follows:
“8.3 REGUATIONS FIXING MAXIMUM COSTS ETC RECOVERABLE BY AUSTRALIAN LEGAL PRACTITIONERS
(b) fixing maximum costs for matters that are not legal services but are related to proceedings in any motor accidents matter (for example, expenses for investigations, for witnesses or for medical reports),
(c) declaring that no costs are payable for any such legal services or other matters of a kind specified in the regulations.
(3) An Australian legal practitioner is not entitled to be paid or recover for a legal service or other matter an amount that exceeds any maximum costs fixed for the service or matter by the regulations under this section. An Australian legal practitioner is not entitled to be paid or recover any amount for a legal service or other matter of a particular kind if the regulations declare that no costs are payable for a service or other matter of that kind.
(4) An Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the regulations or the Dispute Resolution Service.
(5) This section does not entitle an Australian legal practitioner to recover costs for a legal service or matter that a court or costs assessor determines were unreasonably incurred.
(6) This section and any regulations under this section prevail to the extent of any inconsistency with the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014). An assessment under that legislation of any costs in respect of which provision is made by a regulation under this section is to be made so as to give effect to that regulation.
(7) The Minister is to consult the Councils of the Bar Association and the Law Society about any proposed regulation under this section. The validity of a regulation is not affected by a contravention of this subsection.”
50. As the Insurer has noted and pursuant to section 8.3(4), an Australian legal practitioner is not entitled to be paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits (whether the claimant or the insurer) in connection with the claim unless payment of those legal costs is permitted by the Regulations or the DRS.
51. Section 8.10 provides as follows:
(2) The regulations may make provision for or with respect to fixing the maximum costs and expenses recoverable by a claimant under this section (including any matters for which no costs and expenses are recoverable from the insurer).
(3) A claimant for statutory benefits is only entitled to recover form 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.
(5) An insurer is not entitled to recover from a claimant for statutory benefits any legal costs, or other costs and expenses, of the insurer in relation to the claim.”
Are legal costs only recoverable in exceptional circumstances?
52. Section 8.10(1) enables a claimant for statutory benefits to recover from the insurer, against whom the claim is made, the reasonable necessary legal costs and other costs and expenses, incurred by the claimant in connection with the claim.
53. Subsection (2) provides that the Regulations may make provision for and with respect to fixing the maximum costs and expenses recoverable by a claimant under this section. Such provisions are set out in Part 6 Division 2 of the Regulation. Section 22(1) provides that the costs set out in Schedule 1 are the maximum costs that may be recovered.
54. Schedule 1, Part 1, section 3(1) provides:
55. As the parties agree the figure of $1,600.00 has now increased to an amount of $1,633.00.
56. Had the legislature intended, as the Insurer submits, that legal costs for a claimant be restricted to the maximum costs set out in the Regulation, then section 8.10 need make no further provision. Subsection (1) provides an entitlement to recovery of reasonable and necessary legal costs and subsection (2) provides for a regulated maximum.
57. However section 8.10 continues. Section 8.10(3), as set out above, provides that a claimant is only entitled to recover from the insurer against whom the claim is made the reasonable and necessary legal costs incurred by the claimant if payment of those costs is permitted by the regulations or the DRS (my underlining).
58. Subsection (3) is clearly considering two separate circumstances. The first, as provided for in subsections (1) and (2) and the second for an entitlement if permitted by the DRS.
59. Subsection (4) provides the parameters by which the DRS can permit payment of legal costs, other than as provided by the Regulation. Relevantly, in this matter, that is if the DRS is satisfied that exceptional circumstances exist that permit payment of legal costs incurred by the Claimant.
60. This provision mirrors the provision in section 8.3(4) to allow an Australian legal practitioner to be paid or recover legal costs if permitted by the DRS.
61. Sections 8.10(3) and (4) have work to do. Similarly does section 8.3(4). The submission contended for by the Insurer, misunderstands the work those subsections are to do. That is, in my view, to permit payment of legal costs by the DRS, as an alternative to the payment of costs permitted by the Regulation, and, relevantly here, if exceptional circumstances exist that justify payment of legal costs incurred by the Claimant.
62. As I have indicated, section 8.10(3) provides for an entitlement to recover reasonable and necessary legal costs in two alternate scenarios. One is permitted by the Regulation and the other permitted by the DRS. Section 8.10(4) provides that the existence of exceptional circumstances is only a consideration if legal costs are to be permitted by the DRS.
63. Accordingly, I would not accept the Insurer’s interpretation that the legal costs permitted by the Regulation are only recoverable if exceptional circumstances exist.
Can legal costs be “incurred” beyond the regulated amount?
64. I would also not accept the Insurer’s submission that the Claimant cannot “incur” legal costs beyond the maximum sum set out in the Regulation, such that that amount may be permitted under section 8.10. I accept the Claimant’s submission to the contrary. Such is clear from the words of section 8.3(4). The disentitlement is to not be “paid or recover legal costs for any legal services provided to a party to a claim for statutory benefits”. It is not a disentitlement to legal costs being “incurred”.
65. I am satisfied, therefore, that section 8.10 of the Act entitles the Claimant to recover from the Insurer reasonable and necessary legal costs, if permitted by the DRS. The DRS can permit such payment but only if satisfied that exceptional circumstances exist that justify payment of legal costs incurred by the Claimant.
66. I am satisfied, as submitted by the Claimant, that the section evidences the intention of Parliament to allow for the payment of legal costs as permitted by the Regulation or as permitted by the DRS if there are exceptional circumstances. In other words, if the miscellaneous claims assessment matter is unusual or out of the ordinary, to adopt the language of the Court of Appeal in San -v- Rumble (No 2)  NSWCA 259.
67. As I have noted, the Claimant says there are exceptional circumstances in this matter and the Insurer concedes that that is the case.
Do I have the power to assess costs?
68. However the Insurer has submitted, as I have set out above, that the DRS can permit payment of legal costs but may not assess these. The Insurer submits that the provision of section 8.10 only empowers the DRS to permit payment of legal costs, but not to assess costs. It refers to the provisions of section 7.37 of the Act which provides as follows:
(1) In making an assessment and specifying damages in respect of a claim, a claims assessor may include in the assessment an assessment of the claimant’s costs (including costs for legal services and fees for medico-legal services) in the matter.
(2) An assessment of those costs may also be made (whether or not an assessment has been made under subsection (1)) if a court does not determine a matter after the issue of a certificate as to an assessment but remits the matter for further assessment under this Division.
(3) In making an assessment under this section, a claims assessor:
69. The Insurer notes the specific power provided to a claims assessor to make an assessment of the Claimant’s costs, when making an assessment of damages. That interpretation wrongly assumes that a claims assessor may only make an assessment of the claimant’s costs when specifying damages. In my view it is wrong for two reasons.
70. Firstly section 7.37(1) provides for two scenarios where a claims assessor may include in an assessment an assessment of the claimant’s costs. This is “in making an assessment in respect of a claim” and “in specifying damages in respect of a claim”. It follows that in making an assessment in respect of a claim a claims assessor may include in the assessment an assessment of the claimant’s costs.
71. This is clear from the provisions of section 7.36(1) which provides:
(b) the amount of damages for that liability (being the amount of damages that a court would be likely to award).
72. The section clearly provides for separate assessments of liability and damages.
73. Secondly, Subdivision (3) of Division 7.6 refers to miscellaneous claims assessments and includes section 7.42. That section provides as follows:
(1) A dispute may be referred at any time to the Dispute Resolution Service by any party to the dispute for assessment under this Division.
(2) Subdivision 2 applies to the assessment of a dispute in the same way as it applies to the assessment of a claim for damages, subject to subsection (3) and such other modifications as may be prescribed by the regulations.
(3) An assessment of a dispute about a miscellaneous claims assessment matter relating to a claim for statutory benefits is binding on the parties to the dispute.”
74. It is clear that by virtue of section 7.42(2), the provisions of Subdivision 2, including section 7.37, apply, mutatis mutandis, to the assessment of a dispute in a miscellaneous claims assessment. The limitations in that subsection are not relevant for present purposes. The dispute here was as to liability.
75. Therefore, in a miscellaneous claims assessment, a claims assessor may include in the assessment an assessment of the claimant’s costs in the matter.
76. Accordingly, if a claimant is permitted under section 8.10(4) to the payment of legal costs because exceptional circumstances exist, then a claims assessor may include an assessment of those costs.
77. Section 8.6(1), as referred to by the Insurer, provides for a court to make a costs order consistent with the provisions of the Act, in an exceptional case and for the avoidance of substantial injustice.
78. The Insurer submits that as section 8.10 does not contain such an express power, then it was clearly the intention of Parliament not to permit costs beyond the regulated amount for a miscellaneous claims assessment dispute.
79. Clearly section 8.6 relates to a consideration of costs when a matter is in court. However a claims assessor may make an assessment of the claimant’s costs, pursuant to sections 7.37 and 7.42 and permit payment pursuant to section 8.10. Such is the legislative framework for costs in a miscellaneous claims assessment dispute in relation to a statutory benefits matter.
Is my interpretation contrary to the objects of the Act?
80. The Insurer refers to the Explanatory Note to the Motor Accidents Injuries Bill 2017, and in particular to the following feature of the new motor injuries compensation scheme, namely:
81. The Insurer says that that when read together with the Second Reading Speech relating to the fixing of maximum legal costs and the objects of the Act, this provides a clear intention that only regulated costs may be recovered in a statutory benefits miscellaneous claims assessment dispute.
82. I have already noted the Claimant’s submissions in this regard, that disputes be resolved justly.
83. The Explanatory Note to the Bill, as referred to by the Insurer, mirrors the provision in section 8.10. It clearly sets out that legal costs will be recoverable if permitted by the Regulation or the DRS. That note is not contrary to the interpretation of section 8.10, that I have set out above.
84. In my view this interpretation also, as submitted by the Claimant, meets the objects of the Act as set out in section 1.3(g) “to encourage the early resolution of motor accident claims and the quick, cost effective and just resolution of disputes”. In exceptional circumstances, it would not be cost effective for a claimant to be limited to the maximum regulated costs. This may not see the legal work properly completed. It would also not provide a just resolution of disputes.
85. The Insurer refers to the Second Reading Speech to the Bill. The Second Reading Speech by Minister Dominello on 9 March 2017 refers to the reduction in legal costs and, as quoted by the Insurer, the Minister says “it allows for both the fixing of maximum legal costs by reference to the amount recovered by the claimant and a fee for service model”.
86. That clearly refers to the regulated fee and the speech makes no reference to the allowance of costs in exceptional circumstances, whether by a claims assessor or a court. The Minister did however say, when referring, inter alia, to claims assessors, that the Bill establishes “an independent dispute resolution service for disputes to be resolved independently, flexibly, fairly, cost effectively and quickly”. I have endeavoured to meet that expectation in this decision. It is far more cost effective that I assess costs, rather than the parties having to proceed to a separate costs assessment. That would also not resolve the dispute quickly.
87. I note that the State Insurance Regulatory Authority has published a paper entitled “Legal costs in claims for CTP statutory benefits”. This paper is for the benefit of legal advisors and says at page 2, referring to section 8.10:
The Dispute Resolution Service may permit the payment of costs in special circumstances including where the Claimant is under a legal disability, an infant, or in exceptional circumstances that justify payment of legal costs incurred by the claimant.”
88. In my view, my interpretation of section 8.10 reflects that statement by the regulator.
89. I am satisfied that the provisions of section 8.10 allow the DRS to permit payment of legal costs incurred by a claimant if exceptional circumstances exist, and above the amount set out in the Regulation.
90. I am also satisfied that as a claims assessor I have the power to include in this assessment, an assessment of the Claimant’s costs pursuant to sections 7.37 and 7.42 of the Act.
91. I am further satisfied that legal costs have been incurred but may only be paid or recovered if permitted by the DRS.
92. I am satisfied that these findings conform to the objects of the Act and as explained in the Explanatory Note to the Bill and in the Second Reading Speech in Parliament.”
54. The Insurer has not persuaded me that that reasoning is incorrect. It has only referred specifically, as I have noted, to the provisions of section 7.37(3)(b), supra. Section 8.10 is contained within Part 8, as referred to in that section. The requirement therefore in that sub-section is that I give effect to the requirement of the regulations under Part 8, to the extent that the Regulation is applicable. The provisions of section 8.10(3) and (4) clearly permit costs to be awarded by the Dispute Resolution Service if exceptional circumstances exist. If so, that then removes the matter from the maximum fees and costs as provided by the Regulation, as I have set out above.
55. In the matter of Brown the Insurer conceded there were exceptional circumstances. It has not done so here. The Claimant submits that there are clearly exceptional circumstances because the Insurer has altered its liability decision on a number of occasions, to deny the Claimant an entitlement to ongoing statutory benefits. I have noted these already. The Insurer itself has acknowledged as much.
56. This has required the Claimant’s legal advisors to consider each argument from the Insurer and to provide written submissions in relation thereto. On my calculation the Claimant has been required to provide four sets of written submissions comprising some 22 pages. These have been necessary because of changes in the Insurer’s own submissions. There have, in addition, been two teleconferences that the Claimant’s legal advisors have taken part in following each of which the Insurer has sought the opportunity to make further submissions. That has then required the Claimant to do likewise.
57. I am satisfied that exceptional circumstances exist in this matter to justify payment of legal costs incurred by the Claimant.
58. I referred in Brown to the decision of the Court of Appeal in San -v- Rumble, supra. In that matter the Court was considering the provisions of section 153(1) of the Motor Accidents Compensation Act 1999 which provides “Any order of a court as to costs is to be made consistently with the relevant provisions of or made under this Act. However, the court may make an order that departs from those provisions in an exceptional case and for the avoidance of substantial injustice”.
59. At paragraph 67 thereof, Campbell, JA, who delivered the leading judgment, said: “A litigant who seeks to have a court displace, under section 153(1), the costs regime that section 151 creates bears the onus of proving facts and presenting argument that persuades the court that it is appropriate to make such an order. In deciding whether it is an “exceptional case”, within the meaning of section 153(1), the court needs to find that the circumstances of the instant case are unusual or out of the ordinary, whether that unusualness or being out of the ordinary arises from qualitative or quantitative factors. But, to adopt Kelly, the case need not be one that is unique, unprecedented, or very rare. ….. it will be necessary to approach each application by careful consideration of the facts of the individual case”.
60. There is no doubting that this claim has been unusual in that the Insurer has repeatedly altered the legal basis on which it has sought to cease the Claimant’s statutory benefits. This has required the Claimant to engage Counsel familiar with the Act and Regulation and prior determinations of the Dispute Resolution Service. It would have been different if the Insurer had always maintained the same legal and/or factual arguments.
61. The Insurer does not dispute that I may assess the Claimant’s costs but does dispute the amount sought.
62. The Claimant’s solicitors submitted an itemisation of their costs in an amount of $8,967.42 and a memorandum of fees of Mr Stone of Senior Counsel totalling $5,390.00, both inclusive of GST. The Insurer presumes that such costs have been incurred pursuant to a Costs Agreement between the Claimant and her legal advisors. It says that this may be in contravention of section 8.3(3) of the Act and that the Claimant would be liable for payment of costs in excess of any amount payable by the Insurer under the Act. It says that there is no contractual liability nor statutory power for those retained on behalf of the Claimant to be paid directly by the Insurer.
63. The Claimant says that the Insurer’s submissions misunderstand the cost provisions of the Act and Regulation. The Insurer submits that the Claimant can have no costs liability above the costs recovered.
64. I accept the Claimant’s submission that the Insurer has misunderstood the costs provisions applying to claims for statutory benefits. Section 8.3(4) of the Act provides:
65. Accordingly, questions of a costs agreement are irrelevant and the Insurer has unnecessarily caused the Claimant to make further submissions in this regard.
66. In addition, there is clearly a statutory provision for payment of legal costs by the Insurer. See section 8.10(3) and (4). It is entirely incorrect for the Insurer to note that the Claimant is liable for the legal costs of this dispute. The legal costs are as permitted by the Regulation or by the Dispute Resolution Service and are payable by the Insurer.
67. Turning then to the amount of the legal costs and expenses claimed, the Insurer submits that it was unnecessary for the Claimant to have both an experienced solicitor and also Counsel and that one only would have been sufficient. It disputes the hourly rates charged for the Senior Legal Assistant or Law Clerk. It says that to allow the amount claimed would be contrary to the object of the Act to keep premiums affordable.
68. The Claimant says that there has been no duplication between the work carried out by her solicitor and Counsel as detailed in their respective invoices. She says that her solicitor has handled communications and contact with her and Counsel has drafted the submissions and taken part in the teleconferences. She says further that the work performed by administrative staff has been at a lesser rate and therefore has reduced the costs that would otherwise have been incurred.
69. She says that any comparison to costs allowed for a special assessment under the Motor Accident Compensation Act are irrelevant. The Insurer had submitted the comparison should be made to the maximum allowed under the Motor Accident Compensation Regulation. I accept the Claimant’s submission that that is irrelevant noting that under that Act, solicitor/client fees are recoverable. In addition, as submitted by the Claimant, such applications under that Act are not considering a possible lifetime entitlement for treatment expenses.
70. As to the Insurer’s submission as to keeping premiums affordable, the Claimant submits that the primary object of the Act is to provide compensation to the injured. She submits that the Insurer has tried to avoid this by several unsuccessful arguments to deny payment of statutory benefits. She says she has incurred costs solely as a result of the Insurer’s actions.
71. The Act clearly provides for a scheme for compensation for those injured in motor accidents. Section 1.3(2)(b) provides that an object of the Act is “to provide early and ongoing financial support for persons injured in motor accidents”.
72. The underlining is by me and it is clear that the Insurer’s actions to date in connection with this matter, since its decision to deny continuing benefits on 2 November 2018, have meant that the Claimant has not been provided with ongoing financial support. That is significantly now over a year ago. The Insurer’s arguments to disentitle the Claimant have either been withdrawn by the Insurer or have now been found to be incorrect.
73. I accept by considering the respective accounts from the Claimant’s solicitor and Counsel that the work has been of a different nature and it has been incurred as a result of the Insurer’s decision to refuse continuing benefits, in circumstances where it should not have done so. The Claimant refers in this regard to the Insurer’s duty to act with good faith pursuant to section 6.3 of the Act and to resolve claims justly and expeditiously pursuant to section 6.4 of the Act.
74. Clearly the several arguments raised by the Insurer in the course of this dispute have necessitated the Claimant having legal representation, in my view. This is certainly not a straightforward dispute on a factual basis that the Claimant could have dealt with herself.
75. In my view, having found exceptional circumstances, it is appropriate to make a determination as to the Claimant’s costs, payable by the Insurer. Since forwarding the accounts the Claimant accepts that there is an error in her solicitor’s account of $132.00 inclusive of GST relating to QBE Insurance. Those amounts would need to be removed. The Claimant however also claims an additional amount of $660.00 for Counsel’s preparation of final submissions, to which I have already referred. That amount is claimed in addition.
76. On my calculations this would reduce the Claimant’s solicitor’s account to $8,835.42 inclusive of GST and increase Counsel’s fees to $6,050.00 inclusive of GST. However the Claimant’s solicitors’ account includes work undertaken in respect of the internal review, which are not recoverable, pursuant to section 23 of the Regulation. On my calculations the amount should therefore be further reduced to a total of $3,221.79, inclusive of GST, for work carried out from 19 November 2019.
77. All of that work has been directly undertaken by the Claimant’s legal representatives in respect of this dispute and in my view have been reasonably incurred. I accept in this regard that some of the work has been carried out at a lesser rate by lesser qualified persons and that has been appropriate.
78. Accordingly, I assess the Claimant’s costs in the sum of $9,271.79 inclusive of GST.
79. Finally, the Insurer sought that I defer assessing the costs in this matter until the decision of the Supreme Court of New South Wales in AAI Ltd t/as GIO -v- Moon (2019/00332392).
80. In that matter the Insurer has sought a judicial review as to the question of whether the Dispute Resolution Service can permit the recovery of legal costs incurred by a Claimant exceeding the amount fixed under the Regulation. I am told the matter is listed for hearing on 17 April 2020.
81. The Claimant opposes such a deferral. The Claimant notes that this issue has now been determined on three prior occasions by the Dispute Resolution Service and contrary to the argument raised by the Insurer. The Claimant submits it would be unfair to the Claimant to place the assessment on hold pending that decision which may be up to six months, giving time for judgment. It is submitted that the Claimant’s legal advisors have carried out the work and should be entitled to payment at the completion of this matter. The Claimant submits that it would be unfair for those representing the Insurer to be paid for the work that has been carried out by it whilst those acting for the Claimant be asked to wait for any payment.
82. In my view, there is force in the Claimant’s submissions. The work by the Claimant’s representatives has been necessitated by the Insurer’s changing decisions. In my view, this matter should be finally determined, including the payment of the Claimant’s legal costs, now, particularly having regard to the time since when the Claimant’s benefits were ceased and legal work has been undertaken.
My determination of the Miscellaneous Claim is as follows:
83. For the purposes of section 3.1 the injury to the Claimant has resulted from a motor accident in this State
84. Legal Costs: The amount of the Claimant’s costs assessed in accordance with the Motor Accident Injuries Regulation 2017 is $9,271.79 inclusive of GST.
DRS Claims Assessor
Dispute Resolution Service