Whether a laceration to the skin is a threshold injury?

In Brief

• A threshold injury is defined by section 1.6 of the Motor Accident Injuries Act 2017 (MAIA).
• Section 1.6(1) of MAIA states a threshold injury is a soft tissue injury or a psychological or psychiatric injury that is not a recognised psychiatric illness.
• A “soft tissue injury” is defined in section 1.6(2) to be 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.
• Only injuries to the connective tissue of the body fall within the definition of “soft tissue injury” in s 1.6.
• Given that the skin performs functions above and beyond that of connective tissue – including regulating temperature, protecting from ultraviolet radiation and retaining water – an injury to the skin is not a soft tissue injury and is, therefore, an above threshold injury.

Facts

On 5 April 2024, the Personal Injury Commission published its decision in Abawi v Allianz Australia Insurance Limited [2024] NSWPICMP 158.

The Claimant, now deceased, was injured in a motor vehicle accident on 8 December 2017. According to the ambulance report, she suffered a 3 cm superficial laceration to her left wrist.

Assessor Home, the original medical assessor, carried out the assessment on the papers. He determined that the accident aggravated pre-existing cervical and lumbar spine conditions and caused soft tissue injuries to the Claimant’s left and right shoulder and left and right wrists. Assessor Home certified that these injuries fell within the definition of a “threshold injury” in s 1.6 of MAIA.

Assessor Home was not satisfied the accident caused a left wrist laceration because of insufficient evidence.

The Claimant argued the laceration to the left wrist was caused by the accident and is a non-threshold injury and sought review of the Certificate of Assessor Home.

The Insurer was satisfied the accident caused a laceration to the left wrist but did not accept that injury was a non-threshold injury because the Claimant refused additional treatment from the ambulance personnel or transportation to the hospital. The Insurer argued the laceration was a threshold injury, as defined by s 1.6 of the Act, because there was no evidence of any injury to the nerves and because the injury did not require surgery.

The President’s Delegate was satisfied there was reasonable cause to suspect the assessment of Assessor Home was incorrect in a material respect and the matter was referred to the Review Panel.

The parties agreed to confine the issue of the causation of the left wrist laceration only before the Review Panel under section 7.25 of the Act.

The Review Panel’s Determination

The sole issue for determination before the Review Panel was whether the laceration to the left wrist was a threshold injury.

The Review Panel rejected the reasoning in Nazari v AA Limited [2023] NSWPICMP 62. In Nazari, the Review Panel determined the claimant sustained multiple lacerations to multiple body parts which resulted in scarring. The Review Panel in Nazari determined, however, that injury to the skin constituted a soft tissue injury and, therefore, a threshold injury. The Review Panel in Nazari concluded that the objects of the Act, which included keeping premiums affordable, would not be served if a mere scratch to the skin constituted a non-threshold injury.

The Review Panel disagreed with the reasoning process in Nazari, for the following reasons:

• The Review Panel in Nazarilooked at the objects of the Act in s 1.3 of MAIA but gave undue weight to the objects in s 1.3(2)(d) – keeping premiums affordable – and s 1.3(3)(c)(iii) – ensuring stable and predictable application of the law. Section 1.3 articulates numerous objects of the Act in addition to those cited by the Review Panel in Nazari. Focussing on one or two objects, without having regard to ostensibly competing legislative purposes, is a distraction to resolving questions of statutory construction.
• The Second Reading Speech indicated that the predominant purpose of reform of the CTP scheme was to provide early and ongoing financial support to those injured in motor accidents, whereas reducing the costs of the scheme, whilst certainly one of the purposes of reform, was spoken about in generic terms.
• While statutory intent is a relevant aid to construction, it cannot be used to override unambiguous legislative language. The overriding task is to give meaning to the text of the statute.
• The legislative choice to change the phrase “minor injury” to “threshold injury” was intended to calibrate the interpretive focus from the severity of the injury to its function as a statutory precondition.

The Review Panel proceeded to dissect the definition of “soft tissue injury” in s 1.6(2).

The Review Panel made the following points:

• The parenthetical statutory exemplars in the definition of “soft tissue injury” – namely, “muscles, tendons, ligaments, menisci, cartilage, facias, fibrous tissues, fat, blood vessels and synovial membranes” – are all examples of connective tissue.
• The antecedent phrase in the s 1.6 definition of “soft tissue injury” – namely, “an injury to tissue that connects, supports or surrounds other structures or organs of the body” – is controlled by the parenthetical statutory exemplars of connective tissue referred to in the preceding bullet point. The common trait of each of these connective tissues is the role they uniquely play in orthopaedic injuries.
• The relevant type of injury constituting a “soft tissue injury” for the purposes of s 1.6(2) is injury to tissue that “connects, supports, or surrounds other structures or organs of the body“. In this context, “organs” merit separate mention in the statutory threshold definition because they are distinct from “other structures“, such as tissue.
• The inclusion of “muscle” in the parenthetical statutory exemplars of connective tissue is instructive of the legislative intention. From a medical standpoint, “muscle” is considered an organ / structure of the muscular system. The inclusion of “muscle” in the list of exemplars of connective tissue demonstrates a legislative intention to create a bespoke class or type of soft tissue injury for the purpose of the statutory threshold provision rather than a working definition against which each soft tissue comprising the human body is to be assessed.

At paragraph 56, the Review Panel further explained the use of the word “or” in the statutory definition of “soft tissue injury” by reference to a shoe:

To explain, by analogy: a shoe. Consider the definitional phrase “a shoe is a covering for the foot, made of leather or suede, having a sturdy sole and not reaching above the ankle”. “Or” in this context is not used in the “either” … “or” sense to create two categories of shoe – leather shoes or suede shoes; rather, it is used to offer possibilities for the material out of which a shoe is made. There is only one type of footwear – a shoe. Similarly, “or” in the relevant clause in s 1.6(2) of the Act refers to only one type of tissue – that which surrounds, connects or supports two possible parts of the anatomy – “other structures” or “organs” of the body.

The Review Panel ultimately concluded that only injuries sustained to the connective tissues of the musculoskeletal system, which do not involve injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage fall within the definition of a “soft tissue injury” in s 1.6 of MAIA.

The skin does not fall within this definition because the skin is not connective tissue.

Whilst the skin connects, supports or surrounds other structures, it is not connective tissue because:

• The skin has two principal layers, the epidermis (the epithelial tissue layer of skin comprising of hair follicles, sebaceous glands and sweat glands) and the dermis (the connective tissue layer of skin).
• Embedded within the dermis are blood vessels and sensory nerve endings as well as epidermal invaginations of hair follicles and sweat glands.
• Beneath the skin lies the hypodermis, which is connective tissue.
• The skin has many diverse roles beyond connecting, supporting or surrounding other structures, including protecting the body from water loss, protecting the body from ultraviolet radiation, contributing to the supply of vitamin D and regulating body temperature and metabolism.

As such, given that the skin is not merely connective tissue, any injury to the skin falls outside the statutory definition of a soft tissue injury.

It follows that lacerations to the skin are not threshold injuries.

Key Learnings

The Medical Review Panel decision in Abawi adds to the continuing debate over whether injury to the skin falls inside or outside the definition of a “soft tissue injury“. If injury to the skin does constitute a soft tissue injury then the injury also falls within the definition of a “threshold injury“.

Contrary, perhaps, to prior Review Panel decisions such as Nazari v AAI, Eftikhari v AAI and Dhupar v AAI the Review Panel in Abawi placed much emphasis on the so-called exemplars of connective tissue and exceptions from connective tissue contained in the statutory definition of “soft tissue injury” in s 1.6(2).

At paragraph 56, the Review Panel explained that a threshold injury is a less severe musculoskeletal injury whereas a more serious musculoskeletal injury involves one or more of the exceptions contained in the statutory definition, namely injury to nerves or ruptured tendons, ligaments, menisci or cartilage. The Review Panel identified a clear legislative intention to prevent access to ongoing statutory benefits and claims for common law damages to musculoskeletal injuries which did not occasion injuries to the nerves or ruptured tendons, ligaments, menisci and cartilage. In coming to this conclusion, the Review Panel stressed that decision-makers must look to the statutory definition of what constitutes a “soft tissue injury” rather than a strict medical definition of what a soft tissue injury may be.

Ultimately, the Review Panel concluded that a laceration is not a threshold injury because the skin is not connective tissue as required by the statutory definition of “soft tissue injury”.

It remains the case, however, that no Review Panel is bound by the decision of another Review Panel. The debate on this cutting edge issue is likely to continue until a superior court is called upon to decide the question.

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.

Additional McCabes Resources

• MC PIC Decision of the Week
• MC MAIA Toolkit
• The Proper Lookout Podcast
• MC Ready Reckoner