This article continues our series on motor accident compensation in NSW. You can read about the procedural requirements of the motor accident compensation scheme in part 3 found here.
The 2017 legislation sets up a very different system for motor accident injury claims. There is now a hybrid scheme providing statutory benefits for injured road users, regardless of fault, coupled with modified common law damages for injured road users, who suffer more than minor injuries, where fault is established. For a detailed examination of the new system, it is necessary to refer to the Motor Accidents Injuries Act 2017 (“MAIA“), the Motor Accidents Guidelines and the Motor Accidents Injuries Regulation. The new scheme under the MAIA imports many of the features of the Workers Compensation scheme, including the procedural complexities of internal and external Merit Reviews.
The MAIA introduces statutory benefits for loss of income, treatment expenses and paid care for all claimants, regardless of fault, for up to 26 weeks, unless the claimant has been charged with or convicted of a serious driving offence. This is a considerable improvement on the scheme as it was under the Motor Accidents Compensation Act 1999 (“MAC Act“) where payment of the lost earnings and treatment expenses was restricted.
After 26 weeks, a claimant is not entitled to statutory benefits if the motor accident was caused wholly, or mostly, by the claimant’s fault. Mostly at fault is defined as contributory negligence greater than 61%. See s 3.11(2) if the MAI Act.
Victims who suffer a minor injury, as defined by s 1.6 of the MAIA, are limited to statutory benefits for six months. A minor injury is a soft-tissue injury or a minor psychological or psychiatric injury. An injury to a spinal nerve that manifests in neurological signs (other than radiculopathy) is regarded as a minor injury.
The clear intention of the new scheme is to limit most road-accident returns to statutory benefits. Fractures are not included in the definition of minor injury.
No damages may be awarded to a claimant if the only injuries arising from the motor accident are minor injuries (s 4.4 MAIA). There is therefore no entitlement to non-economic loss, even if the injured person’s permanent impairment is greater than 10%, if they have suffered ‘minor injuries’ only.
*An exception to this rule: treatment and care after the 26 weeks will be authorised by an insurer where it meets certain criteria as set out in the Motor Accident Guidelines, 5.16, including where treatment and care will improve the recovery of the claimant.
No Entitlement to Gratuitous Care to The Claimant or Their Dependants
The MAIA removes entitlement to damages for gratuitous attendant/domestic care provided to claimant, otherwise known as Griffiths -v- Kirkemeyer damages, as well as damages for gratuitous services which the Claimant no longer can provide to dependants, otherwise known as Sullivan -v- Gordon damages. Those damages are still available as a MAC Act claim by virtue of s 15B of the Civil Liability Act 2002. They are not available under the MAIA as either a statutory benefit (s 3.25 MAIA), or common law damages (s 4.3 MAIA). However, the cost incurred by a claimant in employing someone to provide attendant care services to the claimant, or to their dependants, is recoverable as paid care.
Modified Common Law Damages
Common law damages are now limited under s 4.3 MAIA to:
- Damages for economic loss (loss of earning capacity; costs relating to accommodation or travel; financial management of damages; reimbursement for income tax paid or payable on statutory benefits); and
- Damages for non-economic loss, if the injured person’s degree of permanent impairment is greater than 10% (s 4.11 MAIA), where the claimant’s injuries are not ‘minor injuries’.
A claim for damages cannot be made before 20 months of the date of accident and cannot be settled within two years of the date of accident, unless permanent impairment is greater than 10% (s 6.14(1) MAIA). No claim for damages can be settled unless the claimant has legal representation, or the settlement is approved by the Dispute Resolution Service (s 6.23 MAIA).
As we are approaching two years since the introduction of the MAIA, a flood of such claims is anticipated shortly. Settlements should be the norm as, anecdotally, insurers are not equipped to deal with the volume of claims expected.
Expansion of What Can Be Referred for Medical Assessment
The following can now be the subject of medical assessment (Schedule 2, MAIA):
- Degree of impairment of an injured person’s earning capacity.
- Degree of permanent impairment.
- Whether treatment and care is reasonable and necessary, and related to the accident.
- Whether treatment and care will improve the recovery of an injured person.
- Whether any injury is a ‘minor injury’.
Any medical assessment may be referred for further assessment on one occasion only (s7.24(3) MAIA).
Workers Compensation Benefits Are Prioritised Over CTP Benefits
The CTP insurer can refuse payment of statutory benefits on the grounds that workers compensation is payable, and can require a claimant to make a claim for workers compensation if they consider, on reasonable grounds, that such a claim is reasonable (s 3.35 MAIA).
As s 151Z recovery actions arise only where there is a liability ‘to pay damages’, recovery actions will therefore apply only where the claimant has a non-minor injury.
Establishment of A New Review Process Internal Review
A claimant may request an insurer perform an internal review concerning:
- a merit review matter
- a medial assessment matter
- a miscellaneous claims assessment matter (s 7.9(1) MAIA).
The internal review must be conducted within 14 days of such request (s 7.9(4) MAIA).
Read more about Motor Accident Compensation in NSW in part 5 of the series, “ Dispute Resolution Services”, available here.