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Motor accidents bulletin - March 2016

Memo from the Executive Director

Welcome to the March edition of the Motor Accidents Bulletin.

It is shaping up as a busy period for the State Insurance Regulatory Authority (SIRA). As you will read in this edition, the Government has launched a major review of the NSW Motor Accidents CTP scheme, a review of the scheme for point-to-point vehicles, released an independent review of insurer profit in the scheme, and established a taskforce and hotline to combat CTP insurance fraud.

SIRA is taking the lead in enabling these initiatives, including managing the stakeholder consultation and social market research components of the review process, and working to promote the hotline and other strategies to combat fraud.

While the aim of the review is to ensure an improved scheme for road users and injured people in NSW, in the interim it is business as usual for SIRA. The existing scheme may not be perfect, but we are committed to ensuring it operates as efficiently and effectively as possible.

We will continue to assist claimants with advice, expedite the assessment of disputes and the handling of complaints, oversee insurer licensing, regulate CTP Green Slip prices, and provide injury prevention and recovery advice.

Andrew Nicholls
Executive Director
Motor Accidents Insurance Regulation
State Insurance Regulatory Authority

News from Motor Accidents Insurance Regulation

Review of the NSW Motor Accidents CTP scheme

On 11 March 2016, the Minister for Innovation and Better Regulation, the Hon Victor Dominello MP, announced a major review of the NSW Motor Accidents Compulsory Third Party (CTP) scheme and the release of an options paper, On the road to a better CTP scheme – options for reforming Green Slip insurance in NSW.

The current scheme has been in place for more than 15 years and is increasingly under pressure, with Green Slip premiums some of the most expensive in Australia and often extensive delays in the time taken to resolve claims and for injured people to receive benefits. Recent years have also seen significant incidence of CTP insurance fraud and exaggeration.

The review has four key objectives:

  • increase the proportion of benefits provided to the most seriously injured road users
  • reduce the time it takes to resolve a claim
  • reduce opportunities for claims fraud and exaggeration
  • reduce the cost of CTP Green Slip premiums.

Public consultation closes on 22 April 2016, following which the Government will report back to the community with preferred reform options in the second half of 2016.

To view the options paper and make a submission, visit the SIRA website.

Insurer profit in the NSW Motor Accidents CTP scheme

The NSW Government has released an independent review of insurer profit and market competition in the CTP scheme. This follows from the recommendations of the Legislative Council Standing Committee on Law and Justice and its twelfth review of the exercise of the functions of the (former) Motor Accidents Authority.

The independent review makes 21 recommendations regarding premium prices, risk rating, the level of competition within the existing scheme and barriers to entry.

The recommendations will be incorporated into the Government’s review of the CTP scheme to help strengthen the regulatory framework, improve transparency and market competition. The review of insurer profit can be found on the SIRA website.

Review of CTP insurance for point-to-point transport vehicles

The NSW Government has announced a review of CTP insurance for point-to-point transport vehicles. These vehicles include taxis, hire cars and ride-share services, such as UberX, GoCar and Lyft. The review will look to ensuring that the scheme’s framework supports ride share services on a level playing field alongside traditional forms of point-to-point transport.

The NSW Government has released a discussion paper to facilitate public consultation, which focuses on six key options. The paper is available on the SIRA website.

Public consultation on the discussion paper closes on 8 April 2016. The Government plans to announce its response in the second half of 2016.

Taskforce to combat CTP insurance fraud

On 2 March 2016, the Hon. Victor Dominello MP announced the establishment of a multi-agency taskforce to combat CTP insurance fraud, as well as a CTP fraud hotline.

Both are a response to the Government’s concern at the high incidence of fraudulent claims which cost NSW motorists up to $400 million extra each year in CTP premiums.

The inaugural meeting of the taskforce was held on 18 March with representatives from insurers, the Insurance Council of Australia, Australian Lawyers Alliance, Law Society of NSW, NSW Bar Association, Health Care Complaints Commission, Australian Medication Association, SIRA, Office of the Legal Services Commissioner, Fair Trading, NSW Police, and Data Analytics Centre.

The taskforce identified actions in four key priority areas:

  1. building and linking enhanced data mining and analytics, and seeking opportunities to share information and insights
  2. finding opportunities to promote community education and communications campaigns to complement the CTP fraud hotline
  3. strengthening regulatory enforcement and investigation powers and coordinating regulatory efforts and resources
  4. considering regulatory and legislative amendments.

SIRA’s existing scheme integrity program will supplement the work of the taskforce. The program includes:

  • analysis of industry-wide claims data
  • reporting trends and suspicious issues to the CTP Green Slip insurers
  • encouraging insurers to adopt best practice fraud identification and prevention strategies
  • monitoring and collating the results of insurer initiatives
  • working with multiple agencies to facilitate the investigation of suspicious activities
  • exploring overseas experiences related to personal injury fraud.

The hotline is available on 1800 600 444, by emailing report.fraud@ifbaintelligence.com, or by lodging an online form at www.ifbaintelligence.com/report

More information about the taskforce and hotline is available on our website.

News from Injury Strategy

Publication of Guidance Notes

Guidance Notes have been developed by a panel of expert MAS assessors in response to concerns that the existing Guidelines were ambiguous or did not fully explain the applicable methodology. There are 21 Guidance Notes available on our website.

The following Guidance Note was removed for use by Medical Assessors from January 2016:
Guidance Note 9 - Assessment of resection arthroplasty

For further details visit Permanent Impairment.

WPI Email Enquiry Service

The WPI email enquiry service:

  • helps you understand the methodology of WPI assessment and
  • helps you interpret the guidelines that apply to WPI assessment:
    • AMA 4 Guides to the Evaluation of Permanent Impairment (4th Edition) and
    • MAA Permanent Impairment Guidelines, 1 October 2007.

Should you wish to make an enquiry, email WPI Enquiry.

Case studies are also available on the SIRA website under Permanent Impairment Case Studies. They demonstrate how SIRA’s Permanent Impairment Guidelines and the AMA’s Guide to the Evaluation of Permanent Impairment (4th Edition) are applied to determine the degree of permanent impairment of injuries sustained in a motor accident.

For further details visit How is Permanent Impairment assessed.

Assessment to Odontoid fractures

Assessor Michael Fearnside recently presented a discussion paper titled, ‘Trauma to the upper cervical vertebra’, which included a review of the approaches to the assessment of permanent impairment of upper cervical vertebra injuries. As a result of recent WPI enquiries on how to assess odontoid fractures, this paper has formed the basis for the following article written by Michael Fearnside and Josephine Redmond, Medical Review Officer, Assessment Services Division, SIRA, to assist stakeholders in understanding the approach to permanent impairment assessment of odontoid fractures:

The first two vertebra of the cervical spine have different anatomy to the rest of the cervical spine. The second vertebra, C2, has a large body with an upwardly projecting bone called the odontoid process.

Although relatively rare, trauma to C1 and/or C2 is generally a major injury, often associated with ligamentous injury. Treatment is either by surgery or prolonged immobilisation in a specialised cast or collar.

Occasionally the WPI enquiry line receives questions about how to assess an injury to the odontoid process. Fractures to the odontoid process either involve the tip (Type I) or the base (Type II) of the odontoid. A Type III fracture runs obliquely through the body of C2 and involves the base of the odontoid. Compression fractures of the body of C2 are only very rarely seen. Pedicle fractures of C2 are generally bilateral and unstable (Hangman’s fracture) and would usually but not invariably be treated surgically.

Assessment of fractures of the odontoid process is not specifically addressed in the AMA 4 Guides or the MAA PI Guidelines.

The AMA 4 Guides provide that DRE Cervicothoracic II is applicable when there is a posterior element fracture without displacement and healing has occurred without loss of structural integrity or radiculopathy. The AMA 4 Guides also state that a person with spinous or transverse process fracture should be placed in this category because the fracture does not disrupt the spinal canal. (p.104)

DRE Cervicothoracic III is applicable when there is a posterior element fracture excluding a transverse or spinous process fracture; a mild displacement disrupts the spinal canal, but the fracture is healed without loss of structural integrity. Radiculopathy may or may not be present. (p. 104) (See Medical Assessor Guidance Note 18: Assessment of radiculopathy following trauma to upper cervical vertebrae)

The medical assessor would view the relevant imaging studies, surgical notes and other relevant medical documents at the time of assessment. The medical assessor would determine from the clinical examination and findings if other impairment factors need to be considered, such as radiculopathy (See Guidance Note 18: Assessment of radiculopathy following trauma to upper cervical vertebrae).

From the imaging and other evidence, the medical assessor will determine if the odontoid fracture has healed with or without displacement. If ‘a mild displacement’ disrupts the spinal canal, but the fracture is healed without loss of structural integrity DRE III is applicable. However, if the fracture has healed without displacement and providing there is no radiculopathy, DRE II is applicable.

When assessing a Type III fracture (base of the odontoid and body of C2) the Assessor will also consider whether there has been associated ligamentous injury. If unstable, the injured person may have had a spinal fusion which would be assessed at DRE IV. If unstable but no surgery has been required, the Assessor may consider whether presence of any ligamentous instability warrants a DRE III rating. If so, the Assessor should provide clear reasons for choosing a higher rating.

News from Dispute Services

Court Cases/Decisions of Interest

Citation: Mackenzie v Allianz Australia Insurance Ltd (No. 2) [2015] NSWSC 1320

  • Hearing date:9 September 2015
  • Decision date:11 September 2015
  • Court: Supreme Court of NSW
  • Before: Hoeban CJ; Adamson J

Decision:

  1. Summons dismissed.
  2. Unless an application for a different order is made to my Associate in writing within seven (7) days, order the plaintiff to pay the defendants' costs.

Citation: Allianz Australia Insurance Ltd v Rutland [2015] NSWCA 328

  • Hearing date: 10 June 2015
  • Decision date: 20 October 2015
  • Court: Court of Appeal, Supreme Court of NSW
  • Before: McColl and Meagher JJA and Macfarlan JA

Decision:

  1. First respondent’s notice of motion filed 22 April 2015 dismissed.
  2. Appeal dismissed with costs.

Citation: Clinton McGiffen v AAI Limited t/as GIO, as agent for Nominal Defendant [2015] NSWSC 1530

  • Hearing date: 27 February 2015
  • Decision date: 16 October 2015
  • Court: Supreme Court of NSW
  • Before: Rothman J

Decision:

  1. A declaration that the certificate and statement of reasons issued by Assessor Crane on 20 January 2014 is vitiated by error of law on the face of the record or jurisdictional error.
  2. A declaration that the certificate and statement of reasons issued by the Review Panel on 2 June 2014 is vitiated by error of law on the face of the record and/or jurisdictional error.
  3. The certificate and statement of reasons issued by Assessor Crane on 20 January 2014 be quashed.
  4. The certificate and statement of reasons issued by the Review Panel on 2 June 2014 be quashed.
  5. The plaintiff’s claim for compensation under the Motor Accidents Compensation Act be remitted to the Motor Accidents Authority of NSW to be determined in accordance with law.
  6. The first defendant shall pay the plaintiff’s costs of and incidental to these proceedings, as agreed or assessed. Either party may apply for a special or different order as to costs by filing within 14 days of the date of this judgment a submission in relation thereto and may, for that purpose, include documents said to be relevant to that application, which documents are not otherwise in evidence. The aforesaid submission (excluding attached documents of the kind mentioned) shall be no more than 3 pages in length. Any other party may respond to any such application within a period of 14 days from the date of receipt of any such application. Such response is also confined to 3 pages in length. In the absence of an application for a different course, the question of costs will be dealt with on the basis of the written submissions.

Citation: Claps v Insurance Australia Limited t/as NRMA Insurance [2015] NSWSC 1881

  • Hearing date:1 December 2015
  • Decision date:11 December 2015
  • Court: Supreme Court of NSW
  • Before: Harrison J

Decision:

  1. Substitute the State Insurance Regulatory Authority for the Motor Accidents Authority of New South Wales as the second defendant.
  2. Declare that the Review Panel Certificate dated 20 April 2015 is void and of no force or effect.
  3. Order that the Review Panel Certificate dated 20 April 2015 be set aside.
  4. Remit the matter to a differently constituted Review Panel of the State Insurance Regulatory Authority for determination according to law.
  5. Order Insurance Australia Ltd trading as NRMA Insurance to pay Mr Claps’ costs of and incidental to the summons.
  6. Otherwise make no order as to costs.

Citation: Wehbe v Insurance Australia Ltd t/as NRMA Insurance Ltd [2015] NSWSC 1506

  • Hearing date: 13 & 30 October 2015
  • Decision date: 18 December 2015
  • Court: Supreme Court of NSW
  • Before: Davies J

Decision:

  1. Summons dismissed.
  2. The Plaintiff is to pay the Defendants’ costs.

Citation: QBE Insurance (Australia) Ltd v Mordue [2015] NSWCA 380

Hearing date:21 October 2015

  • Decision date: 2 December 2015
  • Court: Court of Appeal, Supreme Court of NSW
  • Before: Beazley P and Ward JA at [1];
  • Simpson JA at [59]

Decision:

  1. Appeal allowed.
  2. Set aside the orders of Adams J made 20 February 2015.
  3. Order the first respondent to pay the appellant’s costs of the appeal and in the court below.
  4. Order that the first respondent is to have a certificate under the Suitors’ Fund Act 1951 (NSW) if otherwise eligible.

Citation: Allianz Aust Insurance Ltd v Habib & Ors [2015] NSWSC 1719

  • Hearing date:19 October 2015
  • Decision date:20 November 2015
  • Court: Supreme Court of NSW
  • Before: Beech-Jones J

Decision:

  1. Rejects the tender of pages 4 to 13 of the annexures to the affidavit of Renee Maree Sadler sworn 24 July 2015.
  2. Orders that the certificate dated 14 May 2015 purportedly issued under s 94(4) of the Motor Accidents Compensation Act 1999 concerning the claim made by the first defendant be set aside.
  3. Orders that the first defendant’s claim under Chapter 4 of the Motor Accidents Compensation Act 1999 be re-determined according to law.
  4. Orders that the first defendant pay the plaintiff's costs of the proceedings.

Citation: Insurance Australia Ltd v Clewley [2015] NSWSC 1805

  • Hearing date:7 December 2015
  • Decision date:15 February 2016
  • Court: Supreme Court of NSW
  • Before: Fagan J

Decision:

  1. The decision of the second defendant dated 7 August 2015 to refuse the plaintiff’s application for further medical assessment (made on 16 July 2015) under s 62(1)(a) of the Motor Accidents Compensation Act 1999 (NSW) is set aside.
  2. The plaintiff’s application for further medical assessment is remitted to the third defendant for determination according to law.

Citation: Jubb v Insurance Australia Limited t/as NRMA Insurance [2015] NSWSC 1617

  • Hearing date:7 September 2015
  • Decision date:3 November 2015
  • Court: Supreme Court of NSW
  • Before: Harrison AsJ

Decision:

  1. The amended summons filed 7 September 2015 is dismissed.
  2. Costs are reserved.
  3. Liberty to apply.