Author: Jessica Micallef     Andrew Gorman   
Judgment Date: 16 February 2012
Citation: Allianz Australia Insurance Ltd v Kerr [2012] NSWCA 13
Jurisdiction: Supreme Court of New South Wales Court of Appeal[1]
In Brief
  • The obligation of a Claims Assessor to provide reasons is lesser than the corresponding obligation of a court.
  • The statutory obligation under s 126 does not require a Claims Assessor to explain why some particular amount was chosen as opposed to another.
  • Once the minimum factual assumptions required by s 126 are stated, a decision‑maker assessing damages for a future hypothetical scenario may bring an element of impression to bear on the assessment.
  • Damages for future economic loss should not normally be awarded by way of buffer in circumstances where the evidence enables a more certain determination of the difference between the plaintiff’s position before and after the injury.
Background

The claimant was involved in a motor vehicle accident on 6 March 2007 sustaining injuries to her neck and back and an exacerbation of a pre-existing psychiatric condition.  Following the accident, the claimant had returned to employment, although not in her pre‑injury capacity, and was being provided gratuitous domestic assistance by a flatmate who was a long‑term friend.

The matter was referred for an assessment of damages at CARS.  The Claims Assessor certified assessments of future economic loss on the basis of a buffer in sum of $200,000, past gratuitous domestic assistance and future commercial domestic assistance.

The insurer sought judicial review of the decision, alleging a number of errors in the assessment.  Hislop J[2] dismissed the application, finding that none of the alleged errors were made out.  The insurer then sought leave to appeal from the judgment of Hislop J.

Issues

The insurer contended that the Claims Assessor demonstrated material errors of law on the face of the record of the proceedings as he:

  1. failed to comply with s 126 of the Motor Accidents Compensation Act 1999 (NSW) (MACA);
  2. assessed future domestic assistance on a commercial basis; and
  3. failed to provide sufficient reasons for his assessment.
Findings

Basten JA determined that the Claims Assessor’s consideration as to whether the claimant could continue her career as a nursing assistant, notwithstanding her pre‑existing psychiatric vulnerability, and determining her residual capacity was sufficient consideration for an award of future economic loss in accordance with s 126 of the MACA.  Although the Claims Assessor had not complied with s 126(3) in determining the percentage possibility that the events concerned might have occurred but for the injury, this is not required when making a buffer award, due to its broad approach.  Therefore, it was determined that there was no material error in the approach adopted by the Claims Assessor as he had properly considered future hypothetical scenarios and made the minimum factual assumptions required under s 126 of the MACA.

The Court determined that when making an assessment of future economic loss damages under s 126 of the MACA, a decision‑maker may bring an element of impression to bear on the assessment.  McColl JA stated at [7]:

“It must also be taken into account, when considering the appellant’s complaint about the adequacy of the claims assessor’s reasons for quantifying the buffer, that the task of assessing damages for lost earning capacity is “necessarily impressionistic.””

Whilst a buffer may be awarded in accordance with s 126 of the MACA, the Court considered that this should be avoided in circumstances where a more certain determination of future economic loss can be made.

The obligation of a Claims Assessor to provide reasons under s 94(5) of the MACA and the MAA Claims Assessment Guidelines are less than the obligation on a Court.  At [59], Basten JA stated:

“While it is sometimes, but not always, true that lengthy reasons will give greater assistance and understanding than brief reasons, the obligation on the assessor was not to give lengthy reasons.”

Whilst still requiring adherence to s 126, a Claims Assessor is not required to explain how the precise sum was calculated.  Because the quantum assessment of the buffer was “in the range” between the amount claimed by the claimant, and the amount asserted as appropriate by the insurer, no explanation was required.  Further, Macfarlan JA considered that it was sufficient that the quantum of the future economic loss buffer determined by the Claims Assessor represented his “intuitive assessment” of the claimant’s economic loss.

Basten JA clarified the reasoning in Miller v Galderisi[3] that future domestic assistance to be on a commercial basis must not be remote, entirely fanciful or limited to chance.  In circumstances where the main provider of gratuitous assistance, as at the date of assessment, is not a family member and there is no presumption of continuity, it is unnecessary for a Claims Assessor to provide reasons before making an award for future domestic assistance on a commercial basis.  His Honour explained, at [46]:

“It is possible to envisage circumstances in which family members (through age or departure from the family home) may no longer be able or available to provide such assistance.  That would provide a sound basis for an award of compensation for commercial assistance, if those circumstances were properly established, but they were not established in Miller.  In the present case, no such presumption of continuity arose: the main provider of gratuitous assistance, Mr Hillard, was a long‑term friend, but not a family member.  There was no relevant legal error affecting this aspect of the assessment.”

The Court concluded that the insurer was unable to demonstrate any errors of law and dismissed the appeal.

Implications

Claims Assessors appear to be enjoying a degree of immunity against providing detailed reasons (particularly specific and probative reasons) to support their assessments of damages.  This decision allows Claims Assessors to provide justification for their awards on the basis of their “impressions”.

However, a Claims Assessor cannot ignore the factual assumptions required by s 126.  Moreover, if the evidence is sufficient to enable a more certain calculation of the loss and a buffer is assessed, the aggrieved party may be entitled to challenge it.

Where the provider of gratuitous assistance is a non‑family member, it may be difficult to rely upon Miller v Galderisi to avoid the future entitlement being calculated at commercial rates.  Correspondingly, where the evidence establishes that there is likely to be continuity in terms of the provision of assistance by family members, the rule in Miller may well apply.

[1]        McColl JA, Basten JA and Macfarlan JA
[2]        Allianz Australia Insurance Limited v Kerr [2011] NSWSC 347
[3]        [2009] NSWCA 353

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