Better the Wrongs Act we knew: Victorian Court of Appeal confirms courts must accept multiple Medical Panel determinations

Introduction

Through its recent decision in Citywide Service Solutions Pty Ltd v Rosata; Kabbout v Crown Melbourne Ltd [2023] VSCA 281, the Victorian Court of Appeal[i] has restored what had been a tacit understanding in personal injury litigation – that Part VBA of the Wrongs Act 1958 (Vic) (Act):

• permits multiple defendants to make separate referrals to a Medical Panel to determine whether, after service of a certificate of assessment, a plaintiff’s whole person impairment (WPI) assesses as a “significant” injury to permit a claim for non-economic loss (NEL) damages; and
• precludes a defendant who has accepted, or been deemed to accept, a certificate of assessment from relying on a favourable determination obtained by another defendant in the same proceeding.

The case turned on the construction of s 28LZH of the Act, and how other provisions in Part VBA impact on that statutory construction.

Principles

• Section 28LE of the Act prohibits a plaintiff from claiming NEL damages in any proceeding unless they have suffered “significant injury”.
• Part VBA of the Act establishes the process by which a plaintiff can establish they have a “significant injury”, and by which defendants can have a Medical Panel determine whether that is, in fact, the case.
• This case overturns a County Court of Victoria decision[ii] which was inconsistent with the existing acceptance that, where a defendant is joined late to ongoing litigation, the new defendant is entitled to make a separate Medical Panel referral once served with a certificate of assessment by the plaintiff.
• The decision reinstates the position that s 28LZH of the Act, when read in the context of Part VBA of the Act as a whole, requires a court to accept multiple Medical Panel determinations made in response to different referrals by different defendants, even if those determinations are inconsistent.
• The decision also confirms that a defendant who has accepted, or been deemed to accept a certificate of assessment served by a plaintiff, cannot rely on a favourable Medical Panel determination obtained by another defendant in the litigation.
• Defendants and their insurers should always give serious consideration to referring the question of a plaintiff’s WPI assessment to a Medical Panel for determination. This is particularly important when joined at a later stage, given the potential for a plaintiff’s injury (and therefore their WPI) to improve over time.

Background

The decision relates to two incidents the subject of separate proceedings in the County Court of Victoria.

Luigi Rosata alleged suffering injury following a trip and fall on 8 May 2020 on a footpath in Kensington in the City of Melbourne (Council).  In 2021 the Council made a Medical Panel referral under , and in November 2021 the Panel determined Rosata’s WPI met the threshold to claim NEL damages.

After proceedings were on foot, Rosata joined the Council’s footpath maintenance contractor (Citywide). Citywide made a second Medical Panel referral, and in November 2022 the Panel determined Rosata’s WPI did not meet the relevant threshold.

Given the inconsistent Medical Panel determinations, the County Court was asked to determine a preliminary question: should the Court accept the November 2021 determination in relation to Rosata’s claim against Citywide?

On 28 April 2023, the judge held that Citywide was bound by the earlier November 2021 determination.[iii] This was inconsistent with the understood application of Part VBA at the time.

Samih Kabbout alleged suffering injury following a slip and fall at Crown Melbourne (Crown).  He sued Crown, and in December 2021 a Medical Panel determined Kabbout’s WPI did not meet the threshold.  Subsequently, Kabbout served a certificate of assessment on Crown’s cleaning contractor (Ikon).  Ikon failed to respond to the certificate within the 60 day time limit imposed by s 28LWA of the Act and was deemed to have accepted the certificate, entitling Kabbout to claim NEL damages from Ikon.

In light of the decision in Rosata’s proceeding and following an application by Ikon in June 2023, the Court referred a question to the Court of Appeal for consideration: was the County Court required to accept the determination obtained by Crown in respect of Kabbout’s claim against Ikon?

Given the similar questions of statutory interpretation raised, the Rosata appeal and the Kabbout referral were heard and decided together.  The Court of Appeal had two issues before it:

1. whether multiple (and inconsistent) Medical Panel determinations can co-exist within the same proceeding; and
2. whether a determination that an injury is not ‘significant’, on referral from one defendant, can be relied upon by another defendant who would otherwise be deemed to have accepted that the injury is ‘significant’.

Decision

Rosata, the Council and Ikon each argued that it should not be possible to have differently binding conclusions about whether a plaintiff’s WPI is “significant” in the one proceeding.

They argued that there can only be one Medical Panel determination binding on the whole of a plaintiff’s claim and on every defendant to that claim, and that the determination made first in time must be accepted, regardless of whether there has been compliance with the procedures in Part VBA of the Act.

If the situation was otherwise, they submitted, there would be “anomalous outcomes” contrary to the purposes of the Act and leading to distortions in the entitlements to contribution between defendants.

The Court of Appeal unanimously rejected those submissions and set out more than a dozen reasons why they were wrong.  These principally related to the proper statutory interpretation of s 28LZH of the Act and included:

• Sections 28LR, 28LWC and 28LZB each contemplate the possibility that the issue can be resolved differently with respect to different defendants.[iv]
• The Convenor of Medical Panels does not have power to refuse a referral by a later defendant on the basis that there is an earlier determination for the same plaintiff.[v]
• There is nothing in Part VBA preventing later Medical Panels from deciding the issue differently from an earlier Medical Panel.[vi]
• While a purpose of Part VBA is to promote expeditious resolution of the issue of whether a plaintiff is entitled to claim NEL damages, quick resolution is not to be achieved at the expense of ensuring procedural fairness to all defendants, including by making a referral and submissions to a Medical Panel.[vii]
• S 28LZM allows a court to give effect to any Medical Panel determination, even if there is more than one and they are inconsistent, because the two limbs of s 28LZH contemplate that possibility.[viii]
• The proper construction of s 28LE (which prohibits recovery of NEL damages unless the injury is “significant”) where there is more than one defendant, is that a plaintiff can only recover NEL damages against a specific defendant if the plaintiff “has satisfied the significant injury requirements of pt VBA in relation to that [defendant]“.[ix]
• A global reading of Part VBA did not persuade the Court that Parliament intended that a Medical Panel determination should bind a defendant which has not been afforded procedural fairness with respect to that determination.[x]
• The provisions of Part VBA entitle each defendant to make a Medical Panel referral, notwithstanding that the result may be inconsistent determinations, that contributions between defendants may be distorted, and that the outcomes may be more difficult for the parties to handle.[xi]

Overturning the decision of the County Court in the Rosata proceeding, the Court of Appeal confirmed that the proper construction of s 28LZH meant that a defendant joined to a proceeding later is not bound by a Medical Panel determination arising from a referral by a separate defendant.

It also confirmed that a defendant which fails to comply with statutory timeframes and is deemed to accept that a plaintiff’s injury is “significant” will not be able to rely on an earlier Medical Panel determination that the injury was not “significant”.

Accordingly, Rosata could claim NEL damages against the Council, but not Citywide – and Kabbout could claim NEL damages against Ikon, but not Crown.

Why this case is important

The quantum of NEL damages routinely awarded in Victoria is on the rise.  Although capped at $713,780.00, even modest injuries are frequently awarded $100,000.00 or more before consideration of other heads of damage.

Therefore, the impact on a defendant’s exposure to damages (if that defendant can rely on a favourable Medical Panel determination) is substantial and growing.  Some plaintiffs may even abandon their proceedings if most of their claim comprises NEL damages.

Defendants and insurers served with certificates of assessment must give serious consideration to the notable upside from a successful Medical Panel referral.  Referrals can be costly, and inconsistent determinations can cause complexity and reduce the chances that a claim settles at mediation.

This complexity arises particularly in cases where a plaintiff can claim NEL damages from one defendant with a relatively low contribution exposure, but cannot claim such damages against a defendant with a much higher risk exposure, potentially changing the overall “contribution” of those defendants.

The result in this case highlights how markedly an injured plaintiff’s claim can differ against separate defendants.  To reduce cost and complexity, in cases where there are multiple defendants, there will often be merit to all defendants making a joint referral.

Even if a defendant is joined late and there is an earlier Medical Panel determination, the defendant (and its insurers and lawyers) must be aware that a plaintiff must comply with the procedures in the Act before NEL damages can be claimed, even if the injury has previously been determined as “significant”.  They should be cognisant that injuries may improve over time and the determination of an earlier Medical Panel does not guarantee a similar outcome before a future Medical Panel.

Experienced legal advice on whether to make a Medical Panel referral, and what to include in submissions, will be essential to give defendants the best chance of excluding liability for a sizeable portion of most claims for personal injury.

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 Insurance Principal Richard Johnson today.

[i] Beach, Osborn JJA and Forbes AJA

[ii] Rosata v City of Melbourne and Anor (Ruling) [2023] VCC 630

[iii] Ibid.

[iv] Citywide Service Solutions Pty Ltd v Rosata; Kabbout v Crown Melbourne Ltd [2023] VSCA 281, [85].

[v] Ibid [86].

[vi] Ibid [87].

[vii] Ibid [90].

[viii] Ibid [92].

[ix] Ibid [94].

[x] Ibid [95].

[xi] Ibid [100].