Unravelling the Mind: The Impact of Pre-Existing and Secondary Psychological Injuries on WPI assessments

Further to McCabes’ Bulletin on 16 July 2024 found here, we discuss the recent NSW Supreme Court decision of Matheson v Baptistcare (Matheson[1]).

Summary

• The worker appealed Medical Assessor (MA), Dr Baker’s whole person impairment (WPI) assessment contained in a Medical Assessment Certificate (MAC) for her psychological
• The appeal was referred to a Medical Appeal Panel (MAP).
• The MAP assessed a baseline 17% WPI reduced to 13% WPI, deducting:
  • 2.5% WPI for secondary psychological injury under s 65A(2).[2]
  • 1.5% for pre-existing psychological condition under s 323.[3]
• This meant the worker did not reach the 15% WPI lump sum compensation and work injury damages thresholds.
• The worker sought judicial review of the MAP’s decision (the decision).
• Basten AJ set aside the decision, referring the matter back to the Personal Injury Commission (PIC) for reassessment.

Section 323 – Deduction for previous injury or pre-existing condition or abnormality

The worker submitted there was no finding by the MAP of any pre-existing condition (other than that giving rise to the secondary psychological condition) at the time of the primary psychological injury in 2013.

The assessment by the MAP for pre-existing condition was required to be undertaken in accordance with the Permanent Impairment Rating Scales (PIRS). Assessed on that basis, no permanent impairment was identified so the 1.5% WPI reduction should not have been made.

The Court referred to [11.10] of the Guidelines[4], dealing specifically with the calculation of a “pre- existing impairment”, for a psychological injury under s 323. The Court found the Guidelines are given mandatory statutory effect, in general terms by s 322(1) and, specifically in relation to the calculation of a pre-existing condition, by s 323(4) of the 1998 Act.

The court noted the only reference to PTSD in the prior history was in relation to a motor accident in 1990, which the assessors found did not affect the worker’s ability to drive or study and she continued her career for many years. The court also referred to her evidence that the condition had a ‘negligible contribution’ to the separation of her marriage in 2000.

Although MA, Dr Baker, addressed the six PIRS categories identified in [11.11] by reference to the accompanying tables, the Court noted he did not expressly identify any class rating in the tables. This prevented a finding of any level of pre-existing impairment in accordance with the Guidelines. As there was no assessment in accordance with the Guidelines on the impact of the MVA at the time of the primary psychological injury (some 23 years later), the deduction was based on an “assumption of a pre-existing condition”. The deduction of 1.5% WPI therefore should not have been made.

Section 65A(2) -Reduction for (prior) secondary psychological condition

The Court observed that as the secondary psychological condition occurred in 2012, before the primary psychological injury in 2013, on one view, both s 323 and s 65A(2), ‘semantically’, may apply.

However, the MAP’s approach of treating the assessment of the secondary psychological injury as a fraction (or 2.5%) of the total (17%) WPI was incorrect. It was required to determine the impact of pre- existing injury on current WPI by undertaking a comparative exercise consistent with the Guidelines.

The Court reasoned this “… is a subtractive approach, requiring a deduction from the starting point of whole person impairment”. The Court observed:

“The primary consideration in relation to the secondary injury, namely fear of pain, would readily have fallen within PIRS Table 11.6, dealing with “employability”. That exercise was not undertaken by the appeal panel because the classes provided in relation to the various scales for the primary injury were not identified. Not only did the appeal panel not attach a form setting out the PIRS assessments, but it did not, descriptively, explain its reasoning by reference to the tables in the Guidelines.”

Therefore, the MAP had not sufficiently disentangled symptoms and impairments resulting from both the primary and secondary psychological conditions and the 2.5% WPI deduction was incorrect.

The Court also held that the same process applies for pre-existing secondary psychological injury/condition that are asymptomatic as s 323 cannot operate in isolation ‘from the rest of the section, or the previous section’. It requires a causal connection between a previous injury and the existing state of impairment. There was no inconsistency between the terms of s 323(1) and the Guidelines, ‘especially [11.10]’ which details how that pre-condition may be satisfied.

Practical tips

Case managers handling workers compensation files are all too familiar with the growing volume and complexity of psychological injury claims.

The claims can involve both primary and secondary psychological injuries, with pre-existing psychological injury or conditions. Added to this, are the claims that also have subsequent non-work- related injuries/conditions/events, that may impact a worker’s psyche.

Unravelling all of this requires an accurate method of assessment. As Matheson illustrates, a correct method of assessment can impact WPI. This can, in turn, impact whether the 15% WPI lump sum compensation and WID thresholds are met.[5]

1. Claims should be screened early and monitored throughout, to identify if there is a primary and/or secondary psychological injury and the existence of any prior psychological injury, condition, or

2. For prior injuries/conditions, confirm the nature of the injury (including if it is in fact a prior secondary injury) the diagnosis (against applicable diagnostic criteria); and obtain information on its behavioural/functional impact.

3. For secondary psychological injury:

• Confirm if it occurred prior to the primary injury and whether it was asymptomatic.
• Confirm if it occurred at the time of and/or in response to the primary psychological injury.
• Obtain information/evidence on the level of functioning before and after a secondary injury to assist an assessor in distinguishing its impact on the primary psychological injury.

4. Although Matheson did not involve subsequent non-work-related injuries/events/conditions, claims should be screened and monitored throughout, as this may require a WPI apportionment, and may also impact whether a worker satisfies compensation WPI thresholds.

5. Ensure letters of instruction to Independent Medical Examiners and review of WPI assessments in a MAC, MAP Outcome, and IME reports are based on correct assessment method/instructions requiring the Application of the Guidelines/PIRS, to determine the impact on current impairment from pre-existing (including asymptomatic/ prior secondary) injuries; and secondary injuries, that may occur at the time of/in response to the primary injury.

• This should include requests for separate assessments of WPI due to primary and secondary psychological injury, as required, in accordance with the Guidelines/PIRS.
• A further separate question as to whether any WPI is due to subsequent non-work-related stressors, conditions or factors, can be included if applicable. This does not fall within section 323 or section 65A(2). It involves apportionment of WPI and depending on the facts of the case, may require application of the Oakley Principles[6].

Contributor

Fadi Khousho, Law Graduate

Footnotes

[1] Matheson v Baptistcare [2025] NSWSC 213.

[2] S 65A(2) of the Workers Compensation Act 1987 (the 1987 Act).

[3] S 323 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act).

[4] NSW workers compensation guidelines for the evaluation of permanent impairment.

[5] In Matheson, the Court noted that a potential result of the secondary psychological injury impacting the worker’s ability to work, may have warranted a reduction from class 4 to 3 for PIRS category employability. This would have reduced the WPI from 17% to 15%. If the baseline WPI had been 1% lower in those circumstances, this would bring the worker below the s 65A(3) and s 151H lump sum compensation and work injury damages thresholds.

[6] State Government Insurance Commission v Oakley (1990) 10 MVR 570 as applied by the NSW Court of Appeal in Secretary, New South Wales Department of Education v Johnson [2019] NSWCA 321.