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Appendix 2: Practice guidance - death claims

Overview

Death claims can be some of the most challenging claims a case manager is required to determine and manage. These claims require proactive and sensitive management.

Case managers determining death claims are required to make fair, evidence-based, timely decisions while interacting empathetically with family members, employers and other persons impacted by the death. Matters can be factually, legally and medically complex.

Case managers involved in determining and managing death claims require training and support. Insurers should consider how best to achieve this within their internal and external resources.

Entitlements

If a work injury results in the worker’s death, his or her dependants or estate are entitled to compensation. Entitlements can include:

  • A lump sum death benefit apportioned among dependants. If there are no dependants the lump sum death benefit is paid to the legal personal representative of the deceased worker’s estate. The lump sum amount payable is the amount in force at the date of the worker’s death (not the date of injury or the date the claim is brought).
  • Weekly compensation for dependent children continue until the child reaches the age of 16 years and in the case of a child who is a student, until the age of 21 years.
  • Reasonable funeral expenses. When considering what is reasonable, insurers should consider the diverse religious and cultural beliefs and practices that exist in Australian society in the 21st century. Reasonable funeral expenses can include (but are not limited to):
    • ­   the cost of the funeral service (including cremation or burial)
    • ­   cemetery site
    • ­   death certificate
    • ­   flowers
    • ­   coffin
    • ­   funeral director’s professional fees
    • ­   catering for mourners
    • ­   any other reasonable costs associated with the legitimate disposal of a human body.
  • Expense of transporting the body to the deceased’s usual place of residence or what would be an appropriate place for its burial or cremation (whichever is the lesser cost).

The monetary values of the various benefits are indexed periodically and are listed in the Workers Compensation Benefits Guide available on the SIRA website.

Entitlements may also exist at common law in respect of a workplace death, for example under the Compensation to Relatives Act 1897. Families should be encouraged to get independent legal advice on any common law entitlements.

Note: Prior to the Workers Compensation Legislation Amendment (Benefits) Act 2008, the benefits provided in Division 1 Part 3 of the 1987 Act (sections 25 to 32) were for the benefit of dependants only, apart from funeral and associated expenses.

Determining whether death results from an injury

Insurers should not wait for a formal claim from the family or estate of a deceased worker before commencing their investigation. Families may be unaware of their rights and delay may make it difficult for the insurer to gather contemporaneous evidence.

Worker

When determining if the deceased worker is a ‘worker’ under the legislation, the same rules apply.

Injury

Section 25 of the 1987 Act requires that “death results from an injury”. Death itself is not an injury. Compensable “injury” to the deceased worker needs to be proven in the usual way.

Causation

Death can occur immediately or soon after an incident or some considerable time later.

The test commonly applied on causation is that in Kooragang Cement v Bates. A common-sense evaluation of the causal chain is required and there is no requirement that the injury be the immediate or proximate cause of death. Incapacity, impairment or death can have multiple causes - causation can be established if an event makes a material contribution to death.

Kooragang Cement v Bates [1994]

The worker suffered a back injury. He became depressed and inactive as a consequence of his back injury. He suffered cardiac disease and ultimately died from a myocardial infarction some years after the accident. The Court held that:

“…. each case where causation is in issue in a worker’s compensation claim, must be determined on its own facts. Whether death or incapacity results from a relevant work injury is a question of fact. The importation of notions of proximate cause by the use of the phrase 'results from', is not now accepted. By the same token, the mere proof that certain events occurred which predisposed a worker to subsequent injury or death, will not, of itself, be sufficient to establish that such incapacity or death 'results from' a work injury. What is required is a common-sense evaluation of the causal chain'.

Intentional self-inflicted injury

Compensation is not payable in respect of any injury to or death of a worker caused by an intentional self-inflicted injury (section 14(3) of the 1987 Act).

Where it is not clear the worker’s death was as a result of an accident or self-inflicted, the burden of proof falls on the employer to establish that the worker’s death was self-inflicted.

Bluescope Steel Limited v Pitaroska [2014] NSWWCCPD 21

Mr Pitaroska died when his body was immersed in a large vat of molten metal known as a “Treadwell”. The employer asserted that the deceased had jumped into the Treadwell with the intention of ending his life, and sought to rely upon section 14(3) of the 1987 Act as a bar to compensation. The deceased’s widow argued her husband had accidentally fallen to his death. The Arbitrator determined that the employer had not discharged the burden of proof that, on the balance of probabilities, the proper inference to be drawn from all of the evidence was that the deceased worker had committed suicide. Accordingly, the worker’s death could not be proved to be self-inflicted and s14(3) of the 1987 Act did not apply.

On appeal, the Deputy President found that the Arbitrator had not erred in her approach in respect of the onus of proof.

In matters that require a consideration of accidental or intentional self-harm, insurers should be mindful of the significant decision of the NSW Court of Appeal in Holdlen Pty Ltd v Walsh [2000] NSWCA 87.

The Holdlen decision was a case of death by suicide. The employer appealed the awards of lump sum and weekly payments to a dependent child. The worker committed suicide and the trial judge found the worker’s death resulted from a work injury and the worker was insane at the time of his death. The Court of Appeal formulated the ‘proper enquiry” and it is this approach that continues to be applied in self-harm matters – that is, that the deceased’s volition was overthrown such that the suicide could not be characterised as an intentional act.

Holdlen Pty Ltd v Walsh [2000] NSWCA 87

The worker had suffered a severe work-related knee injury that the trial judge found led to chronic depression, alcohol abuse and the breakdown of his marriage. The Court of Appeal considered a long line of cases founded on the principle that suicide would break the chain of causation unless the worker was insane at the time of suicide so that the suicide would not be an intentional act. The Court held that death by suicide could be found to have resulted from a work-related injury without a finding that the worker was insane at the time of the suicide and the proper enquiry is into the worker’s mental state to determine whether the worker’s will was overborne so that the suicide was not an intentional act.

Information to determine liability

In determining a claim, evidence is required to establish:

  • the cause of death
  • the relationship between death and employment.

The type and amount of information required will vary based on the cause and circumstances of death. A case manager should gather and carefully consider the available relevant information in order to make a sound, evidence-based decision.

Documents may include (but is not limited to):

  • Death Certificate
  • post mortem (or autopsy) results
  • accident reports (for example, Police reports)
  • information from the employer and witnesses
  • any factual investigation or expert reports
  • treating medical records
  • ambulance reports and hospital admission notes.

In the case of a worker who had an existing workers compensation claim prior to death, the entire claim file may need to be reviewed. Insurers should not, in the general course of events, defer making a decision solely because a matter is referred to the Coroner.

Role of the Coroner

The role of the Coroner is to investigate certain kinds of deaths in order to determine the identity of the deceased and the date, place, circumstances and medical cause of death. The State Coroner oversees and co-ordinates coronial services in NSW, and is assisted by the Deputy State Coroners. The State Coroner and Deputy State Coroners are all Magistrates, with Coroners situated in Local Courts around New South Wales.

Doctors, healthcare professionals, emergency service workers and police are under a statutory obligation to report deaths to the Coroner in a wide range of circumstances.

A large proportion of reported deaths do not result in an inquest. An inquest is a court hearing where the Coroner considers evidence to determine the identity of the deceased and the date, place, manner and cause of death of the deceased. The Coroner can decide a formal inquest is not necessary, if they are satisfied that there are no outstanding issues from the available evidence. It can take several months for the Coroner to obtain the information necessary to make this decision which is why it is important insurers should not, in the general course of events, defer making a liability decision solely because a matter is referred to the Coroner.

More information about the Coroners Court is available at www.coroners.justice.nsw.gov.au.

Dependency

“Dependants” is defined in section 4 of the 1998 Act. The definition is broad and inclusive. For example, children of the deceased born posthumously have been held to be a dependant.

Dependency is a question of fact and can require a careful consideration of complex situations. Dependency extends beyond financial support and can include services rendered by the deceased which are capable of quantification in monetary terms.

Abraham Seda Ghati v Sayan & Ors [2010] NSWWCCPD 74

The deceased died as a result of a fall from a scaffold while carrying out welding work. At the time of his death the deceased was 54 years old. He had four children, the youngest of whom was in his final year of High School. In considering the question of dependency, the Deputy President was of the view that consideration of “past events and future probabilities” are relevant both to the question of the existence or otherwise of the dependency and to the question of the extent of the dependency, that is, whether it be whole or partial.

In the context of death claims, dependency is relevant for two separate entitlements:

  • lump sum death benefit
  • weekly compensation payable to dependent children.

There is no limitation on age of dependants for the purposes of the lump sum death benefit; the adult children of a deceased worker can be considered a dependant. A dependant can include a person who had a reasonable expectation of support, financial or in kind, from the deceased either at that time or in the future.

However, there are age limits for dependent children to be eligible to receive weekly compensation (refer section 25 of the 1998 Act).

Information to determine dependency

The identification of potential dependants should not delay the making of a liability decision. Optimal case management in death claims is not a linear process and insurers should progress multiple lines of enquiry simultaneously. Where there is no issue that the death benefit is payable, insurers should make the liability decision while continuing to communicate with all potential dependants.

It is often the case that insurers will need to commence proceedings in the Commission seeking orders for dependency, payment and/or apportionment. This assists the Commission and families to speed up the process and reduce legal costs.

The following sources of information may inform dependency decisions:

  • statutory declarations including declarations as to any other known dependants
  • employment records (naming next of kin and superannuation nominations)
  • Marriage Certificate
  • Birth Certificate(s)
  • Death Certificate
  • Last Will and Testament
  • Probate or Letters of Administration
  • financial records (tax returns, Centrelink details, bank account details).

Apportionment

If the insurer is fully satisfied there is only one dependant of the deceased (whether wholly or partially dependent), then the entire lump sum death benefit should be paid to that dependant.

If there are no dependants, the lump sum should be paid to the deceased’s legal personal representative in accordance with section 32 of the 1987 Act. A decision to pay in accordance with section 32 of the 1987 Act should be based on unequivocal evidence that the deceased left no dependants.

However, if there is more than one dependant or there is any reason to believe there may be more than one dependant, insurers must refer the matter to the Commission or the NSW Trustee & Guardian (section 29(1) of the 1987 Act).

Note: for all practical purposes, this power is not exercised by the NSW Trustee & Guardian and they will refer matters back to the Commission as the body with exclusive jurisdiction in matters arising under the Acts.

In proceedings arising out of the death of a worker it is essential that all potential dependants are identified and joined to the proceedings (even though the person initiating the proceedings may not be acting in the interests of the other parties). Insurers should be mindful of the Commission Rules in this regard.

Each potential dependant may be able to seek funding for separate legal representation by contacting the WIRO on 13 94 76. This applies equally to the children of deceased workers where there is a surviving parent.

Dependent children have their own entitlement to their share of the lump sum benefit – their right does not derive through their surviving parent. It is not uncommon for a surviving parent to seek orders in the Commission that all, or the majority of, the lump sum death benefit be paid to the parent in order to purchase a family home or pay off a mortgage. The Commission will generally not make such orders. The reason for this is the risk of the dependent children’s entitlements being eroded as a result of the surviving parent re-partnering, step-children, children from a later marriage, etc.

The facts relevant to the apportionment of compensation amongst dependants are set out in the decision in Wratten v Kirkpatrick & Others [1996]:

“The exercise of power to determine the correct amount to be apportioned to each dependant requires an examination of all relevant facts including the extent of past dependence, the anticipated future dependence, the ages of the dependants, their health, special needs, lifestyle, etc”.

It is important that the fact-finding exercise be carried out with due notice to those who may be entitled to a share of the compensation and they should be entitled to present submissions to the Commission in relation to the apportionment.

People can have complex personal histories. The need for proper enquiry and independent legal representation is highlighted in the matter of Kaur v Thales Underwater Systems Pty Ltd [2011] NSWWCCPD 6

Kaur v Thales Underwater Systems Pty Ltd [2011] NSWWCCPD 6

The deceased worker, Mr Dhillon, had been married three times. He died on 20 December 2005. He was first married to Narinda Kaur. There were three children to that marriage – none claimed dependency or workers compensation benefits. After divorcing his first wife, Mr Dhillon married Gurmeet Kaur in 1997. At the time of their marriage Gurmeet had two daughters – one from a previous marriage born in 1984 and a daughter born in 1991 who was the deceased’s daughter. The marriage to Gurmeet Kaur was dissolved in February 2004. On 10 December 2005, Mr Dhillon married Harbendar Kaur. At the time of the marriage, she had two daughters. The children were age 14 and 15 at the time of the worker’s death (just 10 days after the marriage).

Proceedings were brought in the Commission by both Gurmeet Kaur and her children and Harbendar Kaur and her children each claiming dependency. In his decision, His Honour Judge Keating held:

While the respective length of the marriage of the deceased to Gurmeet and Harbendar may be a relevant matter, it is not determinative of the existence or extent of dependency at the date of death. The extent of dependency depends on many things…the question whether there is in fact dependence or reliance at the date of death is not to be answered by looking only to the circumstances as they existed at that date, “past events and future probabilities” have to be considered”.

Payment of compensation

It is usual for the Commission, when ordering and apportioning lump sum compensation, to order that the insurer pay the apportioned amount directly to the widow, widower or de facto and any other dependants who have reached 18 years of age. It is also usual for the Commission to order payments of apportioned amounts in respect of children to the NSW Trustee & Guardian.

Note: Insurers can sometimes be asked to pay the entire lump sum death benefit to the surviving spouse of a worker. For example, the widow of the deceased (and mother of the dependent children) asks for the entire amount to be paid to her in order to discharge a mortgage on the family home. An insurer cannot apportion the lump sum death benefit where more than one dependant or potential dependant is identified. Where more than one dependant is identified, an application must be made to the Workers Compensation Commission to apportion the lump sum death benefit.  Any payments must then be in accordance with the Commission’s orders.

Weekly payments of compensation in respect of dependent children shall be paid to the surviving parent, if there is one. However, the Commission has discretion to make alternative payment orders. For example, where the child is in the care of a grandparent.

Parents and guardians of dependent children in receipt of weekly payments should be encouraged to get independent advice regarding the tax implications of such payments.

Interest

Section 109 of the 1998 Act provides for order by the Commission of interest on compensation prior to the date of order for payment. It is a discretionary power and may be made on the whole or part of a sum payable. It cannot be ordered in respect of periods before a claim is made, is not compound and its function is compensatory and not punitive.

Interest is usually calculated using the rate prescribed by the Uniform Civil Procedure Rules. Because of the substantial nature of the lump sum death benefit, substantial interest can accrue quickly and insurers should be aware of the potential consequences.