On 1 December 2017 the Motor Accident Injuries Act 2017 (“MAIA”) commenced, replacing the scheme under the Motor Accidents Compensation Act 1999. It will only apply to motor accidents occurring after 1 December 2017.
The MAIA provides, in essence, a no-fault statutory scheme with a limited fault based common law damages scheme.
Whether a person has a “minor injury” under the MAIA is central to their rights in both the statutory and common law damages schemes.
A “minor injury” is defined in section 1.6 of the MAIA to be:
(1) a minor injury is any one or more of the following:
(a) a soft tissue injury,
(b) a minor psychological or psychiatric injury.
(2) A soft tissue injury is (subject to this section) 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.
(3) A minor psychological or psychiatric injury is (subject to this section) a psychological or psychiatric injury that is not a recognised psychiatric illness.
Pursuant to section 1.6(4) of the MAIA, the Motor Accident Injuries Regulation 2017 (“MAIR”) may
- include or exclude a specified injury from being a soft tissue injury; or
- include or exclude a specified injury from being a minor psychological or psychiatric injury.
Regulation 4 of the MAIR has included the following:
- An injury to a spinal nerve root that manifests in neurological signs (other than radiculopathy) is included as a soft tissue injury;
- Each of the following injuries is included as a minor psychological or psychiatric injury for the purposes of the Act:
- acute stress disorder,
- adjustment disorder.
In accordance with section 4.4 of the MAIA, a “minor injury” cannot pursue a common law damages claim.
No benefits are payable to an injured person if compensation under the Worker’s Compensation Act 1987 (NSW) is payable to the injured person in respect of the injury concerned. The insurer under the Worker’s Compensation claim must have accepted liability (section 3.35(3)), albeit that no benefits are payable under this legislation until the Worker’s Compensation insurer has denied liability (Section 3.35(5)).
The Statutory Scheme includes weekly loss of income payments for:
- Weekly payments for loss of income including:
- A gradually reducing weekly payment (in periods of entitlement) for total or partial loss of earning capacity. That is, 95% of weekly payments for the first 13 weeks (Section 3.6), for weeks 14 – 78, 80% of the pre-accident weekly payments (for total loss of earning capacity) and 85% of the pre accident weekly payments (for partial loss of earning capacity) (Section 3.7).
- After week 78 post accident the weekly payment is the mathematical difference between the person’s pre-accident earning capacity and the person’s post accident earning capacity in accordance with section 3.8. The assessment of the person’s post-accident earning capacity is based on the open labour market reasonably available to the person based on the person’s fitness for work. A person’s fitness for work is to be determined by having regard to:
- the nature of the injury and the likely process of recovery,
- treatment provided and rehabilitation undertaken and the potential for further treatment and rehabilitation,
- the person’s training, skills and experience,
- the age of the person,
- any medical certificate provided by the injured person as to the person’s fitness for work (Schedule 1, section 8(3)).
- Driver’s who were “wholly or mostly” at fault and/or driver’s with a “minor injury”, their weekly benefits will cease after 26 weeks (Section 3.11);
- The minimum weekly statutory benefits amount is 2.5% of the maximum weekly statutory benefits amount which is $3,583 (to be indexed) (Section 3.9 and 3.10).
Medical treatment expenses is entitled to statutory benefits for the following expenses:
- The reasonable cost of treatment and care.
- reasonable and necessary travel and accommodation expenses incurred by the injured person in order to obtain treatment and care for which statutory benefits are payable,
- If the injured person is under the age of 18 years or otherwise requires assistance to travel for treatment and care, reasonable and necessary travel and accommodation expenses incurred by a parent or other carer of the injured person in order to accompany the injured person while treatment and care for which statutory benefits are payable is being provided (Section 24(1)).
The MAIA specifically excludes, in section 3.24(2) treatment for:
“the cost of treatment and care to the extent that the treatment and care concerned was not reasonable and necessary in the circumstances or did not relate to the injury resulting from the motor accident concerned.”
Gratuitous Care (“attendant care services provided to an injured person for which the injured person has not paid and is not liable to pay”) does not include any statutory benefits (Section 3.25).
If a dispute arises regarding the statutory benefits, an internal review must be undertaken (section 7.11) before a referral to the Dispute Resolution Service (“DRS”) (Section 7.12). The Dispute Resolution Service will determine the dispute through a merits review process (Sections 7.10 – 7.16), a Medical Assessment process (Sections 7.17 – 7.29) or a Claims Assessment for Damages process (Division 7.6).
The Merits review process of the DRS generally ought to be completed within 28 days unless allowed by the Motor Accident Guidelines. With the decision ought to be a Certificate which attaches a brief statement setting out the reasons for the decision (Section 7.13). The decision of the Merit reviewer is binding on the parties (Section 7.14), save for an appeal for a Review of Merit Review Decision by Review Panel (Section 7.15). This appeal is only available on the grounds that “the decision was incorrect in a material respect”.
The Medical Assessment review process may refer the dispute for review with one or more medical assessors (Section 7.20(2)). If a party fails to provide medical evidence to support a review of the Permanent Impairment asserted the Medical Assessment review may refuse to accept the referral (Section 7.20(3)). When assessing the Permanent Impairment, the medical assessor:
- Must assess the degree of Permanent Impairment in accordance with the Motor Accident Guidelines (Section 7.21(1));
- May assess more than one physical injury together (Section 7.21(2));
- May not assess the psychological or psychiatric injuries in addition, unless the assessment is made solely in relation to a psychological or psychiatric injury (Section 7.21(3));
- May decline to assess Permanent Impairment if the injury has not become permanent (Section 7.21(4)).
An appeal of the Medical Assessment review can only occur from a single medical officer (or an assessment of two or more medical practitioners, where each medical practitioners decision was singular) on the grounds the decision was “incorrect in a material respect” (Sections 7.26(1) – (4)).
The Claims Assessment for Damages assessor appears to assess only the issue of liability (if disputed) and the amount of damages that a Court might award. The decision as to liability is not binding on any party (Section 7.38(1)). An assessment of the amount of damages is binding on the insurer (Section 7.38(2)).
A list of the type of matters that are merit review, medical assessor review and claims assessment are listed in Schedule 2 of the MAIA.
CTP damages claims
It is important to note that:
- A claim for CTP damages cannot be made before the expiration of 20 months after the motor vehicle accident to which the claim relates unless the claim relates to a death of a person or a degree of permanent impairment above 10% (Section 6.14(1)).
- A claim for damages must be made within 3 years after the motor vehicle accident to which the claim relates (Section 6.14(2)) unless a person has a “satisfactory explanation for the delay in making the claim” (Section 6.14(3)). If the person makes the claim and the insurer does not seek a “satisfactory explanation for the delay” within two months, they lose the right to reject a late claim. If a dispute arises about the satisfactory explanation given, the matter is referred to the DRS.
Non-economic loss (Also known as General Damages or Pain and Suffering) can only be claimed if an impairment is greater than 10% (Section 4.11).
The definition of economic loss includes:
- Damages for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity, and
- Damages for costs relating to accommodation or travel (not being the cost of treatment and care) of a kind prescribed by the regulations, and
- Damages for the cost of the financial management of damages that are awarded, and
- Damages by way of re-imbursement for income tax paid or payable on statutory benefits or workers compensation benefits arising from the injury that are required to be repaid on an award of damages to which this Part applies (Section 4.3 and 4.5).
It does not include damages for medical treatment and care (past or future).
Non-Economic Loss is currently capped at $521,000 and will be indexed. Past and Future Economic Loss is currently capped at 2.5 times Average Weekly Earnings, which is currently $3,853 per week.
SIRA will establish an advisory service ‘to assist Claimants in connection with their claim for statutory benefits and claims for damages and with the dispute resolution procedures’ (Section 7.48). A Claimant for statutory benefits is only entitled to recover from the insurer reasonable and necessary legal costs if these are permitted by the regulations or the Dispute Resolution Service determines the costs to be payable. The Dispute Resolution Service is only permitted to allow payment of legal costs in a statutory benefits dispute if the Claimant is under a legal disability or exceptional circumstances exist (section 8.10(4)).
Legal costs appear restricted to party/party if the resolution is below $75,000.00. Only above that amount, can a Solicitor/Client costs agreement have effect.
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