Review Panel Referrals – Can’t Get No (Contingent) Satisfaction: Insurance Australia trading as NRMA Insurance v Liu [2023] NSWSC 1604

In Brief

• The President of the Personal Injury Commission and the President’s delegate are not obliged to provide reasons for a decision to refer a medical assessment to a review panel.
• Despite the absence of any obligation to give reasons, any reasons which are given may reveal error on the face of the record.

Facts

In Insurance Australia trading as NRMA Insurance v Liu [2023] NSWSC 1604, the matter before the Supreme Court was the insurer’s application for judicial review of the President’s Delegate’s decision to refer a medical assessment to a review panel.

The claimant was injured in a motor vehicle accident and was assessed as having less than 10% whole person impairment by a PIC medical assessor. On the claimant’s application, the President’s Delegate arranged for the medical assessment to be referred to a review panel pursuant to s 7.26 (5) of the MAI Act.

Section 7.26 (5) provides that the referral to a review panel is to be made only if “the President is satisfied that there is reasonable cause to suspect that the medical assessment was incorrect in a material respect having regard to the particulars set out in the application”.

The President’s Delegate recorded: “… on balance, if the claimant’s version of events is accurate, I am satisfied that they give rise to a reasonable cause to suspect that the medical assessment was incorrect in a material respect”.

The insurer sought judicial review of the President’s Delegate’s decision on the following grounds:

1. The President’s Delegate erred in failing to provide reasons for the decision.
2. Insofar as the President’s Delegate did provide reasons, the reasons demonstrate an error of law in the approach taken.
3. The insurer was denied procedural fairness.

Supreme Court Reasons

Justice Dhanji rejected the insurer’s Grounds 1 and 3 but found for the insurer on the basis of Ground 2.

Grounds 1 and 3

In relation to Ground 1, the Supreme Court had found in an earlier decision, Pinarbasi v AAI Ltd t/as GIO [2023] NSWSC 80 (“Pinarbasi“), that reasons are not required when the President or the President’s Delegate decides to refer a medical assessment to a review panel pursuant to s 7.26(5) of the MAI Act. The insurer tried to circumvent this decision by arguing that the court in Pinarbasi did not consider r 78 of the PIC Rules, which the insurer argued imposes an obligation to provide reasons.

Justice Dhanji confirmed the Court’s dicta in Pinarbasi that a decision made pursuant to s7.26(5) is an administrative decision, for which at common law there is no general obligation to give reasons.

Justice Dhanji addressed the insurer’s argument regarding r 78 of the PIC Rules by distinguishing “the President” and “the Commission”. Rule 78 applies to decisions made by “the Commission”, whereas the decision maker in section 7.26(5) is “the President”. The two entities are separately defined in both the MAI Act and the PIC Act. Justice Dhanji concluded that r 78 does not apply to the function under s 7.26(5). Consequently, the insurer failed to circumvent Pinarbasi, and Ground 1 failed.

Ground 3 also failed as it is premised on Ground 1.

Ground 2

Justice Dhanji considered whether there was error based on the Delegate’s conclusion and whether there was error based on the reasons that were given.

Justice Dhanji rejected the insurer’s contention that the Delegate’s conclusion was unreasonable and necessarily contained error. This was because the claimant had put forward bases on which it was open to conclude that the medical assessment was incorrect in a material respect.

However, Dhanji J found jurisdictional error on a strict reading of wording of the Delegate’s reasons.

The Delegate stated: “if the [claimant’s] version of events is accurate, I am satisfied that they give rise to a reasonable cause to suspect that the medical assessment was incorrect in a material respect“.

On a strict reading of this sentence, the Delegate was not satisfied of material error, because the Delegate’s satisfaction was contingent on the claimant’s version of events being accurate. The Delegate failed to answer the question asked of her and the insurer’s Ground 2 was established.

Justice Dhanji acknowledged that the Delegate’s reasoning could be reworded into an acceptable version. However, his Honour stated that to do so involves an element of guesswork. Therefore, his Honour exercised the discretion to award the insurer the relief sought.

The claimant’s review application was remitted to the President or a delegate of the President for determination.

Key Learnings

The decision in Insurance Australia trading as NRMA Insurance v Liu confirms that the President’s Delegate is not required to give reasons when deciding whether or not to refer a medical assessment to the review panel. A failure to give reasons, alone, does not disclose jurisdictional error.

If the Delegate provides reasons, however, those reasons should be carefully scrutinised to determine whether they disclose jurisdictional error, such as asking the wrong question or considering irrelevant material.

This decision was particularly interesting because the Court accepted that there may have been no jurisdictional error had the reasons been worded differently. Justice Dhanji observed, however, that it’s not the Court’s role to guess what the Delegate meant.