Personal Injury Law Update
Published on August 5, 2019 by Joshua Dale
Workers Compensation and Motor Accidents Compensation Law 2019
This paper will deal with current developments and recent updates in the areas of Motor Accident Compensation (Part A) and Workers Compensation (Part B) in New South Wales largely focusing on a summary of major developments in the last 12 months.
Part A – Motor Accident Compensation in New South Wales
In 2019 we approach the two year anniversary of the Motor Accident Injuries Act 2017(NSW) (“the 2017 Act”). As practitioners will be aware the new regime, broadly speaking, brings into play two areas of compensation available to injured people, namely statutory benefits and common law benefits.
A claim for common law benefits cannot be brought until 20 months has passed post-injury. Since inception of the scheme the first claims lodged will reach that 20 month period in or about the month of October 2019 following which the first common law claims for those that are assessed over 10% whole person impairment and those who do not have a minor injury, will be able to make a claim for past and future economic loss and non-economic loss if the 10% whole person impairment threshold is exceeded. No doubt in the coming year we will see further judicial guidance in relation to the operation of the scheme in so far as it relates to common law damages.
To date many practitioners would have come into contact with the scheme largely in relation to the operation of the statutory benefits entitlements under the 2017 Act. This section of the paper is a summary of relevant matters to be aware of in the Scheme and some recent court decisions that may be of interest.
Liability Investigations and Contributory Negligence
Whilst the 2017 Act brings into effect a no fault scheme, the question of liability and contributory negligence remains a live issue in relation to claims.
When an insurer considers liability, it is important to remember clauses 4.41 and 4.421 which requires insurers to provide:
“Reasons for the determination, the nature and source of evidence, and copies of all relevant documents and information considered in the making of the determination, regardless of whether the information or document supports the reasons for the determination”.
In practical terms, this means that insurers, in the first instance, must consider carefully the basis upon which they are making decisions and produce information and reasons as to why that decision is being made. It is not acceptable to simply make a denial or partial denial of liability without complying with the Guidelines. For those acting on behalf of injured people, it is extremely important that any decision that partially or wholly denies liability for a claim is carefully considered and particulars requested if adequate reasoning and copies of all relevant documents are not provided.
It is also extremely important to consider that statutory benefits stop after six months for those mostly at fault (responsible for contributory negligence of more than 61%) as well as those with a minor injury. For those practitioners who are not already familiar with the AMA Assessment Guidelines and what constitutes a minor injury, close attention should be paid to those claims where minor injury is alleged. More on the definition minor injury is discussed below.
What is abundantly clear however under the current scheme is that insurers have an incentive to make high allegations of contributory negligence, namely at 62% or higher, on the basis that this would entitle them to cut off weekly benefits and treatment expenses at 26 weeks. In these circumstances, there have been a number of reports by plaintiff lawyers acting on behalf of injured people whereby CTP insurers have alleged significant contributory negligence, in excess of 62%. Careful consideration must be given to the 2017 Act, in particular Section 3.38 which sets out the circumstances in which contributory negligence will be found and includes:
- conviction of drug or alcohol related offences;
- being a voluntary passenger with a driver affected by alcohol or drugs;
- not wearing a seatbelt;
- not wearing a protective helmet;
- voluntary assumption of risk, and
- other conduct defined by the Regulations i.e. Motor Accident Injuries Regulation 2017 (“the regulations”).
What the guidelines make clear at 4.37 is that the same notice provisions apply in that within three months of the date of the claim being made on an insurer, the decision must be clearly identified as “Liability Notice – benefits after 26 weeks” and an insurer must provide in that Notice information capable of satisfying 4.41 of the guidelines in that the consequences of the decision must be made clear as well as providing reasons for the decision, copies of the information relevant to the decision, regardless of whether or not the information supports the decision, and how that decision can be reviewed including how an injured person might seek help to understand the decision and their rights of review.
More importantly for practitioners is that irrespective of compliance with 4.34 to 4.43 of the guidelines in respect of liability decisions, that careful consideration be paid to relevant case law noting that the principles underlying the sections of the 2017 Act, Regulations and Guidelines are no different to the previous motor accidents scheme. This is particularly important when consideration allegations of contributory negligence.
For example, the writer is aware of a case whereby a CTP insurer alleged 80% contributory negligence against a passenger in a vehicle where the driver had an extremely high blood alcohol content reading. The individual was not the owner of the vehicle and despite their CTP insurer making reference to “relevant case law” seems to ignore the very principles enunciated in the decision of Berryman v Joslyn2 and Mackenzie v the Nominal Defendant3. It is extremely important in this respect to consider these principles. In particular, one must be aware of the relative culpability as between passenger and driver in the accident and that relative culpability of both driver and passenger must never exceed 100%, being the total cause of a particular accident. On the one hand all practitioners, both insurers and plaintiff alike, must pay particular attention to the fact that the decision of Berryman v Joslyn and Mackenzie v the Nominal Defendant are both cases that pose exceptional circumstances that led to allegations of contributory negligence in excess of 50%.
Berryman v Joslyn
Specifically, in the case of Berryman v Joslyn4 it is important to consider the specific facts of that matter whereby Mr Berryman was a passenger in his own Ute. Ms Joslyn was the driver and both had attended a party at a property in South-Western New South Wales where they were drinking until approximately 4.00am. Mr Berryman then allowed Ms Joslyn to drive his vehicle despite knowing that she had lost her licence, had not driven for over three years and that she was still intoxicated from drinking from the night before and both had had little sleep. Mr Berryman was also aware that the Ute was difficult to control and had a propensity to roll. At first instance, the Trial Judge deducted 25% for contributory negligence and on appeal to the High Court a decision was made that the measure of contributory negligence was objective and that Mr Berryman could not rely upon his own intoxication as an excuse for being unaware of Ms Joslyn’s own intoxication and for deciding to put her in the driver’s seat. The matter was ultimately remitted to the Court of Appeal for further determination of contributory negligence whereby the Court of Appeal reassessed contributory negligence at 60%. The Court made findings of contributory negligence at this level on the basis that Mr Berryman was the owner of the vehicle and was in a position to exercise control over its use5. Therefore, notwithstanding the extraordinary circumstances whereby Mr Berryman was the owner of the vehicle, was aware of Ms Joslyn’s intoxication, that she was unlicensed, had never driven the vehicle and indeed had not driven for approximately three years, had not eaten since ceasing drinking at 4.00am and still the Court did not make a finding over 61% contributory negligence.
Mackenzie v the Nominal Defendant
Conversely, in the matter of Mackenzie v the Nominal Defendant6, a Mr Mackenzie and a Mr Brown engaged in extensive drinking following which a decision was made to ride Mr Mackenzie’s unregistered Harley-Davidson motorcycle. As Mr Mackenzie had a suspended licence an election was made for Mr Brown to ride the motorcycle despite the knowledge on the part of Mr Mackenzie that Mr Brown was not licensed to ride a motorcycle and had no experience with the Harley-Davidson in question. On a factual basis, this is not unlike the decision of Berryman v Joslyn. The Trial Judge in this case assessed 100% contributory negligence and on appeal the Court of Appeal reassessed contributory negligence at 80%.
The common theme through both of these decisions is that the cases involve the plaintiff putting the driver in the driver’s seat of a vehicle that was owned by themselves, thus increasing culpability. Therefore, when considering cases of contributory negligence one must not simply accept that these cases are somehow guiding principles to assessing contributory negligence between 60% and 80% given their very specific facts and the interplay of the owner of the vehicle and the decision-making and knowledge in placing the ultimate driver behind the wheel of the vehicle following which injury was caused.
Whilst these decisions often form the basis upon which high allegations of contributory negligence are made, it is extremely important to consider individual cases based on their facts to determine whether or not these indeed fall within the realms of these two very exceptional cases. The conclusion that follows is that if facts and circumstances of a particular case do not fall within the realms of these two cases, then general principles of contributory negligence would apply. In this regard, it is extremely unlikely that unless there are exceptional circumstances that apply to a particular case, that contributory negligence would exceed more than 50% which is supported by the principles in Smith v Zhang7 which cited and approved the findings by the High Court in Pennington v Norris8 whereby:
“Here, as in Pennington, the Respondent was driving a vehicle which had the potential to cause considerable harm to others if he failed to drive it carefully. Thus the responsibility that he undertook, along with other drivers on the public roads was a heavy one. In contrast, the [pedestrian] Appellant’s conduct was unlikely to cause harm to anyone other than himself. Her responsibility was thus more limited and her neglect of it was less significant than the Respondent’s neglect of his own.”
What is made abundantly clear by cases on contributory negligence is that
“Passengers who travel with an intoxicated and unlicensed driver can expect a significant penalty for contributory negligence. However, that contributory negligence is unlikely to exceed 50%, except in cases where it is the passenger who owns the vehicle and the passenger has been responsible for putting the driver in the driver’s seat.”9
Entitlement and Termination of Statutory Benefits
Statutory benefits stop after six months for those mostly at fault (responsible for contributory negligence of more than 61%) and for those with a minor injury.
Weekly payments under the statutory benefits scheme last for two years unless an injured person has a pending common law claim where the benefits are extended to 156 weeks (three years) if they are assessed under 10% whole person impairment or 260 weeks (five years) if their whole person impairment is 10% or more10.
The insurer is able to make decisions about the claimant’s pre-accident earning capacity or post-accident earning capacity at any time during the course of the statutory claim which is subject to the procedures set out in the Guidelines11. An insurer must comply with the 2017 Act in good faith, afford procedural fairness and use plain language when making determinations12. If an insurer is to reduce an injured person’s payment, they must comply with certain notice periods which is two weeks in respect of the first entitlement period, four weeks in respect to the second and eight weeks thereafter13. After 26 weeks or six months, weekly statutory benefits are to be reduced in accordance with any contributory negligence14.
It is extremely important to be aware that weekly benefits and treatment and care may only cease in circumstances where:
“(a) the motor accident was caused wholly or mostly by the fault of the person;
(b) the person’s only injuries resulting from the motor accident were minor injuries.”15
Therefore, it is incumbent upon insurers to investigate liability and an injured person’s medical condition prior to the expiry of 26 weeks. This is because under the current 2017 Act it is likely that the insurer will be found to bear the onus of proof such that it follows that if they do not have any information about liability or an injured person’s medical condition, that it would be extremely difficult and/or even impossible for them to cut off statutory benefits without such information having regard to their obligations when making liability decisions as outlined above.
Blameless Accidents in the Context of Statutory Benefits
Claims which were previously referred to as blameless motor accidents under the Motor Accidents Compensation Act 1999 are now referred to as “no fault motor accidents” but otherwise retain the same wording as practitioners will be familiar with as they are the same as those under the Motor Accidents Compensation Act 1999, through sections 7A and 7B which are now found in Part 5 of the Motor Accident Injuries Act 2017 (NSW).
However, in the last 12 months there has been an important amendment introduced through the Statute Law (Miscellaneous Provisions) Act (No 2) 2018 of which amends Section 5.4 of the 2017 Act to remove the words “all statutory benefits” from Section 5.4(1). The effect of this change is such that drivers in single vehicle accidents who are determined to be partially at fault but not in excess of 61% whole person impairment will continue to be entitled to statutory benefits subject to the minor injury provisions. Previously, when that wording was contained in Section 5.4(1) it is likely that single vehicle accidents would have been excluded from the statutory scheme.
Case law update
In addition to the practical and legislative developments under the 2017 Act, the writer would say that judicial guidance is likely to increase over the coming years noting the first suite of common law claims will begin progressing from October 2019 where no doubt more decision will become available on the question of minor injury and in motor accidents where it is alleged an injured person was wholly or mostly at fault.
The decisions of Lim v Cho  NSWCA 145 and AAI Limited t/as AAMI v Phillips  NSWSC 1710 remind practitioners that outside of the statutory scheme and administrative law aspects that the questions of duty of care and causation remain live issues in the motor accident space but need to be considered holistically in relation to cases as they are presented.
The Duty of Care Owed by a Driver to Protect from Self Harm
In Lim v Cho,16 the Court of Appeal considered that the culpability of a driver whose front seat passenger (also the driver’s husband) without warning opened the front passenger side door leaping from the vehicle causing catastrophic injury following an argument between the couple. The Court broadly was asked to consider whether or not the duty of care of the driver extended to protecting the passenger from injuring himself and also as to whether or not further evasive action could have been taken by the driver to avoid the injury being suffered to the extent it was by the plaintiff.
The court ultimately found that:
“As the Primary Judge found, whether or not the Respondent had an alternative course open, her actions in the fact of an unexpected emergency cannot be characterised as unreasonable. To put the matter in terms of the statute, there was no error in the Primary Judge finding that, in the circumstances, a reasonable person in the Respondent’s position would have applied the brakes rather than attempted to prevent the Appellant acting in a reckless and dangerous manner. … The Respondent’s actions in a sudden crisis not of her own making were not unreasonable in the circumstances she faced.”17
On the question of causation, the Court did find that the Primary Judge’s findings, whilst imprecise and gave rise to some error, the Court of Appeal found that:
“Despite these errors, the Primary Judge did not err in finding that it was a matter of “speculation” whether the Appellant’s injuries were likely to have been less severe had the speed of the vehicle been reduced below 50 km/h at the moment the Appellant jumped onto the road. The Appellant did not make out his case on causation [as a result].”18
Interestingly, neither the Plaintiff nor Defendant gave evidence in relation to the claim which gave rise to the consideration by the Court of Appeal of an inference regarding Jones v Dunkel19. The so-called rule in Jones v Dunkel is such that a negative inference can be drawn if a particular party failed to give evidence which might assist the Court on the question of what sort of inference positive or negative should be drawn20. The Court did however clarify that:
“It is, however, important to appreciate the limits of the rule. It allows an inference that evidence not called by a party would not have assisted that party, but not that the evidence would have been adverse to that party. Nor does the rule enable a party to fill gaps in the evidence by relying on the absence of a witness the other party might have called. Until the Plaintiff proves facts from which an inference of negligence can be drawn, the Defendant is not called upon to say anything. More generally, no inference can be drawn unless evidence is given of facts requiring an answer.”21
The Question of causation when an Injury is suffered to the Same Body Part in Three separate Motor Vehicle Accidents
In the decision of AAI Ltd t/as AAMI v Phillips22 the Court was asked to consider the causal relationship between a recommendation for surgery across three separate motor vehicle accidents.
A Neurosurgeon on behalf of the injured person recommended an anterior surgical decompression and fusion at the C5\C6 level. The matter proceeded to a Review Panel at the Medical Assessment Service whereby a finding was made that the surgery proposed was related to the second and third accidents only but not the first. The Plaintiff in this case, AAMI, who was the insurer for the third accident challenged this finding alleging that the Panel applied the wrong test of causation, that they failed to provide adequate reasons and that they failed to engage with the Plaintiff’s (being AAMI and NRMA Insurance) arguments as to causation. His Honour Justice Davies found that the Panel fell into error in its application of the appropriate test of causation. The Panel’s conclusions were outlined in the Judgement with specific reference to the Motor Accidents Medical Guidelines at clause 1.9 which provides:
“1.9 There is no simple common test of causation that is applicable to all cases, but the accepted approach involves determining whether the injury (and the associated impairment) was caused or materially contributed to by the motor accident. The motor accident does not have to be a sole cause as long as it is a contributing cause, which is more than negligible. Considering the question “Would this injury (or impairment) have occurred if not for the accident?” may be useful in some cases, although this is not a definitive test and may be applicable in circumstances where there are multiple contributing causes.”
His Honour confirmed that the requirement is to determine whether the treatment relates to the injury caused by the accident and that if an injury that existed at the time of the assessment was not the injury caused by the accident but rather a continuation of those pre-existing degenerative changes, then the treatment cannot relate to “the injury caused by the motor accident”23. Ultimately, His Honour found there was an error of law arising from jurisdictional error and an order in the nature of Mandamus was made remitting the matter to be determined in accordance with the law.24
Part B- Workers Compensation Update in New South Wales
Over the last 12 months there have been a number of changes affecting the Workers Compensation Regulation 2016 (“the 2016 Regulation”) as well as the Workers Compensation Act 1987 (“the 1987 Act”) and the Workplace Injury Management and Workers Compensation Act 1998 (“the 1998 Act”).
The relevant pieces of legislation effecting change are the Workers Compensation Legislation Amendment Act 2018 (“the Amending Act”) and the Workers Compensation Amendment Regulation 2018 (“the Amending Regulation”). The Amending Act commenced on 26 October 2018 and the Amending Regulation commenced on 1 January 2019.
The Amending Act
The changes largely deal with dispute resolution, notice periods, the medical assessment of permanent impairment, calculation of pre-injury average weekly earnings and weekly payments, information sharing, indexation and motor accident claims. There are also further miscellaneous amendments and savings and transitional provisions that have now come into effect
Whilst the Amending Act received assent on 26 October 2018 there are various parts that take effect on different dates. Nonetheless, in summary the Amending Act contains eight schedules as follows:
- Schedule 1 – Amendments Relating to Dispute Resolution.
- Schedule 2 – Amendments Relating to Medical Assessments for Permanent Impairment.
- Schedule 3 – Amendments Relating to Pre-Injury Average Weekly Earnings.
- Schedule 4 – Amendments Relating to Information Sharing.
- Schedule 5 – Amendments Relating to Indexation.
- Schedule 6 – Amendments Relating to Motor Accident Scheme.
- Schedule 7 – Miscellaneous Amendments.
- Schedule 8 – Amendments Relating to Savings and Transitional Provisions.
Schedules 4, 6, 7.1 and 8 commenced on 26 October 2018, whereas Schedule 5 commenced on 1 December 2018 and subsequently Schedules 1.1, 1.2 and 1.3 -, Schedule 2, Schedule 4  and  and 7.2 in 7.3 commenced on 1 January 2019. Schedules 1.3 - and Schedule 3 have not commenced and are awaiting proclamation. These parts, that have not commenced, concern changes to the 2016 regulation and the amendments relating to pre- injury average weekly earnings (PIAWE).
For those wishing to review the Workers Compensation Legislation Amendment Act 2018 in its entirety, the writer would strongly recommend reviewing the version provided at www.wiro.nsw.gov.au which is an annotated version incorporating the amendments into parts of the Workers Compensation Act 1987, Workplace Injury Management and Workers Compensation Act 1998, Workers Compensation Regulation 2016, State Insurance and Care Governance Act 2015 and the Motor Accident Injuries Act 2017 and provides a good understanding of the effect of the provisions of the Amending Act on legislation practitioners may be more familiar with. This paper will summarise the effects of each schedule of the Amending Act.
Schedule 1 – Amendments Relating to Dispute Resolution
The most significant amendments in terms of how it will affect the day to day running of a workers compensation practice are in Schedule 1. This schedule provides for jurisdiction of the Workers Compensation Commission (“WCC”) to determine weekly payment disputes including work capacity decisions.
In practical terms this has been done by removing the merit review functions of SIRA and the procedural review functions of WIRO. Practitioners will note that Section 43(3) of the 1987 Act and Section 105(1) of the 1998 Act previously excluded the jurisdiction of the Commission to hear work capacity disputes. Whilst a worker retains his or her right to an internal review, if a worker is not satisfied with the work capacity decision he or she can file an Application in the Commission in order to have the dispute determined. However, this will only apply to work capacity decisions that occur on or after 1 January 2019.
Practitioners should also be aware that the existing review system for any work capacity decisions made before 1 January 2019 remains for the transitional period, that is 6 months from 1 January 201925.
Practitioners will also note that notices concerning liability will no longer be referred to as Section 54 and Section 74 Notices pursuant to the 1998 Act. These have now been replaced by Sections 78 and 79 which are now inserted into the 1998 Act.
Section 78 of the 1998 Act requires the insurer to give notice of any decision to:
- dispute liability in any aspect of the claim;
- discontinue payments to a worker of weekly payments for compensation; and/or
- reduce the amount of compensation.
However, the insurer’s Notice may now be given in a single Notice which is then provided to the Claimant or worker concerned.
Under Section 79 of the 1998 Act, the Notice must contain a concise and readily understandable statement of the reason/s for the decision and must identify the provisions of the workers compensation legislation which the insurer relies to dispute liability. These new notices will be known as a Section 78 Notice and in summary will allow an insurer to issue a single Dispute Notice regarding any decision to dispute liability and/or discontinue or reduce weekly payments.
The object of these changes is to simplify the process required to dispute work capacity and liability decisions.
Schedule 2 – Amendments Relating to Medical Assessments for Permanent Impairment
This schedule commenced on 1 January 2019 and now allows an arbitrator to make decisions in respect of permanent impairment without an AMS assessment.
The amendment removes section 65 (3) of the 1987 Act which provides that all permanent impairment disputes must be referred to an AMS and affirms that decisions made by Arbitrators regarding permanent impairment are now deemed to be binding assessments for the purposes of s322A of the 1998 Act i.e. that only one claim for lump sum compensation is permitted.
The regulations are likely to govern in what circumstances there will be a mandatory referral to an AMS. To date the best indication of how this might be approached is found in E-Bulletin 83 released by the Commission in February 2019 which indicates that:
“Permanent impairment disputes
Permanent impairment disputes can now be determined by an Arbitrator without the need for a medical assessment by an Approved Medical Specialist. In addition to disputes regarding liability for permanent impairment, quantum only permanent impairment disputes will be referred to an Arbitrator for an initial teleconference where:
- there has been a failure to determine by the insurer;
- the claim by the worker, and the offer by the insurer, do not cross a threshold, that is:
Insurer’s counter offer
11 to 14 per cent
11 to 13 per cent
15 to 20 per cent
15 to 9 per cent
21 to 30 per cent
21 to 29 per cent
31 per cent or more
31 per cent or more, but less than the quantum claimed
Arbitrators may refer medical disputes to Approved Medical Specialists for assessment.”
In summary, it is likely that referrals to an AMS will be mandatory where there is a dispute regarding threshold issues, for example, 15% WPI for the purposes of a work injury damages dispute or 21% WPI for a worker with ‘High needs”.
Schedule 3 – Amendments Relating to Pre-Injury Average Weekly Earnings.
This schedule has not yet commenced but will bring into effect significant changes to the way in which PIAWE will be calculated. Section 2 of Schedule 3 now re-defines PIAWE as follows:
“(1)Pre-injury average weekly earnings, in relation to an injured worker, means the weekly average of the gross pre-injury earnings received by the worker for work in any employment in which the worker was engaged at the time of the injury.
Note. See also clauses 3–5 relating to modifications of pre-injury average weekly earnings by agreement and in relation to apprentices, trainees and persons aged under 21 years.
(2) Except as provided by this clause (or by regulations made under this clause), in calculating the pre-injury earnings received by a worker in employment for the purposes of subclause (1), no regard is to be had to earnings in the employment paid or payable to the worker for work performed before or after the period of 52 weeks ending immediately before the date of the injury (the relevant earning period).
(3) The regulations may provide for the adjustment of the relevant earning period for a worker in employment (including, for example, by extending or reducing the period):
(a) to take into account any period of unpaid leave or other change in earnings circumstances in the employment, or
(b) to align the relevant earning period with any regular interval at which the worker is entitled to receive payment of earnings for work performed in the employment.
(4) If the amount of a worker’s pre-injury average weekly earnings is less than any minimum amount prescribed by the regulations as applicable to the worker, the amount of the worker’s pre-injury average weekly earnings is taken to be that minimum amount. Different minimum amounts may be prescribed for different classes of workers, including part-time and full-time workers.”
In short, the most significant changes are that workers injured on or after 26 October 2018 will now have overtime and shift allowances included after 52 weeks of weekly payments.
Further changes brought into effect by Schedule 3 also allow an agreement to be reached between the worker and the insurer on the amount of PIAWE to be paid26.
Sections 35-38 of the 1987 will also now be omitted in favour of:
“36 Weekly payments during first entitlement period (first 13 weeks)
(1) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the first entitlement period is to be at the rate of 95% of the worker’s pre-injury average weekly earnings.
(2) The weekly payment of compensation to which an injured worker who has current work capacity is entitled during the first entitlement period is to be at the lesser of the following rates:
(a) 95% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.
37 Weekly payments during second entitlement period (14-130)
(1) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled during the second entitlement period is to beat the rate of 80% of the worker’s pre-injury average weekly earnings.
(2) The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for not less than 15 hours per week is entitled during the second entitlement period is to be at the lesser of the following rates:
(a) 95% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.
(3) The weekly payment of compensation to which an injured worker who has current work capacity and has returned to work for less than 15 hours per week (or who has not returned to work) is entitled during the second entitlement period is to be at the lesser of the following rates:
(a) 80% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.
Section 38 Weekly payments after second entitlement period (after week 130)
(6) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled under this section after the second entitlement period is to be at the rate of 80% of the worker’s pre-injury average weekly earnings.
(7) The weekly payment of compensation to which an injured worker who has current work capacity is entitled under this section after the second entitlement period is to be at the lesser of the following rates:
(a) 80% of the worker’s pre-injury average weekly earnings, less the worker’s current weekly earnings,
(b) the maximum weekly compensation amount, less the worker’s current weekly earnings.”
It is important for practitioners to be aware that these changes do not apply to Coalminers, exempt workers and non-exempt workers injured before 26 October 2018.
Schedule 4 – Amendments Relating to Information Sharing
Schedule 4 was passed in order to improve data collection and enable SIRA greater capacity to monitor the scheme. Whilst these have not been effected to date they will enable SIRA, WIRO and insurers to share information and data concerning policies, claims, complaints and information regarding the operation of the workers compensation scheme/ legislation.
There will also be mandatory reporting obligations imposed on insurers.
Schedule 5 – Amendments Relating to Indexation
This schedule commenced on 1 December 2018 and indicates that indexation changes are no longer required to be in the form of a notice in the Government Gazette or ministerial order and will now be published on the NSW legislation website.
Schedule 6 – Amendments Relating to Motor Accident Scheme
These changes commenced on 26 October 2018 and seek to limit the unintended consequences arising from amendments to the Motor Accident Injuries Act 2017, which apply to motor accidents that occurred on or after 1 December 2017.
These provisions specifically outline what is recoverable by a workers compensation insurer in circumstances where an injured worker recovers compensation under both the Workers
Compensation and the Motor Accidents Scheme. This only applies to NSW work injuries and does not apply to the workers compensation scheme in any other state or territory in Australia.
In short, this schedule has two main effects:
1. If a worker receives workers compensation benefits in NSW and recovers damages under the motor accident scheme arising from an injury on or after 1 December 2017 the worker is only required to repay any weekly payments received under the workers compensation scheme. Workers injured in a motor vehicle accident during the course of employment will retain their rights to reasonable and necessary medical, treatment and care expenses under the Workers Compensation scheme or, if these cease, will retain those rights under the motor accident scheme27.
2. If a worker makes a claim for lump sum compensation, any amount received is only recoverable in circumstances where the worker is also successful in recovering damages for non-economic loss or pain and suffering under the motor accidents scheme. 28
Schedule 7 – Miscellaneous Amendments
The miscellaneous amendments commenced on 26 October 2018 and make three changes:
1. Expands the Board of SIRA from 3 to 529, making way for the appointments of the Hon Judge Greg Keating, former President of the Workers Compensation Commission and Rod Stowe, the former NSW Fair Trading Commissioner;
2. Allows employers to publish certain information in relation to workers compensation legislation procedures on their website rather than at their place of work;
3.Prohibits the commutation of any liability to pay medical expenses for workers that suffer ‘catastrophic injury’ if it falls within the scope of Part 9 of the Workers Compensation Guidelines, namely, spinal cord injuries, brain injury, amputations, full thickness burns and permanent blindness.
Schedule 8 – Amendments Relating to Savings and Transitional Provisions
This schedule commenced on 26 October 2018. Of particular importance is that this schedule confirm that Schedules 1 and 3, outlined above, doe not apply to coal miners or emeregency first responders. Schedule 2 does, however, apply to exempt workers i.e. police officers, paramedics and firefighters.
As outlined above, this schedule sets out the transitional period as it applies to existing work capacity decisions i.e. 6 months from commencement.
The Amending Regulation
The Amending Regulation will apply from 1 January 2019. According to the explanatory note to the regulation these changes make provision for consequences arising from the Amending Act. Specifically, the Amending Regulation deals with:
- the notification of decisions of insurers and the procedure for reviews by insurers of work capacity decisions and claims,
- prescribing the use of mobile device applications as a method by which an employer may notify workers of return-to-work programs,
- costs recoverable for legal services provided to an insurer or a claimant in connection with a work capacity decision;
- other minor related matters30.
Specifically, the required notice period of three months for a work capacity decision has been retained as are the notice provisions pursuant to clause 42B of the 2016 Regulation which requires notices to be in writing, contain a concise and readily understandable statement of the reasons, identify any provisions relied upon in making the review decision and contain all of the information set out in clause 38(1) of the 2016 Regulation which practitioners will no doubt be familiar with.
A “dispute notice”: will now be referred to as a “decision notice” where it appears in Schedule 6 of the 2016 Regulation. .
The regulations also provide for further changes to the 1987 Act regarding practitioners’ entitlement to costs for work capacity decision disputes during the transitional period. Namely, practitioners are entitled to $1,800 plus GST for a favourable finding resulting from a review application or $1,200 plus GST in any other case31. Practitioners should be aware but are reminded that costs disclosure obligations apply32.
Other Developments to take note of
As a result of the Amending Act and Regulation there have been a number of changes practitioners should familiarise themselves with including:
1. The Workers Compensation Guidelines which applies to all claims from 1 January 2019 except coal miner and dust disease claims and applies to exempt workers only where clearly and expressly indicated in the guidelines33. The guidelines replace the Guidelines for claiming workers compensation dated 1 August 2016, the Guidelines on injury management consultants dated 27 September 2012 and the Guidelines on independent medical examinations and reports dated 13 March 2012 and contains the following parts:
a. Part 1: Initial notification of an injury
b. Part 2: Provisional liability
c. Part 3: Making a claim
d. Part 4: Compensation for medical, hospital, and rehabilitation expenses
e. Part 5: Work capacity
f. Part 6: Injury management consultants
g. Part 7: Independent medical examinations and reports
h. Part 8: Lump sum compensation
i. Part 9: Commutation of compensation
2. Changes to the Workers Compensation Commission Rules which apply from 10 January 2019 and give effect to the changes in the Amending Act and Regulation insofar as it affects the functions of the Commission34.
3. SIRA have now developed standards of practice to support and encourage insurers to employ effective claims management practices. There are now 31 Standards ranging from claims management and liability for the payment of benefits through to the manner in which notifications are to be given. SIRA will be responsible for overseeing compliance with the Standards to ensure consistent insurer conduct in the management of Workers Compensation Claims in NSW. 35
The complexities, developments and parliamentary attention in the statutory personal injury schemes in New South Wales will no doubt continue to change and develop over the next 12 months which means that practitioners will need to keep up to date to ensure their clients are clearly and adequately informed of their rights.
1 Motor Accident Guidelines, Version 4, effective from 15 January 2019
2  NSWCA 121
3  NSWCA 180
5  NSWCA 121 at 31 per Tobias JA
6  NSWCA 180
7  NSWCA 142
8 (1956) 96 CLR 10
9 “What Insurers Don’t Understand about Contributory Negligence” by Andrew Stone published in Precedent Magazine Issue 114 January/February 2013
10 Motor Accident Injuries Act 2017 (NSW) Section 3.12
11 Ibid Section 3.16
12 Motor Accident Guidelines (Version 2 effective from 30 April 2018) clauses 4.45, 4.46, 4.47 and 4.49
13 Ibid, Section 3.19
14 Ibid, Section 3.38
15 Ibid, Sections 3.11 and 3.28
16  NSWCA 145
17 Ibid, at paragraphs 37 and 38 per Sackville AJA 18 Ibid, at paragraphs 50 and 51 per Sackville AJA 19 (1959) 101 CLR 298
20 Lim v Cho  NSWCA 145 at paragraph 40 per Sackville AJA
21 Ibid, at paragraph 41 per Sackville AJA
22  NSWSC 1710
23 Ibid, at paragraphs 26, 27 and 28 per Davies J
24 Ibid, at paragraph 60 per Davies J
25 Schedule 6, Part A, Work Capacity Decision Disputes, (4)(a).
26 Schedule 3, s3.
27 Workers Compensation Act 1987 (NSW) s151A (4)-(5) and s151Z (1A).
29 State Insurance and Care Governance Act 2015 (NSW) s18(2)(c).
30 Workers Compensation Amendment Regulation 2018 (NSW) Explanatory Note.
31 Workers Compensation Act 1987 (NSW) s6A(2)(a)&(b).
32 Legal Profession Uniform Law (NSW) Division 2 of Part 4.3.
33 Available at: www.sira.nsw.gov.au (under resources/library/workers compensation guidelines).
34 See E-bulletin No. 83 February 2019 available at: www.wcc.nsw.gov.au
35 Available at: www.sira.nsw.gov.au (under resources/library/standards of practice).