When the workcover NSW insurer makes an offer, it is not a claim made by the injured worker

lumpsum-workcover

The following interesting recent workcover NSW  legal case, somewhat related to the Goudappel landmark case, highlights that it is difficult to reconcile how an injured worker could be considered to have made a claim for lump sum compensation without actually doing anything of their own accord, when it is the insurer (in this case CGU) who made a proactive offer of settlement…and how it affects a settlement after the NSW reforms of 19 June 2012.

Background of the workcover NSW case

CGU – n behalf of the RSPCA, made a proactive offer of settlement to the Applicant by letter dated 20 April 2012 on the basis of an Independent Medical Examination (IME) organised by CGU with a Dr John Douglas, Orthopaedic Surgeon on 12 April 2012.

The letter made an offer of compensation of $14,700 pursuant to Section 66 of the NSW Workers Compensation Act 1987 (1987 Act) for permanent impairment; and $5,500 pursuant to Section 67 of the 1987 Act for pain and suffering. The letter stated that the offer would remain open for 21 days from the date of the letter.

The letter stated that the Applicant (injured worker) should seek independent legal advice before acting on the offer and that CGU would be liable for legal costs in accordance with Schedule 6 of the Workers Compensation Regulation 2003.

The letter also stated that if the Applicant (injured worker) did not wish to accept the offer, the matter could be referred to the Workers Compensation Commission (the Commission) for determination one month after the date of the letter.

The 21 day period lapsed with no reply from the Applicant (injured worker).

However, on 22 June 2012 the injured worker’s lawyers wrote to CGU accepting the offer for $14,700 for permanent impairment, but rejecting the offer of $5,500 for pain and suffering advising that it was too low, and made a counter offer on the medical evidence of a Dr Murray Hyde-Page.

You can guess what happened next…CGU was of the view that the proactive offer had expired, and pursuant to Schedule 6 of the Workers Compensation Legislation Amendment Act 2012 (the Amending Act), as of 19 June 2012 the Applicant was no longer entitled to compensation for pain and suffering as Section 67 of the 1987 Act had been repealed.

CGU advised the the injured worker that they had not made a claim prior to 19 June 2012 and that the letter of claim, that being the letter from their lawyers on 22 June 2012, post-dated the amendments made to the 1987 Act by the Amending Act and thus apply to the claim for 11% whole person impairment, which means the Applicant can no longer claim compensation for pain and suffering.

The injured worker (and their lawyer) disagreed and maintained that the claim was made at the time RSPCA/CGU made the proactive offer through CGU and filed proceedings in the Commission.

So, as such The issue for determination by the Commission was whether the Applicant had made a claim for compensation under Section 66 and 67 of the 1987 Act prior to 19 June 2012.

The Hearing and the Decision

The Commission’s Arbitrator took into consideration the decision of President Keating in the matter of ADCO v Goudappel which found the amendments of Schedule 12 of the Amending Act were applicable to those claims made on or after 19 June 2012 regardless of the date of injury.

However the Arbitrator also found that this matter was different from the facts in ADCO v Goudappel in that the insurer (CGU) had made a proactive offer prior to the amendments and although the offer expired, the entitlement to bring proceedings for compensation for pain and suffering before 19 June 2012 existed.

The Arbitrator rejected that the letter from the injured worker’s solicitors on 22 June 2012 constituted the first claim for pain and suffering pursuant to Section 67 of the 1987 Act.

The Arbitrator- surprisingly- found that CGU had determined the claim by issuing the proactive offer and that the injured worker had made a claim for compensation by way of the conduct by the Respondent and its insurer.

The Arbitrator thus held that where an insurer has determined a claim for lump sum compensation prior to 19 June 2012, Schedule 6 of the Amending Act is not applicable.

The Arbitrator ordered that the quantification of the injured worker’s entitlements under Section 67 for pain and suffering remain open and the matter be listed for teleconference.

 

The decision in this case by the Commission’s Arbitrator to consider the insurer’s (CGU) conduct in making a proactive offer actually made the claim for the Applicant should act as a cautionary tale for insurers. Maybe insurers will now need to reconsider the value of making such proactive offers in future….

It will be interesting to see what happens next, and whether or not an appeal will follow.

You can read the full text of the case here: Suzanne Dawn White v Royal Society for the Prevention of Cruelty to Animals t/as RSPCA [2013] NSWWCC 28.

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Bunny
Guest

” Generally amending or repealing legislation will not affect the previous operation of the statute, nor any right, privilege, obligation or liability acquired, accrued or incurred under it (Interpretation Act 1987 NSW)” from Goudappel Appeal decision. Based in English Common Law. Have a close look at this, it has a far reaching impact,