'Rabbit-proof defence' – an assessor's obligation to resolve the issues – Insurance Australia Ltd t/as NRMA Insurance v Pate [2016] NSWSC 278
Originally Published by Eden Christopher on Tuesday, March 29, 2016 12:00:00 AM
Author: Eden Christopher
Judgment Date: 18th March, 2016
Citation: Insurance Australia Ltd t/as NRMA Insurance v Pate [2016] NSWSC 278
Jurisdiction: Supreme Court of New South Wales[1]
Principles
- A Claims Assessment and Resolution Service (CARS) Assessor will fall into legal and jurisdictional error if they erroneously disregard an issue pressed by an insurer at an assessment conference. This amounts to a denial of procedural fairness.
- A CARS Assessor's obligation when assessing a claimant's economic loss is to determine what injuries the claimant suffered and the economic consequences of these injuries. A claimant's whole person impairment (WPI) is an erroneous consideration when determining an award of damages for loss of earning capacity.
Background
The claimant was injured in a motor vehicle accident. As a result of her injuries, she claimed damages including past and future economic loss. At the time of the accident, the claimant worked as a full-time property manager and, in partnership with her husband, had taken significant steps to begin a rabbit-farming venture.
In coming to an assessment of the claimant's loss of earning capacity, the CARS Assessor reasoned, "A finding of 5% WPI in any event is significant with respect to her physical injuries. A finding of 8% WPI for her psychiatric injuries falls into the same category, individually and combined they would have an impact upon her loss of earning capacity, need for treatment and care".2
In relation to the claimant's rabbit-farming venture, the insurer submitted that income from the rabbitry was speculative and was unlikely to be a serious business endeavour in the absence of a business plan or consent from the local council (which was required). In his statement of reasons relating to the lack of council approval, the CARS Assessor concluded, "…I took the view that the insurer had conceded that this was no longer an issue".3
The CARS Assessor awarded $60,000 for past economic loss and $200,000 for future loss of earnings relating to the rabbitry.
The insurer submitted that taking into account the claimant's WPI was an irrelevant consideration. In addition, the insurer submitted that the CARS Assessor's failure to resolve the issue of whether the claimant had council approval for the rabbitry was erroneous.
In coming to an assessment of the claimant's loss of earning capacity, the CARS Assessor reasoned, "A finding of 5% WPI in any event is significant with respect to her physical injuries. A finding of 8% WPI for her psychiatric injuries falls into the same category, individually and combined they would have an impact upon her loss of earning capacity, need for treatment and care".2
In relation to the claimant's rabbit-farming venture, the insurer submitted that income from the rabbitry was speculative and was unlikely to be a serious business endeavour in the absence of a business plan or consent from the local council (which was required). In his statement of reasons relating to the lack of council approval, the CARS Assessor concluded, "…I took the view that the insurer had conceded that this was no longer an issue".3
The CARS Assessor awarded $60,000 for past economic loss and $200,000 for future loss of earnings relating to the rabbitry.
The insurer submitted that taking into account the claimant's WPI was an irrelevant consideration. In addition, the insurer submitted that the CARS Assessor's failure to resolve the issue of whether the claimant had council approval for the rabbitry was erroneous.
Decision
The Supreme Court of New South Wales (the Court) reiterated that it is erroneous for a CARS Assessor to premise an assessment of loss of earning capacity based on WPI percentages as assessed by the Medical Assessment Service.4 The Court reiterated that, in order to comply with the law, a CARS Assessor must determine the injuries suffered by the claimant and the economic impact caused by those injuries.5 Despite erroneously taking into account the claimant's WPI, the Court concluded that the CARS Assessor had adequately addressed his obligations to determine the injuries suffered and their economic impact.6
In relation to the second ground advanced by the insurer, the Court accepted the CARS Assessor erroneously disregarded the issue raised by the insurer that the claimant did not have council approval to run a rabbitry business. In coming to this conclusion, the Court considered an affidavit from counsel for the insurer and unchallenged corroborative testimony from the insurer's solicitor. The Court found that by not resolving what lay in dispute between the parties, a relevant consideration had not been taken into account.7 The result is a legal and jurisdictional error.8
The claimant contended that there was no practical injustice to the insurer because it had failed to prove this aspect of its case and, in any event, the reduction of vicissitudes adequately addressed the issue. The Court found, however, that it was not open to conclude whether or not practical injustice had been suffered because the CARS Assessor never addressed the issue between the parties as a result of his error.
In relation to the second ground advanced by the insurer, the Court accepted the CARS Assessor erroneously disregarded the issue raised by the insurer that the claimant did not have council approval to run a rabbitry business. In coming to this conclusion, the Court considered an affidavit from counsel for the insurer and unchallenged corroborative testimony from the insurer's solicitor. The Court found that by not resolving what lay in dispute between the parties, a relevant consideration had not been taken into account.7 The result is a legal and jurisdictional error.8
The claimant contended that there was no practical injustice to the insurer because it had failed to prove this aspect of its case and, in any event, the reduction of vicissitudes adequately addressed the issue. The Court found, however, that it was not open to conclude whether or not practical injustice had been suffered because the CARS Assessor never addressed the issue between the parties as a result of his error.
Why this Case Note is important
The principles of procedural fairness and natural justice apply equally to an insurer and a claimant. In a CARS assessment conference, given there is no transcript of proceedings, it is very important to clearly and comprehensively articulate the issues in the matter in the CARS application and reply forms. These documents constitute 'the face of the record' and assist the Court in determining whether an assessment of damages was determined in accordance with law.
In this case, the Court concluded that the CARS Assessor failed to deal with an issue raised by the insurer because the issue was squarely raised in written documents. The Court accepted the affidavit evidence given by the lawyers engaged by the insurer, which established that the issue was pressed during the face-to-face assessment conference.
In this case, the Court concluded that the CARS Assessor failed to deal with an issue raised by the insurer because the issue was squarely raised in written documents. The Court accepted the affidavit evidence given by the lawyers engaged by the insurer, which established that the issue was pressed during the face-to-face assessment conference.
Schmidt J.
At [89].
At [50].
At [92] – [93].
At [95].
At [101] – [102].
At [54].
Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2011) 206 CLR 323 at [82].