The consequences of implementing lumspum & common law claim thresholds


Referring back to WorkSafe Victoria’s CEO (and high-rise plonker) has recently been demanding that common law rights be slashed and in the wake of the recent cruel NSW workcover reforms, which include an increase in the level of permanent impairment threshold to be entitled for a lumpsum and common law damages, not to mention the current “review” which is going on in QLD,we are really baffled and perplexed as why workcover schemes and their stakeholders continue to push for increased thresholds when there is ample evidence of spectacular failure in other jurisdictions/states.

For example Worksafe Victoria Annual Report 2009 – who had/has the highest/stringiest lumpsum and common law  thresholds of a whopping 30% WPI showed  a loss/ deficit of $1,254,459,000 and  Workcover NSW Annual Report 2008/2009  which, at the time, had one of the lowest thresholds showed a deficit of $1,482,000,000. Mmmhhh.

The question is, shouldn’t our Governments look at the examples and models of other States where thresholds have been introduced first before making the same mistake, believing their deficits will be miraculously fixed?

Evidence shows over and over again that the implementation of (increased) thresholds have not contained costs in these schemes (i.e Vic is a good example, given they now want to go as far as to abolish the common law rights again!)  and in fact resulted in schemes which are still burdened by massive debt and liability.

The consequences of implementing lumspum & common law claim thresholds

Injured workers should not have to resort to social welfare!

Australians –if they knew the truth– would find it morally repulsive and financially irresponsible to suggest that those injured through the negligence of others are to become social welfare recipients and a burden on the taxpayers.This is so un-Australian!

Injured workers, especially those who are injured through the fault and negligence of their own employer(s) really deserve decent economic loss and other damages, and tailor-made to their individual needs and circumstances. In addition, those injureds through the fault of others should not and never be a burden on the taxpayers.

Australian politicians, both State and Federal, have a duty to ensure that they understand that if common law rights are altered or abolished (for example by introducing a certain minimum impairment threshold to access a lumpsum or common law claim) a huge burden (would) shifts to the taxpayers and those injured workers are/will be left dissatisfied and  social welfare recipients (i.e. Centrelink).

Those politicians, as well as people like our very own- duped “fishface”- WorkSafe Victoria CEO,  also have a duty of care not to make careless, reckless, fully sick  and plain wrong statements that common law or common law damages claims are ‘out of control’.

The Failure of  lumpsum & common law claim [impairment]Thresholds

There has been some recent guesswork, mainly emanating from, of course,  business lobby groups (incl of course insurers), regarding the “benefits” of  introducing higher “thresholds”, for example in QLD.

However, we believe that the Government(s) should look at the examples and models of other States, such as Victoria, where very harsh thresholds have been introduced. Thresholds have not contained costs in these schemes and in fact resulted in schemes which are still burdened by massive debt and liability.(1) Why stakeholders continue to push for thresholds when there have been  spectacular failures in other jurisdictions mystifies us.
Moreover, thresholds will result in un-necessary, and potentially massive industrial unrest by employees, and, especially injured workers (and their representatives), which is clearly appearing is NSW.

(1) Worksafe Victoria Annual Report 2009 – shows a loss of $1,254,459,000
Workcover NSW Annual Report 2008/2009 – shows a deficit of $1,482,000,000.

“Low threshold” and “high threshold” workcover schemes: the difference

Let’s take for example, workcover Queensland’s scheme – historically this scheme has allowed full access to common law, however the scheme is currently under “review” and planning on implementing a range of changes, akin to the Victoria and NSW’s schemes. However, as we have seen in states such as in Victoria, introducing high thresholds and restricting access to common law only results in a shift to what is called ‘long tail’  workcover schemes, or “pseudo social security schemes” which are extremely expensive to administer.

Again, the experience in Victoria alone has shown that far from being profitable these “long tail” schemes become more a form of a very costly ‘pseudo’ social security. The same is emerging in NSW, since the recent reforms.

Fact: Thresholds lead to much large administrative costs

One of the biggest issues with the introduction of thresholds is that it will lead to very significant increase in the number of appeals (i.e. to the Medical Assessment Tribunal, Conciliations, Appeals Tribunals, Medical Panels, etc) with many dissatisfied injured workers challenging their mere percentage of impairment (rating/WPI) in order to reach the necessary, arbitrary threshold required in their state to “qualify” for a  lumpsum, but more importantly in order to meet the (harsh) criteria to be eligible for a perfectly legitimate common law damages claim. Look at what is happening in NSW! Millions of unnecessary dollars are already wasted on the WIRO – vital money that could have gone a long way at helping injured workers, such as providing them with the much needed compensation they are rightfully entitled to, to “move on” with their lives as best as possible.

In many states, such as Victoria, Queensland, and even NSW, the medical assessment tribunals or the equivalents are already stretched out and it takes months to get an appointment just to get an assessment. By further increasing thresholds, those resources will be unable to cope with the demand for assessments and appeals, and our systems will become clogged up, adding more cost.

Thresholds are also extremely unjust and unfair: they rely on outdated, 20 year old, non-scientific AMA Guides!

To start to even begin to understand how unjust and unfair thresholds are a thorough knowledge of the American Medical Association (AMA) Guides to Assessment of Permanent Impairment is necessary.

Some states use the harshest AMA 4th Edition, which has even had the pain chapter removed (helooo!) (Victoria), some states use the 5th Edition (QLD, and we believe NSW as well). Refer to the relevant legislation in your state to identify which edition your state uses.

The general but very important problems with thresholds based on the “famous” yet dodgy AMA assessments are best summarised as follows:

[For the sake of generalisation, we will be referring to excerpts of the AMA Guides 5th edition – as we actually have a hard copy available for reference]

Permanent impairment percentages are determined by doctors (independent doctors, specialists who have undergone a short course in this assessment procedure) using the ‘American Medical Association Guides to the Evaluation of Permanent Impairment’ (AMA) (and the edition as per the state’s worker’s compensation legislation).

Anyone familiar with the operation of the AMA Guides realises that they are just an arbitrary (= unscientific) administrative tool.

The various “percentages” assigned to “injury” act more as a broad descriptor or label -really- of a particular injury.

These Guides do not take account of the impact that an injury (or injuries) may have upon a particular person, in particular their work-ability (the ability to actually work)! The guides themselves make this actually perfectly clear.

In our seriously injured opinion, it is absolutely necessary that our “decision makers” such as politicians, governments etc really  understand the massive difference between ‘impairment’ and ‘disability’ and that they- at the very least – familiarise themselves with Chapter 1 – Philosophy, Purpose and Appropriate Use of the AMA Guides, before changing the legislation (thresholds)! Why?

The following are some relevant excerpts from Chapter 1 AMA Guides 5th edition:

  • Impairment percentages or ratings… reflect the severity of the medical condition and the degree to which the impairment decreases an individual’s ability to perform common activities of daily living (ADL), excluding work…
  • The medical judgement used to determine the original impairment percentages could not account for the diversity or complexity of work but could account for the daily activities common to most people…
  • The impairment evaluation, however, is only one aspect of disability determination. A disability determination also includes information about the individual’s skills, education, job history, adaptability, age and environment requirements and modifications…
  • An individual with a medical impairment can have no disability for some occupations, yet be very disabled for others...
  • …the Guides is not to be used for direct financial awards nor as the sole measure of disability.
  • The Guides provides a standard medical assessment for impairment determination and may be used as a component in disability assessment…
  • Impairment percentages derived from the Guides criteria should not be used as direct estimates of disability.
  • Impairment percentages estimate the extent of the impairment on whole person functioning and account for basic activities of daily living, not including work. The complexity of work activities requires individual analyses. Impairment assessment is a necessary first step for determining disability. (all emphasis in original text)
Examples of the inappropriate AMA Guides

Take the example of the common 5% spine or low back injury. For, let’s say, an educated, mostly sedentary, office, departmental, HR, etc  manager this injury is probably not going to overly affect this injured worker’s ability to undertake his/her work (with some minor accommodations). However, take the same injury for an uneducated, manual labourer and a 5% spine injury could -indeed- imply disastrous consequences and prevent this injured worker from undertaking any sort of future employment involving heavy lifting and labour work (etc). The same were to apply to let’s say an educated bank manager with a relatively “minor” shoulder injury with a an average of 8-11% WPI – the same shoulder injury would have drastic consequences to a manual labourer , a shelf -storer, or even  a nurse who needs to be able to manually lift patients and undertake repetitive work. These affected people can never return to their pre-injury jobs.

To deny such injured workers access to common law damages based on a “threshold” is simply unjust and most unfair also since if the same injury mentioned in these examples occurred in a motor vehicle accident or public place they would have access to common law damages.

The taxpayer ends up paying for the increased thresholds and/or common law abolishes!

If you think about it carefully, you will soon realise that when thresholds are applied (i.e. increased impairment percentages needed to meet lumpsum / common law criteria)  it simply shifts the burden and the costs associated with worklpace injuries from negligent employers on to the taxpayers.

Taxpayers should be made aware of the costs to Government as a result of introduction of these thresholds. Yet they are NOT made aware of this fact! Do you ever see a press release or media article mentioning that as a result of workcover legislation amendments the taxpayer(s) are now footing the bills for the countless injured workers in their state? Nope!?

These ridiculous and under-handed, not thought through thresholds also shift the burden on to other Government organisations such as social security (Centrelink, even Charity organisations such as the Salvo’s etc) and then onto the taxpayer(s).

Countless personal injury lawyers who have experience in states that have harsh thresholds (such as Victoria) can vouch for the fact that Workcover costs are actually increased and workers’ rights and compensation even more restricted or abolished when thresholds are used.

Thresholds are simply unjust and unfair

Injured workers should have the same rights as any other injured citizen who has been injured by the negligent act of another

Citizens injured in a motor vehicle or other type of incident (i.e. accident in a public place) have the right to common law in all states we’re aware of subject to the Civil Liability Act (with the exception of Victims of Crime, which is a disgrace).

Injured workers should never be denied the same rights as other citizens and should have full access to common law. For employers or Workcover to suggest otherwise is disgusting and deserves of the sternest criticism by unions and the community at large as being completely self interested.

A word about the 0 (zero) % thresholds

Quite a few, very unfortunate injured workers, particularly in Victoria, have shared with us their harrowing stories that they scored ZERO % at their impairment assessments, as undertaken/appealed by a Medical Panel. ZERO % despite debilitating pain and no work-ability! Now how fair is that? How is this even possible? How can someone, who is unable to undertake their activities of daily living, let alone work, and has been diagnosed by experts with very painful and real conditions score o%?

Not only are such injured workers so shocked that they all inevitably appeal their initial impairment assessments, in Vic, they go to the a Medical Panel, which drastically increases costs across the board. Workcover has to pay a flat fee of $5000 for a Medical Panel (and this does not include the initial conciliation fee which averages $2000 depending on the number of reports, nor the initial impairment assessment). So, basically 0% threshold will ensure a massive increase in disputation costs, no matter how you turn it, because those injured workers and their lawyers  will try to ensure their client’s get above 0%. BTW the same applies to any other threshold, i.e. if you need 10% and get 9, again disputes will be lodged at increased costs.

As said before, the commentary of the Victorian scheme recently is that there has been great concern about the huge administrative and disputation costs of enforcing thresholds… surprise, surprise… But nothwithstanding these comments, NSW followed in their footsteps and QLD is now also well under way.

Aside  from the harsh reality that it will not contain costs a 0% threshold is extremely unfair.

As discussed above, the many shortcomings of the AMA Guides are obvious. However it is worth to highlight again that it is imperative that our law-makers have a very clear understanding on what is meant by ‘impairment’ versus ‘disability’. Unfortunately it appears that nobody even bothers to read the AMA Guides in the first place! As such they fail to understand why disputation (conciliation, appeals, court) costs get out of control.

The dodgy, outdated and non-scientific Guides can only assess impairment in relation to activities of daily living. (and that is as of the 5th edition, the 4th edition used in Victoria couldn’t even care less about that either).

The AMA Guides do not account for impact of a particular injury on an injured worker’s ability to work and disability.

A 0% whole person impairment (WPI) rating is given to an injured worker with an impairment if the impairment has no significant organ or body system functional consequences and does not limit the performance of the common activities of daily living…

An individual can have a disability in performing a specific work activity but not have a disability in any other social role…

(Note these are real  excerpts from American Medical Association Guides to the Evaluation of Permanent Impairment, Fifth Edition, Chapter 1 – Philosophy, Purpose, and Appropriate Use of the Guides)

It is therefore that many good personal injury lawyers will, despite the a 0% assessment (or 1-5%), still often proceed with a serious injury certificate and/or a common law damages claim (if the employer was negligent) because they are well aware of the effect(s) that the injury has upon the injured worker and the fact that the 0% (or small) assessment does not address ongoing difficulties that the injured worker may now be experiencing at work.

Only then is the injured worker  allowed to be assessed by truly independent doctors both by the lawyers firm and by the defendant’s (workcover insurer) doctors. Needless to say that in the case of 0%,  often, both these independent doctors will come back with a percentage impairment. However, even if such reports do not return an impairment (still 0%) they can and often will still highlight issues with disability and work.

The matter of the fact is that zero (0%) impairment under the AMA Guides does not take into account the disability that an injured worker may suffer or ongoing difficulties undertaking work activities. As such a 0% threshold can not be supported and is totally ridiculous.


[Post dictated by workcovervictim, transcribed and inserted on behalf of workcovervictim]



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3 Responses to “The consequences of implementing lumspum & common law claim thresholds”

  1. Well written @WorkcoverVictim! As alway detailed and concise analysis. As with most things pertaining to Workers Compensation, a “guideline” becomes black and white fact.

    The whole system should be based on a “performance basis” i.e. the system should be flexible enough to allow different solutions for different injured people in varying circumstances to achieve the best outcome for the injured worker.

    What we have is a totally “prescriptive” system where one size must fit all.

    In essence, the adversarial WorkCover legal processes still gets down to who has the most believable expert medical witness.

    The whole system is totally fucked. Throw it out COMPLETELY and start again!

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  2. Can someone tell me where to make a complaint about a case manager i have at CGU yes people her name is “X”

    [note case manager name censored by admin – be very careful naming people on public sites like ours, as 1)you can be identified and 2) we, the site admins regularly receive lawsuit threats for defamation)

    Now my problem is she has been prejudice towards my Good self, i have contacted her incident assessment officer [name censored] who is reluctant to help me lodge this complaint as she has only been in the country a short time?? and does’t really quite understand our lingo!! he tells me.

    So where to from here?

    Can someone point me in the right direction to put in a complaint outside the insurance company ??

    This is disgusting behaviour in our country how dare this person arrive here on a boat get a job with an insurance company that use very dishonest practices well documented in the media and start slagging off our citizens who are honest hard working people with legitimate claims.

    What a Dogg!!!!

    help me stitch her up someone!

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    ........................ September 26, 2013 at 2:00 am
    • @….. start by making a formal complaint to the “team Leader” or equivalent of that case manager, and cc it to the “general manager” (even the CEO) and the “complaints department” of CGU. There are a couple of real letters of complaints written by lawyers here, which you can use and amend. Ensure you attach the evidence of wrongdoing, ill-treatment, mis-management.
      Also write a complaint letter to the workcover authority of your state about CGU, in particular about the mismanagement by your case manager.
      Remember that you can also put a “restraining order” on your case manager (see the sample, real letters above) for ideas on how to word such a letters/requests. It does wonders to request no personal contact in any form or shape and that all correspondence from your CM must be addressed in writing to either your lawyer either one of your treating doctors (i.e. GP, psychologist)

      Good luck and good riddance!

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