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AHX v Allianz Australia Insurance Limited [2019] NSWDRS MR 211

NSW DISPUTE RESOLUTION SERVICE (NSWDRS)
Jurisdiction Merit Review
CatchwordsLegal costs – medical assessment – minor injury – internal review – physical medical dispute – psychological medical dispute – exceptional circumstances
Legislation cited Motor Accident Injuries Act 2017 (NSW) ss 1.3, 7.13(4), 7.17, 7.20, 8.10, Schedule 2 Clause 1 (aa), Schedule 2 clause 2(e)
Motor Accident Injuries Regulation 2017 Schedule 1 clause 2(1)
Motor Accident Guidelines 7.276
Cases cited

N/A

Text cited N/A
Parties AHX – 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 the certificate

ClaimantAHX
Insurer Allianz Australia Insruance Limited
ApplicantAHX
Date of Accident28 September 2018
DRS Reference10113639
Decision MakerEmma Toohey
Date of Certificate7 November 2019

Issued in accordance with section 7.13(4) of the Motor Accident Injuries 2017
Schedule 2, Schedule 1(aa) of the Motor Accident Injuries Act 2017

  1. The Insurer’s reviewable decision dated 10 July 2019 is set aside and the following decision is made in substitution.
  2. The Insurer is to pay legal costs in the amount of $1,796.30 to AHX in respect of the application for medical assessment dated 18 January 2019.
  3. This decision takes effect on 7 November 2019.
  4. The reasons for this decision are attached to this certificate.

Emma Toohey
Merit Reviewer and Claims Assessor
Dispute Resolution Service

Reasons for Decision

Issued in accordance with section 7.13(4) of the Motor Accident Injuries Act 2017

Background

1.   AHX was injured in a motor vehicle accident on 28 September 2019. Allianz Australia Insurance Limited accepted AHX’s claim under the Motor Accidents Injuries Act 2017 (the Act).

2.   On 18 January 2019, the Insurer advised AHX that his physical injury fell within the definition of minor injury.

3.   On 14 March 2019, AHX lodged an internal review of the Insurer’s decision regarding the minor injury decision.

4.   On 2 April 2019, the Insurer’s internal review decision was issued, maintaining the decision that his physical injury was a minor injury.

5.   On 24 April 2019, AHX lodged two applications to DRS, one for the minor injury (physical) dispute and a second for the minor injury (psychological) dispute.

6.   On 13 June 2019, the Insurer advised AHX that the liability decision had been amended and they now accepted that he had a non-minor injury (physical).

7.   On 10 July 2019, the Insurer notified AHX that it would pay legal costs in the amount of 8 monetary units regarding the minor injury dispute.

8.   On 25 July 2019, the two minor injury dispute applications to DRS were withdrawn.

9.   On 17 June 2019, AHX’s legal representative issued the Insurer with two invoices for legal costs. The first related to the physical medical dispute ($1,796.30, inclusive of GST) and the second related to the psychological medical dispute ($1,796.30, inclusive of GST).

Documents considered

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

Legislation

11.   In conducting my review, I have considered the:

  • Motor Accident Injuries Act 2017 (NSW) (the Act)
  • Motor Accident Injuries Amendment Regulation 2017 (NSW) (the Regulation)
  • Motor Accident Guidelines 2017 (as amended on 15 January 2019) (the Guidelines)

SUBMISSIONS

12..  AHX’s legal representative makes the following submissions on his behalf:

(a)   On 18 January 2019, the Insurer advised AHX that his injuries fell within the definition of a minor injury, without consulting independent medical advice.

(b)   The Insurer had considered both physical and psychological factors in making their determination that the injury was minor, therefore AHX had to satisfy the criteria for minor injury, both physically and psychologically, to be determined as a minor injury.

(c)   Two internal review decisions were lodged on 13 March 2019, one for the physical injury and one for the psychological injury.

(d)   It is medically fair and just if the internal reviews are conducted separately as they involve two sets of vastly different injuries.

(e)   The Insurer acknowledged receipt of the application for internal review on 14 March 2019 and it made no objections against the applications being submitted separately.

(f)   On 2 April 2019, the Insurer maintained their determination that AHX’s physical and psychological injuries were minor. Both injuries were reviewed and considered separately.

(g)   On 24 April 2019, two separate minor injury dispute applications were lodged at the DRS, one for the physical injury and one for the psychological injury.

(h)   On 13 June 2019, the Insurer informed AHX that they now accepted that his physical injury was non-minor. However, they did not accept that the psychological injury was non-minor and this dispute therefore remained.

(i)   On 25 July 2019, after discussion with the DRS both applications to the DRS were withdrawn to save time and cost.

(j)   The Insurer’s letter dated 10 July 2019 regarding payment of legal costs, is mistaken.

(k)   AHX has jurisdiction to continue the dispute regarding the psychological injury.

(l)   AHX disputes the Insurer’s assertion that there is one minor injury matter on foot instead arguing that there are two and therefore two sets of costs apply.

(m)   The DRS should exercise its discretion under cl 7.276 of the Guidelines and s 1.3 of the Act to promote the Objects of the Act by accepting AHX’s request for payment of both invoices.

13.  The Insurer makes the following submissions:

(a)   Schedule 1, cl 2(1) of the Regulation limits the maximum costs payable to a legal practitioner for legal services provided in connection with a medical assessment matter to 16 monetary units.

(b)   Section 7.17 of the Act defines a medical assessment to be a medical assessment matter which in this case was whether the injury caused by the motor accident was a minor injury.

(c)   It is irrelevant that AHX lodged separate applications for the physical and psychological injury as the medical assessment matter as a whole relates to whether AHX has a minor or non-minor injury.

(d)   There are no exceptional circumstances in this matter.

(e)   The Insurer’s legal representatives are not entitled to more than the 8 monetary units already paid, for costs in relation to this dispute.

(f)   Section 8.10 of the Act limits the entitlement to legal costs to an amount that is reasonable and necessary. In this case the matter resolved prior to a medical assessment occurring. AHX’s legal representative did not engage with the legislation in providing submissions and their involvement only extended to filling in forms therefore 8 monetary units is reasonable and necessary.

Reasons

14.   The issue in dispute is AHX’s further entitlement to legal costs relating to the application for medical assessment of the minor injury dispute. The parties acknowledge that payment of 8 monetary units has been made.

15.   Section 8.3 of the Act provides for the maximum costs recoverable by an Australian legal practitioners. Section 8.10(1) of the Act provides that a claimant for statutory benefits is (subject to this section) entitled to recover from the Insurer reasonable and necessary costs in connection with the claim. This is qualified by subsections (2), (3) and (4) which provide that the recovery of costs is allowed if payment is permitted by the Regulations or DRS.

16.   The Insurer indicates that it has made payment of 8 monetary for legal costs in relation to the medical assessment matter which relates to both the physical and psychological dispute.

17.   AHX’s legal representatives have issued two invoices for legal costs, one relating to the minor (physical) injury dispute and the second relating to a minor (psychological) injury dispute. It is also submitted that because two separate applications were lodged at the DRS, regarding the two injury disputes, payment of two sets of costs should be allowed.

18.   Regardless of whether two separate applications are lodged, s 7.20 of the Act provides that a medical dispute can be referred to the DRS for a medical assessment. A definition of medical assessment is found in s 7.17 of the Act which provides that a:

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

19.   Schedule 2, cl 2(e) of the Act provides that a dispute about whether an injury is a minor injury is a medical assessment matter.

20.   Schedule 1, Part 1, cl 2 of the Regulations relates to costs in connection with a medical assessment matter which is defined to be an assessment of a medical assessment matter. The maximum 16 monetary units therefore does not relate to injuries or types of injuries, which appear to be the basis of the two separate invoices issued by the AHX’s legal representative, rather, the medical dispute regarding minor injury which has been referred to the DRS for a medical assessment.

21.   I am satisfied that one medical dispute regarding a minor injury has been referred to the DRS and AHX is therefore entitled to a maximum of 16 monetary units for legal costs incurred in connection with the medical assessment matter.

22.   The Insurer indicates that to date they have paid 8 monetary units and that it is their assessment that this is a reasonable and necessary amount taking into consideration the amount of work AHX’s legal representative appears to have put into the application to the DRS.

23.   AHX was entitled to lodge a review at the DRS for review of the Insurer’s decision regarding the minor injury dispute. Prior to a review being conducted at the DRS, the Insurer made a new decision, that AHX’s injury was non-minor. The application for review of the medical assessment matter was then withdrawn by AHX. On this basis I am satisfied that AH Xis entitled to payment of legal costs in the amount of $1,796.30.

Determination

24.   The Insurer’s reviewable decision dated 10 July 2019 is set aside and the following decision is made in substitution:

The Insurer is to pay legal costs in the amount of $1,796.30 to AHX in respect of the application for medical assessment dated 18 January 2019.

Emma Toohey
Merit Reviewer and Claims Assessor
Dispute Resolution Service