Threshold Injuries – Court of Appeal Settles the Skin Injury Debate

In Brief

• A Claimant is not entitled to ongoing statutory benefits or common law damages if the only injuries they sustain in a motor accident are threshold injuries.
• Section 1.6 of the Motor Accident Injuries Act 2017 (MAIA) provides that a “soft tissue injury” is a “threshold injury“.
• “Soft tissue” has the significant and characteristic feature of connecting, supporting or surrounding other structures or other organs of the body in a physical sense.
• The skin, despite being an organ, falls within the definition of “soft tissue” because its significant and characteristic feature is to physically connect, support or surround other structures or other organs of the body.
• Other organs, even if comprised of soft tissue, will not fall within the definition of “soft tissue” if they do not physically connect, support or surround other structures or organs.

Facts

The Court of Appeal handed down its decision in Allianz Australia Insurance Limited v Estate of the Late Summer Abawi on 2 May 2025.

The Claimant was injured in a motor accident on 8 December 2017.

The Medical Review Panel accepted that the accident caused the Claimant a range of soft tissue injuries, which were determined to be threshold injuries.

The Medical Review Panel, however, also found that the accident caused lacerations to each of the Claimant’s wrists, which were determined to be non-threshold injuries.

The Insurer’s application for Judicial Review of the Review Panel’s decision failed.

The Insurer appealed to the Court of Appeal.

The Definition of “Soft Tissue”

Section 1.6(1)(a) of MAIA provides that a soft tissue injury is a threshold injury.

Section 1.6(2) of MAIA defines “soft tissue” as “an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage“.

In general terms, the definition of injury to “soft tissue” contains four components:

1. Controlling Words – Injury to tissue that connects, supports or surrounds other structures or organs of the body.
2. Non-Exhaustive Examples of Soft Tissue – Muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes
3. Exclusion #1 – Injury to nerves
4. Exclusion #2 – Complete or partial rupture of tendons, ligaments, menisci or cartilage.

As the Court of Appeal observed at [15], the skin is included in neither the list of examples of soft tissue nor the list of exclusions.

The Court of Appeal Decision

Core Reasoning

The Court of Appeal concluded that an injury to the skin is a “soft tissue” injury and, therefore, a “threshold injury“, for the following reasons:

• The skin is both “tissue” and an “organ” [17].
• The word “other” in the phrase “other structures or organs” qualifies both “structures” and “organs” [33]. The controlling words in s 1.6(2), therefore, effectively read:
  “…injury to tissue that connects, supports or surrounds other structures or [other] organs of the body…
  
• Organs are capable of being soft tissue provided they meet the limitation in the controlling words “connects, supports or surrounds“. Most organs, however, are not “soft tissue“, pursuant to the definition, because they do not connect, support or surround other structures or other organs [34].
• The words “connects, supports or surrounds” should be read in a physical, rather than a biological sense [38]. The heart and the brain, for example, support the entire body, in a biological sense, but support no part of the body, in a physical sense.
• A “significant and characteristic feature of [soft tissue] is connecting, supporting or surrounding other structures or organs in a physical sense” [44].
• The Claimant conceded that a significant and characteristic feature of the skin is connecting, supporting or surrounding other structures or organs in a physical sense [72].

Context and Purpose

The Court of Appeal made the following additional points regarding context and purpose:

• Extrinsic Material – neither the Motor Accident Injuries Regulation 2017 nor the Motor Accident Guidelines are relevant to the interpretation of the definition in s 1.6(2) because neither of those instruments existed, even in draft form, when the Act was passed and, therefore, provide no aid in divining Parliament’s intention [46 to 51].
• Floodgates – the Insurer’s argument that the floodgates would open if a mere skin injury was interpreted to be a non-threshold injury could not be maintained because there was no evidence before the Court to support the submission that most motor accidents cause some kind of skin injury [52 to 57].
• Objects of the Act – arguments based on the objects of the Act in s 1.3 are unpersuasive because there are multiple objects and they say nothing about how the definition should be construed [58 to 61].
• Parliament’s Motivation – the Claimant’s argument that the threshold injury gateway was introduced to address “claim farming practices” might explain Parliament’s motivation but does little to advance debate on how the words in the definition should be interpreted [64].
• Uncertainty re Nerve Injuries – the fact that the Insurer’s construction of the definition of “soft tissue” might create uncertainty with respect to injuries to nerves is a function of the definition rather than a reason to reject the Insurer’s construction [65 to 67].
• Anomalous Outcomes – the accepted fact that the definition of “soft tissue injury” creates anomalies does not assist in construing the definition. Neither construction advanced by the parties, in this dispute, led to odd or anomalous results. Furthermore, even if the “threshold injury” filter does not exclude all minor injuries, the filter’s role is not undermined if it filters out a significant proportion of those injuries [68 to 70].

Why This Case is Important

Are Skin Injuries Threshold Injuries?

The minor / threshold injury gateway was introduced into the CTP scheme when MAIA commenced 7.5 years ago on 1 December 2017. Stakeholders have been debating ever since whether the minor / threshold injury gates were open or closed for claimants with a skin laceration, primarily because the skin is both soft tissue and an organ.

The Court of Appeal’s decision in Abawi settles the debate.

The minor / threshold injury gates are closed to a claimant with a skin injury and they are entitled to neither ongoing statutory benefits beyond 52 weeks nor damages under common law.

Is There A Guiding Test?

The Court of Appeal stated at [37]:

“Moreover, given a choice between reading the words “connects, supports or surrounds” as playing a significant or an insignificant role in the definition, the answer is clear. It is those words which have the central role to play in delineating the types of tissue encompassed by the provision. That work is not done by the words in brackets, let alone by the exclusions. As Allianz pointed out, the types of tissue identified in brackets in the definition are examples which may be soft tissue; they are not necessarily soft tissue. The examples include “muscles”. Yet the heart can be described as a muscle, and there is no dispute it is not encompassed by the definition. The same might be said of the tongue. The examples thus throw some, but limited, light on the sorts of body components meant to be included in the definition. Nor do the exclusions at the end of the definition – an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage – throw significant light on the issue.” 

When considering whether a particular injury is an injury to soft tissue or not, the Court of Appeal has made it clear that:

• The central question is whether the tissue in question “connects, supports or surrounds” other structures or other organs, in a physical sense.
• The words in the brackets – “muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes” – are merely examples of the types of tissue which can be soft tissue.
• The exclusions – “injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage” – only serve to define what is not a soft tissue injury but cannot be used to define what is a soft tissue injury.

For any contentious body part, therefore, the guiding question is whether that body part has the characteristic of physically, connecting, supporting or surrounding other structures or other organs.

What About Other Organs?

The Court of Appeal faced a significant challenge. Common sense suggests that Parliament could not have intended that a Claimant satisfies the threshold injury test if their only injury was a mere laceration to the skin. On the other hand, Parliament also most likely intended that an injury to an organ is a non-threshold injury.

The Claimant effectively argued that an injury to any organ, including the skin, is not a soft tissue injury and is, therefore, not a threshold injury.

The Insurer, however, advocated a more nuanced approach which required an evaluative judgment of the medical nature and physical function of the organ in question.

As Kirk JA stated during argument, “the heart of this issue is the heart“.

How can an injury to one organ comprised of (colloquially) soft tissue, such as the skin, be a threshold injury whilst an injury to another organ also comprised of (colloquially) soft tissue, such as the heart, be a non-threshold injury? How can the skin be distinguished from the heart when viewed through the prism of the definition of “soft tissue” in s 1.6(2)?

The Court of Appeal observed at [40] that the Claimant’s argument had some attraction because it provided a simple test which leads to greater certainty.

The Court of Appeal concluded however, also at [40], that:

“That being said, the judgment does not appear likely to be difficult in most cases, especially once the issue is expressed in terms of a significant and characteristic feature rather than assessing what is a dominant or primary function. As already noted, in practice most human organs will generally have some distinct, specific and readily identifiable function, and any role they play in acting to connect, support or surround other structures or organs in a physical sense is unlikely to be a sufficiently significant feature as to warrant bearing that characterisation.”

It follows that there is no hard and fast rule that organs are either included or excluded from the “soft tissue” definition. Each injury must be evaluated on its own merits. The guiding question remains whether the particular organ in question has the “significant and characteristic feature” of physically connecting, supporting or surrounding other structures or other organs, as distinct from a more “dominant or primary function“.

Other than the skin, it is difficult to envisage another organ which has that characteristic.

An injury to an organ, however, will be a threshold injury if that particular organ can be characterised as physically connecting, supporting or surrounding other structures or other organs.

And What About Nerve Injuries?

The Claimant argued that if the skin is found to be “soft tissue“, there will still be uncertainty because the debate will move to whether the particular skin injury involves an injury to the nerves or not.

As indicated, the definition of “soft tissue” excludes nerve injuries and renders them non-threshold.

The Court of Appeal, at [67] recognised the force behind the Claimant’s argument but found that any uncertainty arising from nerve injuries was a consequence of the statutory choice to exclude those injuries from the definition. The Court of Appeal also noted that whether a particular laceration involves an injury to the nerves is capable of medical assessment.

Whilst not covered by the Judgment, we observe that the statutory exclusion in s 1.6(2) requires an injury to the nerves, rather than a momentary pang caused by the nerves being aggravated or irritated but not damaged. We respectfully suggest that “injury to nerves” requires evidence of nerve damage which is medically verified via numbness, muscle weakness or ‘dysaesthesia’ to the skin. The nerves merely being “involved” or “affected” is not sufficient.

Regulation Power

The Court of Appeal’s decision has effectively settled the question of whether injury to the skin is a threshold injury or not. It is.

That level of certainty is welcomed.

Question marks remain, however, over whether consequential surgery is relevant to whether a claimant has sustained a threshold injury (Mandoukos) and whether Parliament really intended that damage to spectacle glasses or other aids or equipment, alone, should allow a claimant through the threshold injury gateway.

The regulation power in s 1.6(5) of MAIA remains available to bring clarity to these questions.

If you have a query relating to any of the information in this case note, 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
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