Internal Review Determination Not Binding on Insurer

In Brief

• An Insurer is not bound by its Internal Review determination, particularly in the face of new information.
• A party is not bound by a WPI assessment conducted by its own qualified doctor where their assessment is flawed in some identifiable way.

Facts

The Personal Injury Commission published its decision in AAI Limited t/as GIO v Leverrier [2024] NSWPIC 548 on 11 October 2024.

The Claimant was injured in a motor accident on 21 August 2020 when his motor bike collided with the Insured vehicle. The Claimant was thrown from his motor bike. His injuries included a partial amputation of the right middle finger and a fracture of the left fifth metacarpal. In addition, the Claimant alleged an injury to his right ankle.

With regard to the Claimant’s whole person impairment (WPI):

• The Insurer initially denied that the Claimant’s WPI exceeded the greater than 10% threshold.
• Following the Claimant’s request for Internal Review, the Insurer subsequently accepted that the Claimant’s WPI exceeded 10%.
• Some eight months later, following further investigations, the Insurer wrote to the Claimant and withdrew its concession.
• The Insurer subsequently lodged a WPI dispute with the Commission.

When withdrawing its WPI concession, the Insurer explained that:

• The contemporaneous records recorded no right ankle complaints until 15 months post-accident.
• The pre-accident records noted that the Claimant injured his right ankle in a prior motor accident in April 2016 and whilst playing soccer in August 2019.
• The Claimant’s total WPI would fall below 10% if the motor accident caused no additional impairment to the right ankle.

The Claimant made an application to have the WPI Dispute dismissed on two grounds:

• The outcome of the Internal Review was that the Claimant’s WPI exceeded 10% and there is no provision allowing that decision to be withdrawn.
• The WPI dispute should be dismissed on discretionary ground pursuant to s 7.20 of the Motor Accident Injuries Act 2017 (MAIA) because the Insurer had not provided medical evidence that the impairment was below the threshold.

The Claimant’s dismissal application was referred to a PIC Member for determination.

The Member’s Decision

The Member declined to dismiss the WPI Dispute lodged by the Insurer.

The Member found that the Insurer was not bound by its Internal Review determination, for the following reasons:

• Contrary to the Claimant’s Submissions, a concession that the Claimant’s WPI exceeds 10% does not equate to a partial admission of liability. There is a distinction between “liability for a claim” and “the amount of damages for that liability“. A Claimant with greater than 10% WPI would not be entitled to any damages if there is no liability.
• The Claimant’s position was also inconsistent with s 7.17 of MAIA, which provides that a “medical dispute” is “a dispute between the Claimant and the Insurer about a medical assessment matter“. Such a dispute might arise at any time, when further information becomes available. In the present dispute, the Insurer obtained information, after the Internal Review, which indicated that the Claimant’s right ankle was not injured in the motor accident.
• Section 4.12 of MAIA requires an assessment under Division 7.5 where there is a dispute, as defined by s 7.17, about whether the Claimant’s WPI exceeds the threshold. Neither ss 4.12 nor s 7.17 suggest that they are subject to the Internal Review procedure.
• The medical assessment provisions in Division 7.5 of MAIA specifically allow for a medical dispute to be “re-opened” when further relevant information comes to light which can affect the outcome of the medical dispute. This provides contextual support for the notion that the parties are not necessarily bound by prior assessments. It follows that the Claimant’s argument that an Insurer is bound by the outcome of an Internal Review, even in the face of new information, was flawed.

The Member also declined to dismiss the dispute pursuant to s 7.20(3) because he concluded, on the evidence, that a genuine dispute existed regarding the cause of any right ankle impairment and the outcome of that causation dispute would affect whether the Claimant’s accident-related impairment exceeded 10% or not. In coming to this conclusion, the Member found that an Insurer is not bound to a WPI assessment conducted by its own qualified doctor

Key Learnings

The decision in Leverrier is an important one for parties to a medical dispute under the MAIA scheme.

Claimants frequently try to argue that Insurers are bound, for all time, by the decisions they make during the claims process, including with respect to critical decisions like threshold injury and WPI. As the Member noted in this matter at [83] [84], the Insurer is required to make those decisions in accordance with strict time frames, when information about the issue in dispute is frequently incomplete. It would be unfair to preclude the Insurer from withdrawing any concessions it had made at an earlier stage in the claims process when new information comes to light.

The Member also made a telling point that a party to a medical dispute before the PIC has rights to review and further assessment. In that context, it stands to reason that Insurer is entitled to review or further assess its own decisions as new information emerges.

Finally, the Member also confirmed the prior decision in Atwal v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPIC 440 that an Insurer is not bound by a WPI assessment conducted by its own qualified medical expert, particularly when that assessment is flawed. Our Case Note on Atwal can be accessed here.

If you have a query relating to any of the information in this case note, or would like to discuss a similar matter of your own, please don’t hesitate to get in touch with CTP Insurance Principal, Peter Hunt, today.

Additional McCabes Resources

• MC PIC Decision of the Week
• MC MAIA Toolkit
• The Proper Lookout Podcast
• MC Ready Reckoner