Withdrawing s 81 admissions ................................................................................................ 60
6.6.10 QBE v MAA (re White) [2008] NSWSC 434 .............................................................. 61
Withdrawing s 81 notice ........................................................................................................ 61
6.6.11 Insurance Australia Limited v MAA [2013] NSWSC 1439 ......................................... 61
The McCosker case – multiple applications ............................................................................ 61
Issued 1 July 2014 Chapter 6 6 - 4
6.1 General 6.1.1 What is an Exemption? An exemption from CARS means that the claim cannot be assessed at CARS. If
a claim is exempt from assessment at CARS, the PCA issues a certificate of
exemption certifying that the claim is exempt from assessment under either
s 92(1)(a) or (b) of the Act. Once a certificate of exemption is issued, a Claimant
can commence legal proceedings in accordance with s 108(1)(a) and pursue in
court his or her claim for compensation under the Act.
A certificate of exemption, unless issued by mistake (on the part of CARS) or
possibly if induced by fraud (by a party on CARS) cannot be withdrawn and a
claim that has been validly exempted cannot subsequently be assessed at
CARS.
Exemption from CARS results in exemption from Schedule 1 of the costs
regulations (Professional costs - see cl 10 Motor Accidents Compensation
Regulation 2005) but does not mean exemption from Schedule 2 of the costs
regulations (Medico-legal fees) or exemption from MAS.
6.1.2 How are Claims Exempt from Assessment?
The Act provides two bases for exemption:
1. Section 92(1)(a) of the Act – 'A claim is exempt … if the claim is of a
kind that is exempt under MAA Claims Assessment Guidelines …'.
Applications made under this section are known as ‘mandatory
exemptions’ because no discretion is involved.
2. Section 92(1)(b) of the Act – 'A claim is exempt … if a Claims Assessor
has made a preliminary assessment of the claim and has determined
(with the approval of the PCA) that it is not suitable for assessment …’.
Applications made under this section have become known as
Issued 1 July 2014 Chapter 6 6 - 5
‘discretionary exemptions’ because both the Assessor and the PCA
have a discretion to determine whether or not the claim is suitable for
assessment and therefore whether or not the claim is to be exempt
from assessment.
6.1.3 Applications for exemption For claims made before 1 October 2008, an application must be made in
accordance with the time limits of s 91 in force at that time, that is more than 2
months after the insurer’s offer under s 82 or, immediately if the insurer was duty
bound to make an offer. An application for exemption can be made at any time if
liability (as defined in 6.2.3) is wholly denied; it is a death claim or the claimant’s
injuries have not stabilised within 3 years of the date of the accident.
For claims made on or after 1 October 2008, the time limits were amended and in
accordance with s 91(2)(c) and following the Court’s interpretation in Gudelj v
MAA [2011] NSWCA 158, either party can apply to have a claim exempted at any
time during the life of the claim.
For a mandatory exemption under s 92(1)(a) the party applying for the exemption
must fill in a CARS form 1A.
For a discretionary exemption under s 92(1)(b) the party applying can either fill in
section 6A of the CARS form 2A or 2R or make an application by letter or orally
in the course of a general assessment.
The PCA can exempt a claim that is the subject of an application for general
assessment on the mandatory grounds under s 92(1)(a) without a formal
application (CARS form 1A) from either party if the PCA is satisfied that the claim
falls within one of the circumstances set out in cl 8.11 of the Guidelines.
Issued 1 July 2014 Chapter 6 6 - 6
A claim cannot be exempted under either s 92(1)(a) or (b) if the only application
before CARS is an application for special assessment of a dispute under s 96
(see Paice v Hill [2009] NSWCA 156 at [43])
Issued 1 July 2014 Chapter 6 6 - 7
6.2 Section 92(1)(a) – Mandatory Exemptions 6.2.1 Introduction Section 92(1)(a) of the Act provides that a claim is exempt from assessment if it
is of a kind exempted by the Guidelines or the Regulations.
There are no relevant regulations. However clause 8.11 of the Guidelines
provides that for the purpose of section 92(1)(a) the PCA shall issue a certificate
of exemption when satisfied that, as at the time of the assessment, the claim
involves one or more of the circumstances listed in cl 8.11.
If the PCA is satisfied that one or more of the above circumstances apply to the
claim, the PCA has no discretion and must exempt the claim. Each of the
circumstances will be discussed in turn as will the opening words of cl 8.11.
6.2.2 What circumstances apply?
Clause 8.11 For the purpose of section 92(1)(a), the PCA shall issue a certificate of exemption when satisfied that, as at the time of the consideration of the application, and after any preliminary assessment of the application, the claim involves one or more of the following circumstances.
The opening words of cl 8.11 require the PCA to consider the circumstances of
the claim ‘at the time of the [PCA’s] consideration of the application’. So if an
application for exemption is lodged at a time when the Claimant is 17 but by the
time the PCA considers the application the Claimant has turned 18, it would
appear the claim does not have to be exempted under s 92(1)(a) and cl 8.11.3.
Similarly if, at any time during the life of the claim fault is denied but at the time
the PCA considers the application for exemption the Insurer has admitted fault,
then the claim may not have to be exempted under the mandatory provisions.
Issued 1 July 2014 Chapter 6 6 - 8
The opening words of cl 8.11 also enable the PCA to undertake a preliminary
assessment of the ‘application’, in order to reach a level of satisfaction about
whether the claim is one that should be exempted.
6.2.3 Fault denied
Clause 8.11.1 Liability is expressly denied by the insurer, in writing, but only in circumstances where liability is denied because the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is denied;
(Note: Only denials of liability where fault is denied will satisfy this requirement. Denials of liability for any other reasons, but where the fault of the owner or driver of a motor vehicle in the use or operation of the vehicle is not denied, will not satisfy this requirement.)
For a claim to be exempt under s 92(1)(a) and cl 8.11.1, the PCA must be
satisfied that liability is denied because fault is denied. Liability may be denied of
course for many reasons (for example the accident is not a motor accident within
the meaning of s 3, the accident involving an unregistered vehicle did not occur
on a road or road related area or the claimant who is unrelated to the victim
sustained nervous shock after an accident but did not witness it and so on) but it
is only those claims where liability is denied because fault is denied that must be
exempt under the mandatory provisions.
Liability must be expressly denied by the insurer and it must be done in writing.
This suggests that consideration must be given to the Insurer’s notice issued
under s 81(1) or any subsequent letter about liability. In cases where the Insurer
seeks to deny fault after first having admitted it in a s 81(1) or other notice, does
the claim have to be exempted under s 92(1)(a)? Section 81(4) permits an
insurer to admit liability after having denied it but does not say anything about an
insurer’s ability to deny after having admitted liability. Nominal Defendant v
Gabriel [2007] NSWCA 52 found that a s 81 notice binds an insurer whilst at
CARS, but is otherwise an out of court admission for the purposes of litigation.
Reference should also be made to the cases of QBE v MAA (re White) [2008]
NSWSC 434 and AAMI v Cassidy [2009] NSWSC 804 which dealt with the pre
Issued 1 July 2014 Chapter 6 6 - 9
2008 version of the guidelines (which also did not refer to s 81) but both involved
allegations of contributory negligence.
Clause 8.11.1 requires the mandatory exemption of a claim if the insurer denies
fault, expressly and in writing. By not referencing s 81 it may be arguable that a
denial of fault in a letter from an insurer to a claimant at some point in time after
an admission has been made (in a s 81 notice) will result in the exemption of the
claim.
6.2.4 Contributory Negligence > 25%
Clause 8.11.2 the fault of the owner or driver of a motor vehicle, in the use or operation of the vehicle, is not denied by the Insurer of that vehicle, but the Insurer of that vehicle makes an allegation in its written notice issued in accordance with section 81, that the Claimant was at fault or partly at fault and claims a reduction of damages of more than 25%;
This clause has been repealed for applications made to CARS after 1 May 2014.
It continues to apply for applications made before that date and requires
exemption if:
1. Fault is not denied
2. The allegation of contributory negligence is more than 25% (and not equal
to it) and
3. The allegation is written in a notice issued under s 81(1) or 81(4).
6.2.5 Legal incapacity
Clause 8.11.3 the claimant, or in a claim for an award of damages brought under the Compensation to Relatives Act 1897 one of the dependents, is a ‘person under a legal incapacity’;
(Note: See definition in Chapter 1 at clause 1.6.27)
CARS has no protective jurisdiction over persons under a legal incapacity. CARS
has no power, for example to ‘order’ or direct the payment of settlement monies
Issued 1 July 2014 Chapter 6 6 - 10
to a trustee and the Act and Guidelines make no provision of the appointment of
a tutor or guardian for someone with a legal incapacity. For that reason CARS
must exempt these claims.
Clause 1.6.27 defines ‘person under a legal incapacity’. Claimants under the age
of 18 are clearly covered by the terms of cl 1.6.27(a). Compensation to relatives
claims made where one or more of the dependents are children or otherwise lack
legal capacity are also captured by this clause. Other claims captured would be
those where the Claimant is a person under mental health orders (cl 1.6.27(b)),
guardianship orders (cl 1.6.27(c)) or a protected person (cl 1.6.27(d)).
Clause 1.6.27(e) includes ‘incommunicate’ persons within the definition. An
incommunicate person is someone ‘who has such a physical or mental disability
that he or she is unable to receive communications, or express his or her will,
with respect to his or her property or affairs’.
In determining whether someone is an incommunicate person the PCA (or an
Assessor who suspects a person may be an incommunicate person) should have
regard to medical evidence, lay evidence from the claimant, family and friends
and may wish to refer to the Capacity Toolkit published by the Department of
for a greenslip that is claims made against non-CTP entities, for example the
owner or driver of an uninsured forklift in a covered and enclosed warehouse.
If a person is injured by an interstate vehicle in New South Wales, CARS does
have power to hear and determine that claim and most interstate insurers are
aware of the operation of the scheme and CARS although interstate legal
practitioners may not be familiar with the intricacies of the scheme and its
processes.
If a person is injured interstate but wishes to commence legal proceedings in
New South Wales because they live here, have suffered loss here or otherwise
have a substantial connection with the state, it is not clear whether a certificate of
exemption is required. As CARS would not have the expertise to hear and
determine those claims a certificate of exemption is usually granted to avoid
disputation and arguments in respect of any court proceedings that may be
commenced in respect of that claim.
6.2.7 Denial of indemnity
Clause 8.11.5 - the insurer has notified the claimant, and the owner or driver of the motor vehicle against which the claim has been made under the third-party policy provided for in section 10 of the Act, in writing, that it declines to indemnify that owner or driver.
Insurers sometimes confuse a denial of indemnity with a denial of liability
although often a s 81(1) notice may inform the Claimant that the insurer denies
liability because indemnity has been declined (which would appear to be a valid
s 81(1) notification). If a CTP insurer declines to indemnify the owner or driver of
a motor vehicle it purports to insure, the insurer is essentially denying that the
statutory policy of insurance (set out in s 10) covers the vehicle and answers the
claim in the circumstances of the claim. Example where indemnity is declined is
where a pedestrian walks past a vehicle with a protruding load and ‘collides’ with
the load, where an animal jumps off a utility and attacks a pedestrian or many of
the loading and unloading cases.
Issued 1 July 2014 Chapter 6 6 - 12
Insurers acting as agent for the Nominal Defendant (in the case of an unidentified
vehicle) will often issue a s 81 notice ‘denying indemnity’ when they possibly
mean to deny liability. As an unidentified vehicle may or may not have a NSW
policy of insurance it is difficult to understand how an agent for the Nominal
Defendant could decline to indemnify the owner or driver of it.
This new clause requires both the Claimant and the owner/driver of the vehicle to
be advised that the insurer has declined to indemnify.
Claims where indemnity is disputed are exempted because the owner or driver
may need to be separately represented.
6.2.8 Fraudulent claims
Clause 8.11.6 - the insurer alleges that the claim is a fraudulent claim in terms of the circumstances of the accident giving rise to the claim.
(Note: For example where it is alleged that the accident may have been staged or where a person claiming to have been a passenger in the vehicle is alleged to have been the driver of the vehicle.)
The Guidelines distinguish between fraudulent claims in terms of the
circumstances giving rise to the claim which must be exempted under s 92(1)(a)
and cl 8.11.6 and claims where the Insurer alleges that the Claimant has made
false or misleading statements in connection with the claim which is a matter to
be considered by an Assessor when deciding whether a claim is suitable or not
suitable for assessment under s 92(1)(b) and cl 14.16.11 (see paragraph 6.6.12
of this Chapter). The type of ‘fraud’ the subject of this clause goes beyond mere
exaggeration to an intentional. The note below the clause in the Guidelines gives
an indication of the types of matters that should be exempted under this clause,
Issued 1 July 2014 Chapter 6 6 - 13
6.3 Procedural issues in mandatory exemptions
6.3.1 Applications for general assessment of an ‘Exemptible’ Claim A party may lodge a 2A application for general assessment of a claim that is
clearly exempt under s 92(1)(a) and cl 8.11 (for example a child’s claim). The
CARS case manager should identify these matters and they should not be
allocated.
If an exemptible claim is allocated, the Assessor should do the following:
1. If the Assessor realises that the claim is exemptible well before the first
PC the Assessor should ring or email the PCA (or an officer of CARS)
and if requested then return the file to CARS with a brief note to the
PCA so that the PCA can issue a certificate of exemption.
2. If the Assessor realises at or shortly before the PC that the claim is
exemptible the Assessor should explain to the parties why the
Assessor has formed the view that the claim must be exempted and
ascertain the parties’ attitude to the exemption of the claim:
a. If both parties agree that the claim must be exempted under
s 92(1)(a), the Assessor is to return the file to the PCA with
the PC report citing cl 14.16.1. The report does not need to
be long it just needs to explain that the Assessor is returning
the file to the PCA because the claim requires exemption.
Advise the PCA whether one or both parties are also of the
view that the claim must be exempted
b. If only one of the parties is of the view the claim must be
exempted under s 92(1)(a), the Assessor should defer the
assessment and schedule another PC, and advise the
parties that one of them needs to lodge an application for
Issued 1 July 2014 Chapter 6 6 - 14
exemption (CARS form 1A) and that such an application
needs to be determined by the PCA.
If a party then makes an application for exemption under
s 92(1)(a) of the Act to CARS by lodging a CARS form 1A,
CARS will notify the Assessor and advise the Assessor of
the likely date of determination of that application. The
Assessor should hold on to the file and defer the general
assessment of the claim until such time as the PCA has
determined the CARS 1A matter.
If a party makes an application to the Assessor, under s 92(1)(a) of the Act, after
the matter is allocated, the Assessor needs to be aware that the Claims Assessor
does not have power to determine the application as only the PCA has that
power. The Assessor should, at the next PC, do the following:
1. If the Assessor forms the view the claim is an exemptible claim and
both parties are also of the view the claim is exemptible under
s 92(1)(a) the file should be sent back to the PCA (clause 14.16.1) and
the PCA will issue a certificate (if the PCA agrees) or the parties may
be directed by the PCA to make any submissions on whether the claim
is exemptible.
2. If the parties are in dispute about whether the claim is exemptible
under s 92(1)(a) then the Assessor should request the party making
the application lodge a form 1A application for exemption within 5 - 10
working days and reschedule another PC 4 - 6 weeks later. The
application for exemption will be referred to the PCA and dealt with by
the PCA.
Issued 1 July 2014 Chapter 6 6 - 15
The Assessor’s PC report will reflect that an application for exemption
has been made and the PCA is now dealing with the application.
In both instances CARS will advise the Assessor of the PCA’s
determination on completion of that determination. The Assessor is to
hold onto the file. If the PCA determines the claim is not exemptible
under section 92(1)(a) then the Assessor will need to continue with the
assessment of the claim.
Care needs to be taken with the wording that is adopted to ensure the
Claims Assessor is not seen to be exercising the PCA’s jurisdiction.
Sam
ple
Deci
sion
IS THIS CLAIM EXEMPTIBLE? At the time the application for general assessment was filed, the Insurer had not issued a notice under s 81. The Insurer has now issued a notice which denies fault.
The Claimant informs me that he agrees the notice is a valid notice which confirms the previous deemed denial of liability. Both parties are of the view the claim should be exempt from assessment and it appears to me that the claim is one that should be exempt.
I will refer the file back to the PCA under cl 14.16.1 on the basis that it is not suitable for assessment because it appears that the claim must be exempt under the mandatory provisions of s 92(1)(a) of the Motor Accidents Compensation Act and cl 8.11.1 of the Claims Assessment Guidelines.
6.3.2 Applications for special assessment of an ‘Exemptible’ Claim
Either the Claimant or the Insurer may refer a dispute to CARS that has arisen in
connection with the claim (for example a late claim dispute), by lodging a CARS
5A application for special assessment form. A party may refer a dispute in
connection with a claim that is clearly exempt under s 92(1)(a) and cl 8.11 (for
example a child’s claim).
Generally in these cases, the CARS case manager will, before allocating the
special assessment to a Claims Assessor, encourage one or other of the parties
Issued 1 July 2014 Chapter 6 6 - 16
to lodge an application for exemption (CARS form 1A) but in most cases the
parties will do that. However in some matters the parties will not and the question
arises - does CARS have power to determine a dispute in such a case?
The Court of Appeal in Paice v Hill [2007] NSWCA156 dealt with an issue about
whether time had stopped running (for the purposes of the three year limitation
period on commencing court proceedings imposed by s 109) while a late claim
dispute was being resolved at CARS. Justice Ipp, with whom the other judges
agreed, said this:
[42] Section 109(2) refers expressly to the issuing of “a certificate as to the assessment or exemption from assessment”. It does so in the context of providing that time does not run for the purposes of s 109 from the time that a claim has been referred to a claims assessor for assessment until two months after such a certificate has been issued.
43 By s 92(1)(b), read with s 92(2), a certificate of exemption could be issued if a claims assessor made a preliminary assessment of the claim and determined (with the approval of the Principal Claims Assessor) that it was not suitable for assessment. By s 92(1)(b), therefore, a certificate for exemption of assessment could only be issued after a claims assessor had made a preliminary assessment of the claim. For a claims assessor to make such a preliminary assessment, a claim had to be referred for general assessment under s 94. Thus, a certificate of exemption could only be issued after a claim had been referred for general assessment under s 94.
[44] I repeat that suspension of time occurred under s 109(2) from the time a claim had been referred for assessment until two months after a certificate as to the assessment or exemption from assessment was issued. The fact that the referral of a claim for general assessment under s 94 (and not s 96) was a precondition to the issuing of a certificate of exemption supports an inference that the “assessment” under s 109(2) was required to be an assessment under that section (and not under s 96).
[45] I would add that a general assessment under s 94 would be far more appropriate for carrying out a preliminary assessment of a claim with a view to considering whether a certificate of exemption from assessment should be issued than an assessment of a limited issue of the kind that would give rise to a dispute under s 96.
Paice v Hill therefore supports the proposition that a claim cannot be exempted
when the only matter before CARS is the dispute that has arisen in connection
Issued 1 July 2014 Chapter 6 6 - 17
with the claim. In order for a claim to be exempted under s 92(1)(a) or (b) the
claim is to be referred and the claim
is to be considered.
Claims Assessors who have a special assessment before them in a claim where
for example the claimant is 10 or where fault is denied should not send the file
back with a recommendation the claim is not suitable but should encourage the
parties to lodge a CARS 1A and defer the special assessment until such time as
CARS advises the claim has been exempt.
Issued 1 July 2014 Chapter 6 6 - 18
6.4 Section 92(1)(b) – Discretionary Exemptions 6.4.1 General Procedure Section 92(1)(b) of the Act provides that a claim is exempt from assessment if a
Claims Assessor has made a preliminary assessment of the claim and has
determined (with the approval of the PCA) that it is not suitable for assessment.
An application for exemption under this section can be made by the Claimant, the
Insurer or both or by the Assessor’s own motion at any time during the course of
the assessment (clause 14.11). The parties may have flagged the issue of
suitability at the time of lodging the application for general assessment or the
reply. Alternatively it may have been raised in correspondence received at CARS
before allocation. In these circumstances the letter of allocation should alert the
Assessor that there is likely to be an issue of suitability for the Assessor to
determine. In most cases, however, the parties will raise suitability directly with
the Assessor.
If one or both of the parties raise suitability as an issue then the Assessor may
wish to seek written submissions but does not have to. The Assessor can also
hear oral argument at a preliminary conference with or without submissions.
Assessors should not advise the party making the application for exemption to
lodge a duplicate or replica 2A form.
6.4.2 Suitable or not suitable
The Assessor is encouraged to give brief reasons to the parties in a PC report or
separate decision.
If the Assessor determines the claim is suitable for assessment, reasons are
provided to the parties and to CARS, but the PCA is not required to approve the
Assessor’s determination and so the assessment progresses as usual.
Issued 1 July 2014 Chapter 6 6 - 19
If the Assessor determines the claim is not suitable for assessment, reasons are
provided to the parties and the file is returned to CARS with a copy of those
reasons. The CARS case manager will pass the file to the PCA who will consider
the Assessor’s recommendations. If the PCA approves the recommendation the
PCA will issue a certificate of exemption and close the CARS file. If the PCA
does not approve the recommendation the PCA will provide reasons to the
parties and allocate the claim to another assessor for assessment.
6.4.3 What is Required in Section 92(1)(b) Reasons?
Whether or not there is an obligation to do so the Assessor’s reasons give
guidance to the PCA in deciding whether or not to approve any recommendation
that a claim is not suitable for assessment. Guidance has been provided by
Justice Sully at [37] in the Lorusso matter (Allianz Australia Insurance Limited v
MAA and others [2006] NSWSC 1096):
What is fairly to be expected of the Assessor is that there should be available a statement at once simple, succinct and clear by reference to which either an appellate Court or some other Court … can test logically and according to correct principle whether the Assessor’s decision is supported by a process of reasoning that is supportable in law and in fact.
The ‘simple, succinct and clear’ reasons in a matter where both parties are
submitting the claim is not suitable should be fairly short and could be included in
a preliminary conference report or in the template entitled “Procedural decision
made during the course of an assessment.”.
If the exemption of the claim is contested (and particularly where it is vigorously
contested) the reasons should be set out with the following headings:
1. General introduction covering the date of accident, when the claim was
made, when the application was made, who made it, is it supported or
contested and so on.
Issued 1 July 2014 Chapter 6 6 - 20
Sam
ple
Deci
sion
INTRODUCTION John Smith was injured in a car accident on 3 March 2010. On 16 June 2010 Mr Smith made a claim against XYZ Insurance the third party insurer of the vehicle Mr Smith says caused his accident.
On 12 February 2013 Mr Smith referred his claim for assessment and in due course the claim has been allocated to me. XYZ has lodged a reply which indicates that XYZ is of the view the claim is not suitable for assessment. The Claimant opposes the application and the issue of suitability for assessment was discussed at the first preliminary conference held on 14 July 2013.
2. Relevant Considerations
a. What are the relevant considerations? Set out, dot points will do,
what you identify as the matters relevant for your consideration.
Start with the matters listed in cl 14.16 of the Guidelines that the
parties rely on and ask the parties what other considerations there
are, if you are in doubt and record this.
Note the following from Justice Campbell’s decision in the Banos
case (Insurance Australia Limited t/as NRMA Insurance v Banos
[2013] NSWSC 1519):
As clause 14.16 of the claims assessment guidelines suggest, a claim may not be suitable for assessment for a variety of reasons. Clause 14.16 provides eleven examples of considerations that may be taken to be relevant to the claims assessor's decision. Clearly it is not incumbent upon the claims assessor to consider each one of those matters in every case in which s.92(1)(b) is invoked. Rather, the function of the claims assessor requires him or her to bear firmly in mind at all times the statutory question, which, I reiterate, is whether the claim is not suitable for assessment under Part 4.4 of the Act. Naturally, in deciding the matter he or she is required to weigh and assess such of the clause 14.6 grounds, if any (and the question is not limited to those considerations), as the parties may invoke.
b. There is no need to mention the irrelevant matters listed in the
Guidelines. If a party raises matters that you consider are irrelevant
you should mention them and indicate why they are irrelevant.
Issued 1 July 2014 Chapter 6 6 - 21
Sam
ple
Deci
sion
RELEVANT CONSIDERATIONS In this application, the Insurer relies on cl 14.16.3, 14.16.4 and 14.16.9.
In relying on cl 14.16.9 the Insurer submits that the Claimant lives in London and his evidence will need to be taken ‘on commission’ in the UK. The Claimant’s solicitor confirms the Claimant has returned to live in Australia having lived in the UK for only a year. The Insurer concedes that cl 14.16.9 is therefore no longer a relevant consideration to my decision in this matter.
The Insurer says that the claim involves complex legal issues associated with the definition of ‘motor accident’ and complex factual issues associated with the circumstances of the accident. At the preliminary conference I confirmed with the Insurer that no other matters listed in cl 14.16 are relevant to my determination of the issue of suitability.
3. Deal with each of the relevant considerations with the subheading asking
a question for example: Are the factual matters in this claim complex and if
so are they so complex that they cannot be dealt with at CARS? Are there
complex issues of causation and if so are they so complex that they
cannot be dealt with by CARS? What are the allegations of false or
misleading statements and how will it be necessary to deal with them and
can I deal with them in a CARS assessment?
4. For each of the identified issues deal with them as follows:
a. The [Applicant’s] Claimant’s/Insurer’s submissions – summarise the
submissions from the party making the application in point form
b. The [Respondent’s] Insurer’s/Claimant’s submissions – summarise
the submissions from the party responding to the application in
point form
c. Decide each issue by answering the question you have posed.
5. Conclude your reasons, with your recommendation as to whether you
have formed the view the claim is, or is not suitable for assessment.
Issued 1 July 2014 Chapter 6 6 - 22
Remember the purpose of your written decision is to both explain to the parties
why you do or do not recommend exemption and if you do recommend
exemption your decision is used by the PCA as a guide when reviewing the file
and in deciding whether or not to approve your recommendation.
6.4.4 The PCA’s approval
Once an Assessor makes a recommendation that a claim is not suitable, the
Assessor must return the file to CARS, the case manager collates the file, drafts
a certificate and brings the file with the recommendation and draft certificate to
the PCA. The PCA reviews all documents and the file. Justice Hoeben in the
Young case (Zurich Australian Insurance Ltd v MAA [2006] NSWSC 845) said
this at [39]
39 The claims assessor’s discretion under s92(1)(b) is broad with no express fetter and is capable of being exercised at his or her own instigation. The fact that the decision requires “the approval” of the PCA reflects the intention of the Act that the primary means of assessment and resolution of disputed claims (excepting prescribed categories of cases) is the claims assessment system in Part 4.4. Absent the criteria prescribed under s92(1)(a) it is for the claims assessor with the concurrence of the PCA to determine what is not capable of resolution within that system.
Later at [52] Justice Hoeben indicated that both the Assessor (when making the
recommendation) and the PCA (when deciding whether to approve or not the
recommendation) must have regard to the matters listed in cl 14.16. Each has to
make an independent and separate decision.
Justice Campbell in Banos made these observations at [44]:
I would wish to add that one should not overlook that the Principal Claims Assessor is required to approve a claims assessor's decision to exempt a claim as not suitable. One would not envisage that approval would be too readily withheld. It is not necessary to consider the scope of this power or factors relevant to its exercise here but principle suggests that mere difference of opinion would be an insufficient basis for the refusal of approval. But the requirement of approval may be an important check on discretionary exemptions themselves being too readily granted. As I have said claims assessors have a duty to assess claims allocated to them.
Issued 1 July 2014 Chapter 6 6 - 23
In the matter of IAL t/as NRMA re El-Hosni [2010] NSWSC 478, The Assessor
had made recommendations that a claim was not suitable for assessment, on the
basis that false and misleading statements had been made. The Insurer had
video surveillance and witness statements to contradict claims made by the
Claimant about the nature and extent of his injuries. The PCA did not accept the
recommendations of the Claims Assessor, re-allocated the claim to another
assessor who assessed the claim at a little over $20,000.00.
The PCA had written in her decision this:
I refer to the Additional Preliminary Conference Report from Assessor dated 20 November 2009. I note Assessor has recommended this claim be exempt from assessment by inference because she would have appeared to have formed a view the claim is not suitable for assessment. Her reasons are given as follows:
Although there have been many cases where a CARS Assessor has made adverse credit findings against a Claimant in circumstances not dissimilar to these, it is my view that [this] is a case which would be better handled in a formal court setting where the Claimant’s evidence can be given on oath or affirmation and where the Insurer will have an unfettered right of cross-examination.
I note Clause 16.3 provides that an Assessor shall act with as ‘little formality as the circumstances of the matter permit’ and thus in cases where the reliability of the claimant’s evidence is in issue more formality than less would be appropriate. I also note that Clause 15.4.3 provides that an Assessor may permit the questioning of a witness or party to the assessment-thus whilst not called cross-examination, the insurer would in this case have the opportunity at an Assessment Conference to question the claimant and test the reliability of her evidence. Whilst oaths or affirmations are not administered at CARS, witnesses are required to tell the truth. A claimant can be truthful or not at CARS or in Court or in the claims process and outside either. The reasons given by Assessor Holz do not indicate what the benefit of an oath or affirmation would give to the resolution of this claim.
In the circumstances and particularly bearing in mind Assessor [Holz’s] view that claims not dissimilar to Ms El-Hosni’s have proceeded to assessment at CARS I am not satisfied that this claim is unsuitable for assessment and therefore I do not accept the recommendation that it be exempted.
The Insurer sought to quash the decision of the PCA on the basis that the PCA
had failed to consider the whole of the file, that the PCA had failed to appreciate
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that CARS Assessment procedure means the credit of a claimant cannot fully be
tested at CARS and that she asked herself the wrong question.
The Court (Barr AJ) upheld the PCA’s decision and made some remarks about
the approach taken in this particular claim. This matter was decided before
Tarabay and Banos which have given Assessors (and the PCA alike) guidance
on the approach to be taken when exemption is sought on the basis that false or
misleading statements have been made.
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6.5 Discretionary exemptions - general considerations 6.5.1 Consent of the parties It is a matter for the Assessor, not the parties, to determine whether the claim is
suitable for assessment. The agreement or consent of the parties is a relevant
consideration in the exercise of the Assessor’s discretion whether to recommend
exemption from assessment or not, but it is still the Assessor’s decision.
Care should therefore be taken in the wording of any recommendation made to
the PCA.
Sam
ple
Deci
sion
Preferred wording The Claimant says her claim is not suitable for assessment and should be exempt from assessment. The Insurer supports the claimant’s application for exemption. Having reviewed the material before me and noting the attitude of the parties I am of the view the claim is not suitable for assessment because ...
Wording not preferred The Claimant says and the Insurer agrees that this claim is not suitable for assessment and therefore I find it is exempt from assessment.
6.5.2 The objects of the Act With respect to section 92(1)(b) applications Assessors need to consider the
matters listed in Clause 14.16, the objects of the Act and their own experience.
From the second reading speech of the Motor Accidents Compensation Act,
June 1999 comes this quote about CARS.
Access to the Court is to be retained for decisions on liability, causation or involving non-CTP defendants and as a forum of last resort [emphasis added]. While the majority of matters can be dealt with outside the Court system it is nevertheless recognised that there will be cases which involve difficult legal issues or complex matters of fact for which access to the Courts must be retained.
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Justice Hoeben in the Young case said:
[39] … the intention of the Act that the primary means of assessment resolution of disputed claims (excepting prescribed categories of cases) is the claims assessment system in part 4.4. Absent the criteria prescribed under section 92(1)(a) it is for the claim Assessor with the concurrence of the PCA to determine what is not capable of resolution within that system..
[53] Most claims will be assessed in accordance with part 4.4 of the Act. There will be some claims which are exempt from assessment, but they will be in the minority and be the exception. Lest such exemptions be granted too freely (and thereby defeat the objects and purpose of the Act) strict requirements are imposed before a claim is exempt from assessment. In the case of an exercise of a discretion by an Assessor, that requires the approval of the PCA before a certificate of exemption can issue.
Hoeben J’s decision was followed by his Honour Justice Sully in Allianz Australia
Insurance Limited v MAA (the Lorusso case) [2006] NSWSC 1096.
Justice Spigelman in the Khateib and Kelly cases (Insurance Australia Limited
t/as NRMA Insurance v MAAA and 2 ors; Kelly v MAA and Anor [2007] NSWCA
314) approved Justice Hoeben’s words as follows:
47 As noted above, Justice Rothman referred to and relied upon the observations of Justice Hoeben in Zurich Australia Insurance. The Appellant submitted that Hoeben J was in error when he identified exemptions as being in the minority of cases and that the scheme envisages “the vast majority of cases will be determined by Claims Assessors”. In my opinion, Hoeben J was correct to conclude that such would be the practical effect of the scheme. One of the important objectives of the Act set out in s5(i)(d) and (e) is “to keep premiums affordable”. One of the mechanisms for achieving that objective is to minimise the costs of the dispute resolution process.
6.5.3 The Assessor’s Own Experience
CARS has been operating for over 14 years and many of its Assessors have
been undertaking assessment for 10 years or more. In addition to all the matters
listed in cl 14.16 and the other matters mentioned above, the Assessor is entitled
to bring into account his/her own experience as a CARS Assessor.
Issued 1 July 2014 Chapter 6 6 - 27
Sully J at [43] of the Lorusso case said:
The Assessor was entitled to judge that matter in a practical way that reflected his own practical experience.
Hoeben J at [68] of the Young case remarked that the Assessor could make a
comparison (with other cases assessed by the Assessor):
The Assessor was exercising an administrative discretion which of its nature required a comparative assessment. The assessment itself was preliminary. To assess whether or not something is "complex" of necessity involves a comparison.
Rothman J in the Kelly case said at [46]:
The determination by a Claims Assessor that a claim involves complex legal or factual issues is an evaluative determination, which must necessarily involve a determination of the relative complexity of the legal or factual issues (or any other issue to which the term complex is related) as compared with the norm.
Later at [74], he said:
The Claims Assessor did so, on the basis that it was a matter not outside the realms of cases regularly undertaken. As early stated, the determination of a matter as being complex is an evaluative determination. Absent Wednesbury unreasonableness, a comparison between the case that is before the Assessor and cases that otherwise come before Assessors is an assessment of the range of cases usually dealt with and a not unreasonable basis upon which to determine whether a matter is complex and the complexity is such that it requires a reference to a court.
6.5.4 CARS Assessment Procedure
A relevant consideration for the Claims Assessor to take into account when
determining suitability is the procedure to be adopted in undertaking
assessments at CARS. Justice Spigelman in the Kelly and Khateib matters said
this at [58]:
Chapter 14 is on the subject of “Assessment Procedure” and outlines the steps that are normally taken in an assessment; the principles by which an
Issued 1 July 2014 Chapter 6 6 - 28
assessment ought to be conducted in the course of the assessment conference and the circumstances in which such a conference may not be required. I do not understand how these matters can be regarded as an irrelevant consideration in determining whether a particular claim is or is not “suitable for assessment”. In my opinion, the procedure normally conducted, and the evidence likely to be available in the course of applying that procedure, is a matter that ought be taken into account in determining the statutory issue. Indeed, no ground was pressed in this Court that this was not a relevant consideration.
Justice Campbell in Banos at [44(d)] in the context of an allegation that the
Claimant had made false and misleading statements said this:
… a related question will be which mode of hearing will resolve the dispute more efficiently and effectively, bearing in mind the comparative limitations and advantages of an assessment conference on the one hand, and a court hearing on the other. Advantages of the latter may include a better opportunity for proper and fair cross-examination of witnesses whose credit is to be impugned and the greater availability of cross-examination of medical experts on the material which may call a claimant's reliability into question;
This consideration is perhaps the balancing consideration to the ‘objects’
consideration discussed at 6.5.2 above. Whilst the bulk of claims should be
assessed, it is those claims where a fair hearing could not be afforded (to either
or both parties) within the confines of the CARS process that should be
exempted.
The following important differences should be noted between a CARS
Assessment and a Court hearing particularly when evidence as to credit or the
reliability of a witnesses evidence is concerned:
1. CARS Assessment Conferences, unlike Court hearings, are not open to
the public;
2. CARS Assessments are informal whereas Court hearings are more
formal;
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3. A Judge has certain authority and generally commands respect and
obedience. Claims Assessors are members of a dispute resolution service
which is tribunal-like but not formally called a tribunal. Claims Assessors
are legal practitioners whose role as an assessor is sessional (and not full
or part time).
4. A Judge can require answers to be given under oath or affirmation and
can compel answers to questions against the wishes of witnesses. Judges
can punish by making findings of contempt of court or abuse of process.
Claims Assessors can draw inferences and can recommend action be
taken under s 100 for failure to provide requested documentation or
information.
5. Witnesses in court can be cross-examined at length and as of right
whereas cross examination in CARS is permitted at the discretion of a
claims assessor.
To balance the above is the requirement that CARS take a flexible approach to
the assessment of claims and is not bound by the formality and rigidity of the
adversarial court-based approach to dispute resolution.
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6.6 Discretionary exemptions - specific considerations 6.6.1 Clause 14.16 Clause 14.16 sets out 10 matters (as at 1 May 2014) that an Assessor may
consider when deciding suitability. These are essentially flags or indicators that
prompt an Assessor to ask the question of whether or not a claim is suitable for
assessment. The 10 matters listed are not categories, types or kinds of cases
that have to be exempted. Clause 14.16 simply sets out certain issues that may
indicate that a claim is unsuitable for assessment.
6.6.2 Clause 14.16.1
Whether the claim is exempt under section 92(1)(a) because the claim involves one or more of the circumstances set out in clause 8.11.
This clause facilitates the swift return of files to CARS where an exemptible claim
has been allocated in error. Again care needs to be taken in the wording to
ensure the Claims Assessor does not interfere with the PCA’s decision-making
role.
Sam
ple
Deci
sion
Preferred wording In my view the claim is not suitable for assessment under s 92(1)(b) and considering cl 14.16.1. The claim appears to be an exemptible claim under s 92(1)(a) and cl 8.11.1 (as the claimant is only 10 years of age) and I return the matter to the PCA for her consideration.
Wording not preferred The claim is exempt from assessment under s 92(1)(a) and I return the matter to the PCA for the purposes of issuing a certificate.
6.6.3 Clause 14.16.2 – Heads of Damage
The heads of damage claimed by the Claimant and the extent of any agreement by
the Insurer as to the entitlement to those heads of damage.
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In dealing with submissions under this clause, the Claims Assessor will need to
consider what is claimed, what is agreed and what is disputed.
The difference between the two submissions may be significant. The Insurer may
say the claim is worth $10,000 and the Claimant may submit it is worth
$1,000,000. This alone does not suggest unsuitability as it will depend on what
the issues are that are preventing the parties from resolving the claim.
Size may not matter and size alone should not determine the forum for the claim.
A big claim does not necessarily mean the claim is not suitable and equally a
small claim may be unsuitable for assessment.
All heads of damage may be disputed, but there may be agreement ‘within’ the
heads of damage. For example entitlement to future loss of earnings may be
agreed but the basis for the award (buffer versus calculation) may be in issue.
Another example is that entitlement to past loss of earning is agreed as are past
weekly wage rates but the amount of accident related time off work is disputed.
Readiness is often an issue in these matters as the reason the parties are far
apart is because the application for exemption is made early on in the life of the
claim while investigations are ongoing, documents may be outstanding, the MAS
process may not have finished, medico-legal appointments are yet to take place
and so on. In those situations it may be best to consider deferring determination
of the application for exemption or making it clear in any reasons that ‘On the
information before me, at this point in time I am not of the view the claim is
unsuitable for assessment’.
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6.6.4 Complexity Generally Several of the sub-clauses listed in cl 14.16 use the word complex for example cl
14.15.2 requires consideration of complex ‘legal issues’ or 14.16.3, complex
‘factual issues’. What makes a legal issue complex or a factual issue complex?
Several decisions from the Supreme Court have shed light on this question.
In the Lorusso case, Justice Sully said:
[44] I do not see it as being necessary to become entangled in over-refined technical debating points about what does and does not, or might or might not, satisfy the description “complex” in the relevant context. I prefer, with respect, the approach of Laing J in Minister of National Revenue v Farm World Equipment Ltd (1996) 142 Sask R 194 (QB). In that case his Lordship had to consider a statutory reference to “the complex nature of the investigation”. His Lordship said:
“Webster’s Third New International Dictionary has a number of definitions of the word ‘complex’. The one...that I conclude is most in keeping with what the drafter of s 490 of the Criminal Code intended is: ‘having many varied interrelated parts, patterns, or elements and consequently hard to understand fully...marked by an involvement of many parts, aspects, details, notions and necessitating earnest study or examination to understand or cope with.’...On the material before me I am not satisfied that the investigation being conducted by the Department in this matter is of a complex nature. The scope of the investigation and the alleged offences were identified at the time the search warrant was obtained. The investigation involves reviewing the records of one business and two individuals, and comparing these records to the records of suppliers to the business and customers of the business. The investigation involves substantial ‘grunt’ work, but there is no allegation that the material is difficult to understand...”(at p 197, paras 13-14).”
[45] I apprehend the assessor’s approach to have been in substance the same.
Justice Rothman in Graham Kelly v MAA & Anor [2006] NSWSC 1444 said:
[45] The word 'complex' is, in this context, an ordinary English word and should be given its ordinary meaning. While it may have, once, strictly referred to something which consists of or comprehends various interconnected parts (and is used in a technical sense in psychology and chemistry with meanings derived from that origin) it is now more often used to mean 'complicated, involved, intricate, not easily analysed or disentangled'. That is one of the definitions given to it by the Oxford Dictionary and is a meaning consistent with that given to it by the Macquarie Dictionary. The Macquarie Dictionary defines 'complex' as
Issued 1 July 2014 Chapter 6 6 - 33
'1. Composed of interconnected parts; compound; composite.
2. Characterised by an involved combination of parts.
3. Complicated; intricate.'
The same dictionary defines 'complicated' as
'1. Composed of interconnected parts; not simple; complex.
2. Consisting of many parts not easily separable; difficult to analyse, understand, explain etc.'
Justice Rothman’s findings on this matter were not apparently the subject of
argument in the Court of Appeal and the Court of Appeal ([2007] NSWCA at 45)
did not deal with the question of what is and what is not complex other than to
note at [45] that this was a matter for the discretion of the Assessor and the
merits of an Assessor’s decision are not to be tested on an application for judicial
review.
In the context of clause 14.16 of the Guidelines then, the word complex appears
to be used in the sense of 'complicated', 'not simple', 'difficult to analyse,
understand, explain'.
6.6.5 Clause 14.16.3 – Complex Legal Issues
Whether the claim involves complex legal issues.
Many claims do not involve complex legal issues as there is no issue of liability
(fault or causation) and the matter proceeds for a relatively straightforward
assessment of damages under various heads with little or no need to reference
legal principles. Some claims however involve ‘legal issues’ such as the
interpretation of a section in the Act, or the application of case law precedents to
Issued 1 July 2014 Chapter 6 6 - 34
the facts of the assessment before the Assessor. Whether those legal issues are
complex or not is a matter for the Assessor.
If a section in the Act has not been dealt with by a Court or a Claims Assessor
this may not necessarily make the claim complex. Consider the legal issue itself
and ask - can the Assessor deal with it?
If the law is not settled in respect of a particular area of the claim and for example
there are two conflicting Court decisions, that might be an indicator that the
matter is not suitable.
A claimant injured in an interstate accident may have a right (under the
‘substantive’ motor accident legislation in the state where they were injured) to
claim compensation or commence proceedings to recover damages. As it is not
certain whether the CARS legislative provisions in the Motor Accidents
Compensation Act are ‘procedural’ or ‘substantive’ it is not clear whether a
certificate of assessment can be issued in respect of interstate accident claims.
However as Claims Assessors are not expert in the motor accident schemes of
other states, these claims are generally not suitable for assessment on the basis
they involve ‘complex’ legal issues.
Arguments about suitability are often run under this ground when a party says
that he/she/it was not afforded procedural fairness during the MAS process and
there would be substantial injustice if the certificate was to stand. The party
wishes to move the Court to reject the certificate under s 61(4) of the Act. CARS
has no power to set aside a certificate under this section. Considerations for the
Claims Assessor in dealing with an application made on this basis would include:
- Who has allegedly not afforded procedural fairness, a MAS
Assessor, The Proper Officer, Review Panel – if no one is identified
what is the allegation of procedural fairness?
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- Are there arguable grounds for a breach of procedural fairness? In
the absence of particulars what is the veracity of the complaint?
- Should the Claims Assessor consider referring the claim back for
further assessment under s 62(1)(b) if the breach of procedural
fairness appears clear? Note of course the case of Darke v El
Debal, [2006] NSWCA 86 the Court of Appeal said procedural
fairness is a matter of process not outcome:
… a person with authority to decide a matter does not deny procedural fairness simply because he or she rejects the propositions advanced by those who seek the decision. Those parties are entitled to have the opportunity to place relevant information and arguments before the decision-maker, which is very different from saying they have a right to a favourable decision. Procedural fairness is concerned with process, not outcomes … Senior Counsel is also correct in submitting that there is a huge gap between the self-diagnosis of a lay patient interested in an outcome and the complex medical inquiry required for the purpose of a whole person impairment assessment in accordance with the statutory guidelines. The Act does not permit merits review of a certificate by the court and it precludes judicial review on grounds other than denial of procedural fairness. A party seeking review on the merits should invoke sections 62 and/or 63.
The Court can only reject a MAS assessment under s 61(4) for
breach of procedural fairness and
if there is substantial injustice. Is
there substantial injustice – in other words if the Court does set
aside the certificate, what would it substitute? For example MAS
has found 5% and all of material relied upon by both parties also
suggests impairment is 10% or less. As there is no evidence, the
court may not substitute a finding of greater than 10% so there
would appear to be no substantial injustice – see Yacoub v Nguon
[DCJ Gibb 2770 of 2003], unreported 29 April 2005.
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6.6.6 Clause 14.16.4 – Complex Factual Issues
Whether the claim involves complex factual issues.
All assessments require Claims Assessors to resolve disputed factual issues and
make findings of fact documented in the statement of reasons. Whether a factual
issue or issues are so complex that they cannot be determined within the
confines of CARS is a matter for the Claims Assessor.
• One indicia of complexity might be the number (and type) of witnesses
required to resolve the disputed factual issue. Remember however that
the number of witnesses is a matter for the Assessor to decide not the
parties. See Aluminium Louvres & Ceilings Pty Limited v Xue Qin
Zheng [2006] NSWCA 34. Have statements been taken from the
witnesses? How can you evaluate whether there evidence is required
without them? What will their oral evidence add to the claim?
• An application may be made on the basis a party (usually the Insurer)
wishes to issue one or more subpoenas and therefore needs an
exemption to commence court proceedings in order to issue the
subpoenas. Some considerations may include:
- Are these documents relevant and necessary? Sometimes the
Assessor has to make a value call i.e. is there enough information
to undertake a proper assessment of the claim without the
documents?
- What steps have been taken to obtain the documents without a
subpoena? Have all steps been taken? Would a s 100 direction
assist. Can the Claimant get the records under the Government
Information (Public Access) Act? Consider the paper by Terrence
Stern, Obtaining Access to Medical Records, reproduced in the
MAAS Bulletin June 2007 Volume 7 Number 2.
- Can the documents be obtained from another source?
- Is the Claimant prepared to obtain them with an authority?
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- Is the party simply engaging in a fishing expedition? In the
judgment of Master Malpass in Bellamy v Bennett [1999] NSWCA
912, Master Malpass stated the following:
It is abundantly clear that the defendant is not in fact seeking an order
for particulars of any matter pleaded in the Statement of Claim or for
particulars of any claim for damages made by the plaintiff provided
information (the names and addresses of doctors who treated her
during the five years prior to the date of the accident) which it is hoped
may throw up something of use in the defending of her claim. It is
largely in the nature of a fishing expedition. The function of particulars
is well established by authority. The defendant’s request falls well
outside the scope of that function. It may be added that the request
was not even limited to matters in issue (such as treatment relevant to
the injuries particularized in the Statement of Claim)'.
- Would the subpoena achieve the result? For example some
Federal Government departments such as the Taxation
Department and Centrelink are protected by statute from having to
produce documents.
• Claims are frequently exempted under this section where there is a
related claim that has been exempted and the claim before the
Assessor needs to be heard with the other claim. Some examples are
set out below:
- A compensation to relatives claim has been exempted because two
of the three dependants of the deceased are children. There is a
claim for loss of services in that matter. The nervous shock claim by
the surviving parent includes a claim for care under s 128/141B and
services under s 15B of the Civil Liability Act.
- A claim is made by a female person in respect of motor accident A
and fault is denied. That claim has been exempted. Her spouse
makes a claim in respect of a completely different motor accident B
and liability is admitted. Both claims involve claims for care and
assistance under s 128/141B.
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- A claim by a passenger in motor vehicle A has been exempted
because the Insurer of vehicle A has denied fault. The claim by the
passenger against the driver of vehicle B needs to be exempted in
order that the issue of who was at fault can be determined.
6.6.7 Clause 14.16.5 – Complex Issues of Quantum
Whether the claim involves complex issues of quantum or complex issues in the
assessment of the amount of the claim including but not limited to major or catastrophic,
spinal or brain injury claims.
It is trite to say it but all claims that proceed to assessment at CARS must have
some issues in relation to quantum otherwise the claim would have settled. What
is complex is a matter for the Assessor. The clause suggests major or
catastrophic spinal or brain injury claims may be complex however this clause
came into effect before the Lifetime Care and Support scheme. As a result of that
scheme, catastrophic injury cases are arguably less complex as treatment and
care needs do not now need to be the subject of the CARS assessment.
Assessors should consider the following when faced with an argument that a
matter involves complex issues of quantum.
• Size is not the determiner. Just because a claim is large or small does
not necessarily mean it is complex or not complex.
• Complexities might surround the calculation of future loss of earnings
for example loss of profits in the Claimant’s own business. In which
case the Assessor may consider the following – is there an
accountant’s report? Will there be one? Are the books and records of
the business available? Does the other party have an accountant’s
report or does the other party intend to obtain one?
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• Complexities might arise if the Claimant was not declaring his true
earnings (for example the Claimant was being paid for work in cash)
however the case law in this area is settled.
6.6.8 Clause 14.16.6 – Non- Economic Loss
Whether the Claimant has been medically assessed and is entitled to non-economic
loss pursuant to section 131 and the claim involves other issues of complexity.
The assessment of non-economic loss is not generally a complex issue on its
own and Claims Assessors, most of whom are coal face practitioners are able to
determine the amount of damages for non-economic loss. This clause requires
not just an entitlement to non-economic loss, but other complexities.
6.6.9 Clause 14.16.7 – Issues of liability Whether the claim involves issues of liability including issues of contributory
negligence, fault and/or causation.
The previous version of this clause was one of the most common grounds relied
on for exemption under s 92(1)(b) and the reason for most claims being exempt
from assessment. It should be noted that the current version of this clause does
not require complexity.
A primary consideration to take into account is, if liability is in issue both parties
have the right under s 95 to reject the assessment. While this might lead to
arguments of futility (why bother undertaking an assessment when the matter
can be heard elsewhere) this needs to be balanced by the aim of CARS which is
to provide a just, quick and cost effective assessment of what the Court is likely
to award. Rather than replicate a Court-like hearing at CARS, a quick and simple
Issued 1 July 2014 Chapter 6 6 - 40
assessment on the evidence of the Claimant, written statements and expert
reports might give the parties an indication of what they can expect at Court and
may lead to the settlement of the claim without the necessity for court
proceedings. Note that s 94(1) gives CARS power to determine issues of liability,
where liability has not been accepted by the Insurer. Why has CARS been gives
this power if not to exercise it in appropriate cases.
Allegations of contributory negligence
What is the percentage contributory negligence alleged? What is the nature of
the allegation of contributory negligence? Can the assessor undertake that
assessment at CARS? Consider the difference between an allegation of failure to
wear a seat belt where the Claimant and his fellow passenger are available to
give evidence and there are relevant medical reports compared to an allegation
of the pedestrian’s failure to keep a proper lookout where there is the evidence of
the Claimant, two lay witnesses, the driver of the insured vehicle and a traffic
reconstruction expert;
Denials of liability
Liability may be denied for many reasons. If liability is denied because fault is
denied a mandatory exemption should be granted under s 92(1)(a) and cl 8.11.1.
If liability is denied for other reasons CARS may still be able to undertake an
assessment. Note s 94(1)(a) empowers a Claims Assessor to determine liability
for a claim in circumstances where liability is not accepted. Examples of denials
of liability for reasons other than fault include:
- Blameless accident – the accident is not a blameless accident
within the meaning of s 7A, or the claimant is the driver of the only
vehicle involved in the accident and is prevented from recovering
damages under s 7E;
- The accident is not a motor accident within the meaning of s 3,
such as a loading/unloading case;
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- Uninsured motor vehicle – and the Insurer alleges the vehicle was
not registerable or the accident did not occur on a road or road
related area;
- Unidentified vehicle – the Insurer alleges no search and enquiry
has been undertaken;
- Mental harm / nervous shock claim – the Insurer alleges the
claimant has not sustained a recognizable psychiatric illness or is
otherwise not entitled to make a claim; and
- Late claims or other procedural defects in the claim.
Whether a claim where liability is wholly denied is suitable or not for assessment
will depend on the factual circumstances of the claim.
Deemed denial of liability
A deemed denial of liability does not automatically mean that the claim is not
suitable for assessment. A CARS Assessor can make an assessment of the
issue of liability for the claim unless the Insurer has accepted liability (see
s 94(1)(a)). An assessment of liability could be undertaken before quantum is
assessed.
If liability is deemed or taken to be denied by operation of s 81(3) because the
Insurer has not written to the Claimant and advised whether liability is admitted or
denied.
- Has more than three months passed since the claim form was
received?
- Has the Insurer issued a section 81 notice? Does that notice deny
or admit liability?
- Why is the Insurer unable to make a decision on liability? Are they
waiting on information or documentation? What is the time frame?
- A deemed denial of liability does not automatically mean that the
claim is not suitable for assessment.
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- A CARS Assessor can make an assessment of the issue of liability
for the claim (unless the Insurer has accepted liability)(section
94(1)(a)).
Causation
Causation of damage is one of the elements of the tort of negligence. Fault may
be admitted but causation of one or more of the Claimant’s injuries as a result of
that fault may be denied. If a party relies on this clause the Assessor needs to
make a preliminary enquiry as to what injuries are alleged by the Claimant and
what injuries are denied by the Insurer and then consider:
- If the Claimant has sustained 10 injuries and only one of them is
denied, what is the issue regarding the one denied injury?
- Is there medical evidence about the denied injuries? Has the
Claimant been to MAS?
- A claim by a person who has a prior condition or has been involved
in one or more other accidents may or may not be suitable for
assessment, it will depend on the nature of the condition, the effect
of the accident on the condition (or vice versa), the availability of
medical and other evidence and so on.
- A claim by a person who has a prior or subsequent accident (motor
vehicle or not) may or may not be suitable for assessment.
Assessors should consider whether injuries overlap and whether
there are other Court proceedings on foot.
- Assessors may consider whether apportionment of injuries,
disabilities and losses can be undertaken – how have MAS
Assessors or medico-legal practitioners fared?
- Are there available records that would enable the Assessor and the
parties to make a proper assessment of damages?
- Have records regarding previous or subsequent conditions or
accidents been sought and obtained? Can the records be
obtained?
Issued 1 July 2014 Chapter 6 6 - 43
- If a party makes an application on the basis that ‘we need to issue
subpoenas’ consider what efforts have been made to obtain those
records without a subpoena and whether those documents are
strictly necessary.
Multiple accidents
It might be argued that the Claimant has been involved in multiple accidents and
the parties are unable to distinguish which injury or disability or loss was caused
by which accident. Considerations include:
- Are there current MAC Act claims for those other accidents?
- If yes, have applications for general assessment been lodged? Is
there any reason why the CARS Assessor couldn’t determine all
claims at the same time?
- Have any other claims been exempted?
- Have proceedings been commenced in Court? If so, what stage
have they reached?
- Has MAS or medico-legal specialists been able to determine
apportionment? If so that may suggest there is not that much
complexity.
6.6.10 Clause 14.16.9 – Claimant or Witness Outside the Jurisdiction Whether the Claimant or a witness, considered by the Assessor to be a material
witness, resides outside the New South Wales.
There is no rule forbidding a Claims Assessor from travelling interstate to
conduct an assessment and assessments have to date been conducted in the
Australian Capital Territory, South Australia, Victoria and Queensland.
Permission must be obtained from the PCA to undertake any assessments
outside New South Wales and the PCA must herself seek permission to travel
interstate.
Issued 1 July 2014 Chapter 6 6 - 44
The first thing for an Assessor consider is who is the person residing outside
New South Wales, what is the nature of the evidence they are going to give and
how can that evidence be taken. Other matters to then consider would include:
• How material is the witness (there will usually not be an argument that
the Claimant is material)? Can they submit a statement? Does the
Assessor need to hear from him/her?
• Where does the Claimant / the material witness reside? Can the
Claimant / material witness travel to NSW?
• If the Claimant /material witness is outside NSW and cannot travel to
NSW, can the claim be assessed on the papers including statements?
Identify the gaps in the evidence that is to be filled by the ‘oral’
evidence from the Claimant or material witness can a supplementary
statement be provided to fill in the gaps.
• Video-conferencing, Skype and teleconferencing are available and
have been used by CARS even when the Claimant is in a completely
different time zone on the opposite side of the world.
6.6.11 Clause 16.14.10 – Claim against Non-CTP Parties
Whether the Claimant or Insurer seeks to proceed against one or more non-CTP
parties.
In considering this ground, the Assessor needs to consider the identity of the
non-CTP party and the nature of the claim made against it. Examples of claims
where this ground has been argued:
Workers Compensation Recovery Proceedings
There is or will be a recovery action by the Workers Compensation Insurer
against the CTP Insurer. Considerations include:
Issued 1 July 2014 Chapter 6 6 - 45
• Is a workers compensation recovery action on foot? If so what stage
has it reached?
• What does the defence (filed by the CTP insurer) say?
• Why is it necessary to hear both the CTP claim and the recovery
action together?
• In general it may be possible to proceed with the general assessment
and allow the parties to have the recovery action dealt with in Court
afterwards.
Negligent treatment - novus actus
A CTP insurer might allege that the Claimant’s treatment following the motor
vehicle accident was so bad that it breaks the chain of causation. Considerations
include:
• What is the nature of the allegation of the negligence treatment?
• Has the allegedly negligent treating doctor been put on notice of the
potential claim and have any proceedings been commenced in relation
to that claim?
• Is it a question of contribution – could the claim be assessed at CARS
leaving the question of contribution to be litigated?
Remember you are not deciding at an interlocutory stage whether there has been
a novus actus or not, you are simply deciding whether, in the light of the
allegation, the claim is or is not suitable for assessment.
Owners and / or driver
There is no specific provision for the separate representation of Insurers and
their ‘insured’. If a claim is made against the Nominal Defendant in respect of an
uninsured vehicle, the Nominal Defendant can take action to recover the
damages paid from the owner or driver of the vehicle. Proceedings are
sometimes commenced and the recovery action ‘joined’ by way of a cross-claim
to the original proceedings by the Claimant so that all issues about the claim are
Issued 1 July 2014 Chapter 6 6 - 46
dealt with at the same time. If a false or misleading claim is alleged and
proceedings are commenced, the Insurer and the insured are usually joined as
defendants.
6.6.12 Clause 14.16.11 – Allegation of False or Misleading Claim
Whether the Insurer makes an allegation that a person has made a false or misleading
statement in a material particular in relation to the injuries, loss or damage sustained
by the Claimant in the accident giving rise to the claim.
(Note if an insurer makes an allegation of ‘fraud’ in terms of the circumstances of the accident, the matter will be exempt under s 92(1)(a) and cl 8.11.6. If an insurer makes an allegation that a person has made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant in the accident, the insure may be required to provide particulars in writing of the general nature of any such allegation under cl 17.13 and an assessor may then consider whether a matter is not suitable for assessment under cl 4.11 to 14.16, particularly in the light of cl 14.16.11)
If the allegation made by the Insurer is that the accident did not happen, that the
accident was staged or for example that the Claimant was the driver of the
vehicle at fault and not the passenger as alleged, the matter may be exempted
under section 92(1)(a). Claims like this require the examination and cross
examination of witnesses under oath and are more likely to involve experts and a
timeframe beyond that of a CARS assessment.
A matter that frequently arises is where the allegation of false or misleading
statement is that of a false or misleading statement made against a non-CTP
entity. If the allegation is that the Claimant has made a false or misleading
statement in respect of an application made to Centrelink to obtain benefits then
that may not necessarily be a statement caught by this clause and that may not,
if it was the only ground raised, give rise to a finding that the claim was not
suitable for assessment. It would of course depend on the statement that was
made. If for example it was a statement relating to the marital status of the
Claimant in order to obtain a single parent payment that may be unrelated to the
accident. If of course the statement relates to the awarding of a disability support
Issued 1 July 2014 Chapter 6 6 - 47
payment because of accident related injuries, that statement may be caught by
this clause. However this might give rise to arguments about the complexity of
the case generally and other considerations under Clause 14.16 that the
Assessor would need to deal with.
Some helpful guidance on the approach to applications for exemption on the
grounds false and misleading statements have been made was provided by
Justice Campbell in the Banos case at [43]:
When deciding the statutory question in a case that turns upon whether a person has made a false and misleading statement, the following considerations are likely to be relevant. I do not mean to be exhaustive:
(a) the Act contemplates that the great majority of disputes will be resolved by the assessment process, and not in court;
(b) however, the consideration that s.92 provides for both mandatory exemptions and discretionary exemptions provides a clear legislative guidepost that appropriate cases should be "redirected" to the court system at an early time by way of preliminary determination;
(c) a primary question will be, having regard to the nature of the issue raised, whether both parties can be afforded a hearing (assessment conference) which is in a practical sense fair having regard to the nature of the allegation raised;
(d) a related question will be which mode of hearing will resolve the dispute more efficiently and effectively, bearing in mind the comparative limitations and advantages of an assessment conference on the one hand, and a court hearing on the other. Advantages of the latter may include a better opportunity for proper and fair cross-examination of witnesses whose credit is to be impugned and the greater availability of cross-examination of medical experts on the material which may call a claimant's reliability into question;
(e) as it is clear the claimant's credit will be called into question, a consideration of whether it is in the public interest that such an examination occur in open court;
(f) Finally, but by no means least, the consideration that it is not mandatory, whenever a credit issue is raised, to decide that the claim is not suitable for assessment under Part 4.4.
Where the Claimant has allegedly failed to detail other injuries, accidents or
disabilities in deciding whether the claim is suitable or not, as suggested by
Justice Campbell, the primary question is whether the Assessor can undertake
Issued 1 July 2014 Chapter 6 6 - 48
an assessment that is fair to both parties. In terms of fairness to the Insurer does
the Insurer have particulars of the other injuries? Has the Insurer got or can it
obtain whilst at CARS medical reports that deal with the other injuries, accidents
or disabilities. Does it have access or can it gain access to insurance company
claim files, records from the Claimant’s treating doctors and so on? In terms of
fairness to the Claimant, can the Claimant give evidence about the allegations
made and provide an explanation in answer to it.
There are degrees of ‘falsity’ or seriousness of allegations. At the one end you
might have a Claimant who is simply exaggerating his claim for example by
listing a multitude of disabilities arising from relatively straightforward injuries and
on the other end you may have a Claimant who has alleged sustaining a broken
arm in the motor vehicle accident when there is evidence (such as hospital
records) that the arm was broken in a fight at a pub the night before. As Justice
Rothman in Tarabay said at [58] in the context of two separate allegations in
respect of documents supporting a claim for past and future loss of earnings:
There is a significant difference between inconsistent evidence of earnings and evidence of potential forgery. The only conclusive means of determining the forgery, and its source, is by compelling production, compelling answers under oath, and cross-examination of Mr Tarabay and third parties. That course is impossible in an assessment.
Whether a claim should be exempted or not would reasonably depend on where
on the scale of ‘falsity’ the allegations in a claim lie. To do that an Assessor
should seek a response from the Claimant. While not making any findings as to
whether or not there have been false or misleading statements made, any
explanation would be relevant to the exercise of the Assessor’s discretion. For
example what if Mr Tarabay had made enquiries with his employer and his
employer had indicated it was they who had made a mistake on the PAYG
statement?
Note the cases of Banos and Tarabay make it clear that during the course of an
‘interlocutory’ argument about whether a claim is suitable or not for assessment
Issued 1 July 2014 Chapter 6 6 - 49
the Assessor should not make findings of whether there is a false or misleading
statement. That is a matter for determination at the conclusion of the assessment
if there is one. The issue for the Assessor is whether, bearing in mind the
allegation, the claim is suitable for assessment.
Issued 1 July 2014 Chapter 6 6 - 50
6.7 Procedural Issues with discretionary exemptions
6.7.1 Claim found suitable – dismiss or defer If the Assessor is of the view that the claim is suitable for assessment and that
the Assessor can assess the claim there is no need to make recommendations to
the PCA or send the file back to CARS. The Assessor should document the
decision in the preliminary conference report or in the document entitled
“Procedural decision made during the course of an assessment” with brief
reasons and provide a copy of the PC report to the parties and CARS.
If the claim is otherwise ready for assessment, the Claims Assessor should defer
the assessment, make appropriate directions and / or set the matter down for an
assessment conference hearing. The Claims Assessor holds onto the file until
such time as the assessment has been completed.
If the only issue that was referred to CARS was the issue of suitability and limited
documentation was provided to the Assessor (that is only documentation relevant
to the issue of the application for exemption and not the ‘usual’ schedules,
submissions and evidence in relation to the claim generally) then once the issue
of suitability has been determined the Claims Assessor can dismiss the
application and return the file to CARS.
Matters for the Assessor to consider when deciding whether to defer the
assessment of the claim or dismiss the application for exemption from
assessment include:
• When was the accident and how old is the claim? If the accident is more
than three years ago the Claimant may run into issues with the limitation
period under s 109. If the accident was only a year ago the application
could be dismissed and the parties can return to CARS when the claim is
ready for assessment;
Issued 1 July 2014 Chapter 6 6 - 51
• How ready the claim is for assessment? How long will it be before the
claim can be made ready for assessment? Have any medical disputes
been referred to MAS? Have the parties obtained all the relevant medical
evidence?
If the application is to be dismissed the Assessor should end the reasons with a
sentence such as:
Having determined that the claim is suitable for assessment, I dismiss [the applicant’s] application for exemption and will return the file to CARS in order that CARS may close the file.
If the application is not going to be dismissed and the claim is not yet ready to be
assessed, the Assessor should consider making directions and keeping the
matter on a tight case management timeframe.
The Assessor should of course and in particular before deciding to dismiss the
application, seek input from the parties.
6.7.2 Special assessments and suitability applications
The Claims Assessor may be allocated for assessment both the claim (via a
CARS form 2A application for general assessment) and a dispute that has arisen
in connection with the claim (via a CARS form 5A application for special
assessment).
Which should be dealt with first? It is a little like the chicken and the egg
argument. Resolving the special assessment in respect of a late claim dispute
may lead to the resolution of the whole claim when exempting the claim may
force the parties through legal proceedings. Resolving the special assessment in
a complex matter may achieve nothing if the claim is not suitable in the long run.
Resolving the special assessment in say a late claim which your preliminary
assessment suggests is going to fail may enable the claim to be exempted under
the Gudelj principles.
Issued 1 July 2014 Chapter 6 6 - 52
Whether there is a dispute such as a late claim dispute is a relevant
consideration to the exemption of the claim in the first place. A straightforward
late claim may be suitable for assessment at CARS whereas a late claim with a
complex issue of causation and a substantial issue about contributory negligence
may not be suitable for assessment.
The Claims Assessor should familiarise him or herself with both applications in
order to determine the best and most cost-effective way forward.
6.7.3 Mandatory exemptions and suitability applications
If one of the parties has lodged both a mandatory and discretionary application
ordinarily the mandatory application will have been dealt with by the PCA and
CARS first. The PCA will liaise with the Claims Assessor over who should make
their decision first.
Care should be taken with the wording of any recommendation to the PCA
regarding suitability particularly any reference to the application for mandatory
exemption. Assessors should ensure that the parties are not making an attempt
to ‘appeal’ the PCA’s decision by way of the discretionary exemption.
6.7.4 Multiple applications (McKosker)
An application for discretionary exemption should ideally only occur once in the
life of a claim however claims change as more information is provided and a
claim that was once found suitable for assessment may become unsuitable for
example if evidence comes to light suggesting false or misleading statements
have been made.
An application made early in the life of the assessment may be deferred until late
in the life of the assessment in order that some of the matters raised by the
parties can be addressed. For example a claim that is the subject of an
application for exemption on the basis that there is a complex issue of quantum
Issued 1 July 2014 Chapter 6 6 - 53
and an issue of causation might be deferred pending a MAS assessment and the
return of documents in answer to a s 100(1A) direction.
Each application should be considered on its own merits but Claims Assessors
should be aware of the decision of Just Hulme in the McCosker case. Multiple
applications can be made and there is no need to revisit each and every
submission made on each occasion. The Assessor in that claim had, in the third
application for exemption approached the matter on the basis of whether the
allegedly additional fresh evidence provided by the Insurer altered his views on
the suitability of the claim for assessment.
Issued 1 July 2014 Chapter 6 6 - 54
6.8 Case law 6.8.1 Allianz Australia Insurance Limited v MAA [2006] NSWCS 1096
The Lorsusso case – lack of legal capacity
In the case of Lorusso, the Insurer made an application for exemption to the PCA
under section 92(1)(a) of the Act and clause 7.1.3 of the Guidelines [the current
equivalent section is 8.11.3] on the basis that Mr Lorusso (the Claimant) lacked
legal capacity. Although the Insurer lodged the application the Insurer in
submissions in support of the application stated that it 'does not assert that the
Claimant lacks legal capacity, its position is to the contrary'. The Insurer
submitted that 'The Claimant has served medical evidence which may cause the
Principal Claims Assessor to be satisfied that the Claimant lacks legal capacity'.
Mr Lorusso submitted that the PCA should dismiss the application as she was
not empowered to undertake an assessment absent the appropriate form. The
PCA was of the view that under section 93 (the allocation provision) she did have
power to consider the application in the absence of a properly completed form or
in the absence of an assertion by either party that the Claimant lacks legal
capacity. As the issue of capacity had been raised she determined she must
consider it.
Mr Lorusso asserted that he had legal capacity and that he simply required
assistance to manage any large sum of money he receives by way of damages
for his claim. The PCA noted that legal capacity was not defined in the Act or the
Guidelines but that it was reasonable to approach the dispute on the basis that a
Claimant lacked legal capacity if he or she were a person under a legal
incapacity within the meaning of section 3 of the Civil Procedures Act. There was
no dispute that the Claimant did not fall within subsections (a) to (d) of that
section but was Mr Lorusso an 'in-communicate person'?
The PCA found on the basis of the medical evidence and in the absence of any
specific assertion from either party that she could not be satisfied as to the
Claimant’s incapacity and did not exempt the claim.
Issued 1 July 2014 Chapter 6 6 - 55
6.8.2 Nominal Defendant v Gabriel [2007] NSWCA 52 The Gabriel case - Insurer withdraws admission
In the Gabriel case, the Court of Appeal determined that an Insurer can file a
defence denying liability in Court proceedings even though that Insurer admitted
liability in a section 81 Notice.
The decision in Gabriel raises the issue of whether an Insurer is permitted to
withdraw an admission of liability within the CARS system.
If the Assessor is faced with an Insurer withdrawing an admission of liability and
also seeking an exemption the Assessor needs to firstly ascertain the basis of
the exemption. Is the application being made under section 92(1)(a) or (b)?
If the application is being made under section 92(1)(a) arguably the Assessor
does not have the power to deal with the application and it must be referred to
the PCA – see 6.2.1 above.
If the application is made under section 92(1)(b), that is the Insurer or the
Claimant (or both) submit there are complexities involved in this matter resulting
from the withdrawal of admission, the Assessor, if of the opinion the matter is not
suitable, should write his/her recommendations in the PC report and await the
PCA’s approval – or if of the view that the matter was suitable proceed with the
assessment of the claim.
6.8.3 Smalley v MAA [2013] NSWCA 318 Mandatory exemption when deemed denial
In this matter the Court of Appeal was dealing with a claim made late. The
Insurer had not issued a s 81 notice within three months. A special assessment
was lodged and determined in favour of the Claimant. The Insurer issued an
Issued 1 July 2014 Chapter 6 6 - 56
alleged s 81 notice over a year after the claim was made denying liability and
indicating it did not accept the assessment and was not bound by it. The Insurer
then issued a further alleged s 81 notice denying liability but admitting fault. The
Claimant has made an application for mandatory exemption under s 92(1)(a)
after the special assessment and on the basis of the first alleged notice. This was
refused by the PCA. The Claimant made a second application for mandatory
exemption under s 92(1)(a) after the second alleged notice was issued. This was
also refused by the PCA. An application for general assessment was lodged and
a Claims Assessor determined the claim was suitable for assessment. The
summons sought to challenge all three decisions.
The Court of Appeal held that the first decision was wrong and that the claim
should have been exempted at that time. The Court of Appeal held that cl 8.11.1
required the PCA to consider the s 81 notice. The only notice issued at the time
the first decision was made was the ‘deemed’ notice, that is the notice the insurer
was taken to have issued in accordance with s 81(3) and that notice wholly
denied liability (including a denial of fault).
The Court of Appeal also considered what would we required to displace a
deemed denial (an admission of liability in whole or in part) and found that an
admission of breach of duty of care only or an admission of fault was not an
admission of part of a claim and therefore did not displace the deemed denial.
6.8.4 Harrison [2013] NSWSC 1211 Anderson [2013] NSWSC 1186 Admission by conduct
While an Insurer may have denied liability, may have failed to communicate any
decision about liability or may only have admitted fault or breach of duty of care
in a s 81 notice. These two decisions are authority for the proposition that an
insurer may, by its conduct and subsequent correspondence engage s 81(4) and
displace an actual or deemed denial of liability.
6.8.5 Allianz Australia Insurance Limited v Tarabay [2013] NSWSC 141 False or misleading allegations
Issued 1 July 2014 Chapter 6 6 - 57
In this claim the Insurer had made allegations that the Claimant had made false
and misleading statements in connection with his claim. Mr Tarabay had relied
on a PAYG payment summary suggesting he had earned more than he had
earned and the suggestion was he had falsified it. He also relied on other
documents suggesting he had been less than truthful in detailing his employment
history. Allianz made an application for exemption from assessment on the basis
the basis of the allegedly false and misleading statements. The Assessor dealt
with the application before the assessment of the claim proceeded to
assessment. She had before her evidence from the Claimant that he knew
nothing about the PAYG summary other than it came from his employer. The
Assessor said that ‘I am not satisfied that the Claimant or any other person has
made a statement knowing that it is false and misleading in a material particular
in relation to all of the headings pursuant to s 117 of the Act. She also found that
inconsistencies with regards to the claimant’s resume and work history could be
resolved at the Assessment Conference.
Justice Rothman set aside her decision saying at [74]:
As stated above, the Assessor has asked herself the wrong question and taken into account irrelevant material in determining whether fraud was proved instead of whether, given the nature of the allegations and their reasonableness, the matter ought be granted a certificate of exemption. The wrong issue was addressed and irrelevant considerations were considered in addressing it.
In determining an application for exemption, the Assessor should not look to
whether the fraud or falsity is proved or not, the question for the assessor is
whether, in the light of the allegation made by the Insurer, the claim is suitable for
assessment at CARS or not.
6.8.6 Insurance Australia Limited NRMA v Banos [2013] NSWSC 1519 False or misleading allegations
The Insurer made allegations that Ms Banos had made false or misleading
statements in connection with her claim. In her claim form she had certified that
she had not had any previous accident or injuries and had never made a person
Issued 1 July 2014 Chapter 6 6 - 58
injury claim before. The Insurer obtained evidence that the claimant had been
involved in a previous accident which had been referred to CARS for which she
received $79,000.00. She had also fallen at home after the first accident and
before the second. The Insurer argued the claim should be exempt from
assessment at a point in time before the assessment.
The Assessor said amongst other things “Although [she] failed to properly
answer question 35 I do not regard this as a deliberate false or misleading
statement”. Justice Campbell said this at [38]:
As Rothman J pointed out in Tarabay it is erroneous for a claims assessor, called upon to determine the question raised by s.92(1)(b) - that is whether the claim "is not suitable for assessment under" Part 4.4 - to decide for himself or herself in the context of that preliminary assessment whether the impugned statements are in fact false or misleading; whether the histories proffered are accurate; whether the claimant's presentation to doctors, and on other occasions, is consistent with the alleged injuries; whether apparent discrepancies are likely to have an innocent explanation; and whether or not the claimant's account of her injuries and disabilities should be believed.
And at [42]
In a case like the present, where only clause 14.16.11 is invoked, the claims assessor will fall into jurisdictional error if he or she purports to decide whether the claimant, or some other person, has in fact made a false or misleading statement in a material particular in relation to the injuries, loss or damage sustained by the claimant; at least except in the rarest of cases where it is so clear that a person has not
made such a false or misleading statement as to be beyond argument. As Rothman J pointed out, a determination that a person has in fact made a false or misleading statement may only properly be made after what I will refer to as a full hearing on the merits during which the person whose statements are impugned has been given a fair opportunity to meet the allegations …
6.8.7 NRMA v MAA re Khateib; re Kelly [2007] NSWCA 314 The Assessor’s experience is relevant
These two appeals heard together involved decisions by Assessor Patterson and
Assessor Broomfield in two separate claims. The Insurer’s challenges to their
decisions that the claims they were considering were suitable for assessment
Issued 1 July 2014 Chapter 6 6 - 59
were determined in the first instance by Justice Rothman who upheld the
Assessors’ decisions (Khateib [2006] NSWSC 1448 and Kelly [2006] NSWSC
1444). The Court of Appeal did not interfere and during the course of the lead
judgment Justice Spigelman said this:
47 As noted above, Justice Rothman referred to and relied upon the observations of Justice Hoeben in Zurich Australia Insurance. The Appellant submitted that Hoeben J was in error when he identified exemptions as being in the minority of cases and that the scheme envisages “the vast majority of cases will be determined by Claims Assessors”. In my opinion, Hoeben J was correct to conclude that such would be the practical effect of the scheme. One of the important objectives of the Act set out in s5(i)(d) and (e) is “to keep premiums affordable”. One of the mechanisms for achieving that objective is to minimise the costs of the dispute resolution process.
6.8.8 CIC Allianz v Erturk & Ors [2010] NSWSC 302 Section 81 notice issued by mistake
The Insurer had issued a s 81 notice by mistake in Mr Erturk’s claim admitting
liability when it had meant to deny liability and deny fault. This the insurer did in a
‘second’ notice. The Insurer made an application for exemption under s 92(1)(a)
to the PCA and under s 92(1)(b) to Assessor Curtis who had been allocated the
Insurer’s application for general assessment. Justice Simpson said:
21 it may be concluded that the intent of the drafter of the legislation and of the Guidelines was to enable the speedy and non-adversarial resolution of non-complex claims, but to maintain the applicability of the judicial process for those claims deserving of that degree of scrutiny.
Justice Simpson found ‘A certificate [sic notice] admitting liability, once issued is
final for the purposes of the statutory scheme.’ She therefore considered the only
valid notice for the purpose of the CARS process was the first notice which
wholly admitted liability.
Assessor Curtis’ decision that the claim was suitable for assessment was
challenged. The Assessor noted the Insurer’s error, noted that the claim
appeared straightforward and was of the view he had no power to look behind
the s 81 notice and consider the error made by the Insurer and whether the claim
should be exempted. Justice Simpson was somewhat critical of the Insurer which
appears to have focused its attention in the judicial review proceedings on the
PCA’s s 92(1)(a) decision and made limited submissions on the Assessor’s
s 92(1)(b) decision.
Note: While the PCA in a mandatory exemption application cannot look behind
the s 81 notice, there would appear to be nothing stopping an Assessor from
looking at the circumstances of the issuing of the notice in considering all of the
circumstances surrounding the claim in exercising his or her discretion as to
whether the claim (s 81 notice and apparent withdrawal) is suitable or not for
assessment.
6.8.9 AAMI Ltd v Cassidy & 2 Ors [2009] NSWSC 804 Withdrawing s 81 admissions
The Insurer wrote to the Claimant’s solicitors on 29 April 2005 in a s 81 notice,
admitting fault and advising it would pay for s 83 payments. Many payments were
made. On 15 January 2007 the Insurer, now represented by solicitors wrote a
letter informing the Claimant’s solicitor that they had re-examined the file
considered the police report and had now decided they wished to deny liability as
they denied any fault on the part of their insured. The Insurer applied for a
mandatory exemption and failed. The Insurer challenged the PCA’s decision.
Note the pre 2008 version of the Guidelines was in play in this matter – this, in cl
7.1.1 required the PCA to exempt a claim where fault was denied by the insurer
(there was no requirement that it needed to be in a s 81 notice).
Justice Fullerton confirmed there was no provision in s 81 or elsewhere for the
insurer to withdraw or amend an admission (in contrast to s 81(4) which
permitted an insurer to convert a denial into an admission). As this decision
concerned a PCA decision applying an earlier version of the Guidelines it is of
limited application.
Issued 1 July 2014 Chapter 6 6 - 61
6.8.10 QBE v MAA (re White) [2008] NSWSC 434 Withdrawing s 81 notice
Again due to the fact that this Supreme Court decision involves a challenge to
the PCA’s decision applying an earlier version the Guidelines, this decision has
limited application. The original s 81 notice admitted breach of duty of care only
and alleged 20% contributory negligence. QBE sought to increase its allegation
to 40% and a second ‘notice’ was issued. The Court found the PCA need only
consider the ‘first’ notice to look for the allegation that fault was denied.
6.8.11 Insurance Australia Limited v MAA [2013] NSWSC 1439 The McCosker case – multiple applications
In this claim, NRMA had made three applications for exemption during the course
of the assessment. Three times the Claims Assessor rejected the application. It
was the last ‘rejection’ that was challenged in these proceedings. The Assessor’s
reasons were set out in full in the decision [27] of which the most relevant parts
have been extracted:
The insurer bases its application upon fresh evidence in the form of an unsigned letter from the Claimant's former chiropractor. The insurer says that "it is clear from the report ... that the claimant has made a false and misleading statement". The insurer also asks me to reconsider the prior exemption applications, the evidence and submissions made in support of those prior applications, as well as the fresh evidence now before me. The Insurer's solicitor wrote to me on 9 April last asking that I take into account various evidentiary and procedural matters addressed in that letter. The insurer does not say why any of those subsidiary matters would make the claim unsuitable for assessment.
The claimant opposes the application. I received the Claimant's submissions on 17 April 2013. The Claimant's submissions address in detail the Statements which are alleged by the Insurer to be false or misleading. Further evidence is provided in support of the proposition that the claimant has been open and candid about her chiropractic treatment prior to the motor accident. Those are matters that can be tested by the Insurer at the Assessment Conference. However, that is not a matter presently in issue. The only question for me to consider is whether or not I should recommend to the PCA that this matter be exempted. In making that determination, I have to consider whether or not I am satisfied that this matter is not suitable for assessment.
Issued 1 July 2014 Chapter 6 6 - 62
Having considered the fresh evidence and the parties' submissions, there is nothing that causes me to think that this matter is not suitable for assessment. Specifically, there is nothing in the chiropractor's letter that clearly establishes the proposition for which the Insurer contends. I have not reconsidered the submissions and evidence relied upon by the Insurer in support of its previous exemption applications. I repeat the comments I made on 20 February last when refusing the Insurer's second exemption application.
The Insurer took issue with, amongst other things, the failure of the Assessor
consider the previous submissions and documents in support of the previous
applications for exemption. Justice Hulme held the Assessor did not have to, as
what he was doing was e-evaluating suitability in the light of the additional
evidence relied on by the Insurer. The Court confirmed the Assessor had
approached the matter in the correct way by asking himself the question of
whether the claim was suitable for assessment. The Court was somewhat critical
of the alternative argument put forward by the insurer that the decision of the
Assessor was manifestly unreasonable and said this:
[43] The question for the assessor was a relatively straightforward one. Was the claim not suitable for assessment under the Act? The question had to be considered in the context of all matters relevant to the claim, particularly the issues between the parties and the appropriateness and efficacy of assessment as opposed to court determination. The exercise of the assessor's discretionary judgment was confined by the subject matter considered in conjunction with the scope and purpose of the Act. The assessor was specifically required by s 6(2) to exercise the discretion in a manner that best promoted the objects of the Act (set out in s 5) and the object of s 92. The discretion was also confined by the requirement to have regard to certain facts and matters as set out in the Guidelines.
[44] It is clear that there are aspects of the claim by Ms McCosker which complicate its resolution. These were set out at some length in the written outline of the argument for NRMA and developed further in oral submissions. I accept the force of the contention that court determination offers a number of advantages for resolution of these matters. But that does not mean that no reasonable assessor could decide that the matter was not suitable for assessment under the Act. Simply because a claim has some complexity does not mean that exemption follows: Insurance Australia Ltd t/a NRMA Insurance v Motor Accidents Authority of New South Wales at [39].
