Helen Huang
Special Counsel
CTP Insurance, Insurance
Insurers Not Bound by Threshold Injury Admissions
2 December, 2024
In Brief
- Insurers are not bound by any admission that a Claimant sustained a non-threshold injury because such an admission does not automatically result in the Insurer being liable to pay the Claimant damages.
- Insurers may admit that the Claimant sustained a non-threshold injury whilst simultaneously seeking a review of the Medical Assessor’s threshold injury determination.
Facts
On 29 November 2024, the Personal Injury Commission published its decision in QBE Insurance (Australia) Limited v Gilbey [2024] NSWPIC 633 (29 October 2024).
The Claimant was involved in a motor accident on 13 July 2023 when she was travelling as a back seat passenger, when the vehicle hit a kangaroo, then collided with a tree.
The Claimant alleges she sustained a non-threshold injury.
A dispute arose and the matter proceeded to assessment at the Commission.
At first instance, the PIC Medical Assessor determined she sustained a non-threshold psychiatric injury.
The Insurer then issued a further liability notice accepting the PIC Medical Assessor’s finding that she sustained a non-threshold injury. The effect of this liability notice meant the Claimant was entitled to ongoing statutory benefits beyond 52 weeks.
However, the Insurer then lodged a review application.
After filing the review application, the Insurer issued a further liability notice disputing the Claimant sustained a non-threshold injury.
The Claimant sought to have the Insurer’s application dismissed on the grounds there was no medical dispute in respect of the threshold injury issue within the meaning of section 7.17 of the Act.
The Principal Member’s Reasons
The Principal Member set out the principles of statutory construction in AAI Ltd v Leverrier [2024] NSWPIC 548 at [50]– [53].
The Principal Member rejected the Claimant’s application to dismiss the Insurer’s review application for the following reasons:
- The Insurer’s admission the Claimant suffered a non-threshold injury satisfies a necessary statutory pre-condition for an award of damages but does not constitute an admission that there is a pecuniary obligation to pay the Claimant some damages under section 4.4 of the Act.
- The Insurer is entitled to pursue its rights of review particularly where the application was filed within the relevant period in accordance with the procedures in section 7.26 of the Act.
- There is no statutory basis to infer the acceptance of the non-threshold injury by the Insurer disentitling or abrogating the Insurer’s right to pursue a review because section 7.26 of the Act provides a clear statutory right to review the medical assessment.
The Principal Member determined the Insurer’s review application should proceed to the President for determination pursuant to section 7.26(5) of the Act.
Key Learnings
The decision in Gilbey is an important one for both Insurers and Claimants.
The decision confirms that an insurer is not bound by a threshold injury admission for all time. The PIC Member distinguished an admission of non-threshold injury from a general admission of liability on the basis that the former does not result in the insurer automatically being liable to pay the Claimant damages. The PIC Member, therefore, distinguished the decision of Nominal Defendant v Gabriel [2007] NSWCA 52 which held that an insurer is bound by its liability decisions prior to the commencement of court proceedings.
The decision is also significant for claimants because it allows insurers to admit non-threshold injury, and pay statutory benefits, pending the outcome of an Insurer’s application to review a threshold injury decision it does not agree with.
The decision in Gilbey adds to a series of recent PIC Decisions which clarify the dispute resolution processes in the Act, including:
- AAI Limited t/as GIO v Leverrier [2024] NSWPIC 548 – An Insurer is not bound by its own Internal Review Certificate in the face of new information. Our Case Note can be found here.
- Atwal v Insurance Australia Limited t/as NRMA Insurance [2024] NSWPIC 440 – An insurer is not bound by its own medico-legal assessment of WPI where the assessment is flawed. Our Case Note can be found 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 Special Counsel Helen Huang today.
