Court of Appeal Confirms “Extended Dual Insurance” Principle
Court of Appeal Confirms “Extended Dual Insurance” Principle
Dual (or double) insurance has traditionally been described as existing when one insured is indemnified by two or more policies in respect of the same risk. The most common example is where a worker is injured as the result of a motor vehicle accident during the course of employment, giving rise to indemnity pursuant to either the CTP or workers’ compensation policy of the insured.
In Zurich Australian Insurance Limited v GIO General Limited (2011) NSW CA 47, the New South Wales Court of Appeal has endorsed an “extended contribution principle” which provides that it is not necessary for there to be precise commonality of insured or policyholder. In other words, it is possible for dual insurance to apply in circumstances where there are two insureds indemnified by different insurers for the same injury.
At first instance, it was held that the workers’ compensation insurer of the employer (Tiger Tours) did not have to contribute on the basis of dual insurance to a Judgment against the “owner” of a defective motor vehicle (Caringbah Bus Service), a Judgment which had been satisfied by the CTP insurer.
The primary Judge determined that there was no dual insurance on the basis that the worker did not commence proceedings or allege negligence by the employer, as dual insurance is concerned with actually crystallised, rather than hypothetical, liabilities.
The Court of Appeal disagreed, confirming that contribution on the basis of dual insurance may be sought in circumstances where a liability to an injured claimant has already been finalised and where there has been no actual claim made against one of the policies.
An important factor in determining the question of dual insurance was that there was an agreement by the workers’ compensation insurer that both Tiger Tours and Caringbah Bus Service were owners of the defective vehicle, as Tiger Tours was exercising possession of the coach at the time and Caringbah Bus Service was entitled to immediate possession of it, thus bringing each within the definition of “owner” in Section 3 of the MAC Act.
The Court of Appeal effectively held that it would be unreasonable for the employer, in seeking to deny the claim for dual insurance, having made the above concession, to rely on a submission that Caringbah was not in fact the “owner” of the vehicle at the time of injury, and so it had no liability to the injured worker.
The Court emphasised the importance of the principle of sharing a common burden when considering claims for contribution on the basis of dual insurance. Ultimately, the Court accepted that there were in fact two policies responding to the same risk, with the CTP insurer covering both Tiger Tours and Caringbah Bus Service as “owner” of the vehicle, and the workers’ compensation insurer covering Tiger Tours as the employer of the worker which, it found, had a liability in negligence regardless of the fact that no such claim was made directly by the injured worker.
The workers’ compensation insurer was ordered to contribute 50% to the cost of the claim.
More on Medical Appeal Panels and Natural Justice
Employers Mutual has successfully defended proceedings in the Court of Appeal from a Supreme Court Judgment to set aside a Medical Appeal Decision. The Court considered the obligation of a Medical Appeal Panel to give natural justice and a right to be heard in relation to an examination conducted by a member of the Appeal Panel who found that the worker’s presentation was inconsistent; Maricic v The Registrar, Workers Compensation Commission & Ors (2011) NSWCA 42.
An AMS had issued a Medical Assessment Certificate certifying Whole Person Impairment of 5%. The worker appealed and as part of the appeal process a member of the Appeal Panel was appointed to conduct an examination. Ultimately, the Appeal Panel issued a Certificate assessing a 6% WPI resulting from injury to the lumbar spine and a 0% WPI resulting from injury to the cervical spine. In the course of so concluding, the Panel noted that one of its members had undertaken a clinical examination of the worker and it was reported to the Panel that the worker had refused to turn her neck to the left due to pain on formal examination, which the examining Panel member considered to be inconsistent with his observation of her in the waiting room after the examination, when she was noted to turn her head to the left to speak to her husband. It was concluded that the restriction of movement was voluntary and not due to any pathological condition.
The Appeal Panel noted that it had come to its own conclusions regarding the worker’s impairment and, in relation to the neck, considered her presentation to have been inconsistent.
The worker brought proceedings in the Supreme Court alleging that she had been denied natural justice in that she had not been made aware of the findings of the examining member of the Panel, or given an opportunity to respond to those findings. The worker failed at first instance and appealed to the Court of Appeal.
On appeal, it was argued by the worker that the conclusions reached by the examining member of the Panel were “contentious, controversial and matters of personal judgment, which were unknown to (the worker) and operated to produce a decision adverse to her” without her being given an opportunity to consider the issue or respond to it.
The Court of Appeal held that, although in some circumstances procedural fairness would require a party to be given an opportunity to respond to opinions reached by a Medical Appeal Panel or one of its members who conducts an examination, this was not such a case because issues concerning whether the worker’s complaints were genuine had been raised in the medical evidence relied upon by the employer and had therefore been raised between the parties. The Court considered that the position might be otherwise if a party’s case were rejected on a basis not previously raised and not addressed in material relied upon and placed before the AMS or the Medical Appeal Panel.
The effect of this decision is that a Medical Appeal Panel and, in particular, a member of an Appeal Panel who is required to conduct an examination and report to the Panel, is not required to provide a report of that examination to a party and invite their response to it prior to making its decision, even where such report includes a finding of inconsistency of presentation which is in effect a credit issue, unless that issue has not been previously raised in any of the material relied upon by the parties or on the submissions made by them.
Fish “Slapper” Loses Claim
In Skea v A Mesumeci Pty Limited trading as Better Choice Fisheries (WCC 0100764/10 – 3 March 2011), Employers Mutual successfully resisted a claim by a worker who suffered injuries after provoking an altercation.
The worker was a Warehouse Assistant who was working packing seafood, when a verbal altercation escalated to the point where he slapped the face of a fellow worker with a fish fillet. Unfortunately, at the time the fellow worker was holding a sharp fish filleting knife and in a response to being struck with the fish fillet, the knife came into contact with the worker’s face, causing a laceration to the nose.
After viewing CCTV footage, Arbitrator Dalley rejected the worker’s claim on two grounds:
- By his conduct, the worker had taken himself outside the course of his employment.
- The worker did not suffer serious and permanent disablement, and his injury was solely attributable to his serious and wilful misconduct.
An Award was entered for the Respondent.
Expert Evidence & Credit Issues in the Commission
In Hancock v Eastcoast Timber Products Pty Limited  NSW CA 11 the New South Wales Court of Appeal allowed an Appeal from the President of the Workers Compensation Commission, who rejected evidence of the worker’s treating specialist on the basis that there was no proper factual foundation for the expert’s opinion and there was no satisfactory explanation for the expert’s conclusion.
The Court of Appeal found that it was sufficient for the expert to set out the facts observed, the assumed facts including those garnered from other sources such as the history provided by the worker, and information from x-rays and other tests. The Court stated that in order for expert evidence to be admissible, there is no requirement for an exact correspondence between the assumed facts upon which an expert opinion is based and the facts proved in the case.
Beazley JA also held that the President was in error in failing to consider the totality of the expert’s evidence, with four reports having been admitted, and that it was not open to the President to single out an isolated part of the whole of the expert’s evidence before the Commission.
Tobias JA expressed some disquiet in relation to the appropriateness of workers’ compensation matters being determined without oral evidence where questions as to the credit of a witness are in issue.
More on Section 74 Notices
Once again a Presidential Decision of the Commission has confirmed the need for insurers to raise all relevant issues in a s.74 Notice if such issues are to be determined by the Commission. In Woolworths Limited v Meake  NSWWCC PD 13 the insurer had issued a number of s.74 Notices which included a denial of liability in respect of weekly benefits on the basis that a work related aggravation had ceased and that the insurer’s medical evidence indicated that the worker was fit for her pre-injury duties. The s.74 Notice included evidence that the worker had been dismissed from her employment for allegedly stealing from a co-worker, an allegation which the worker had denied. No issues were, however, raised in the s.74 Notices in relation to the termination of the worker’s employment.
When the matter came for arbitration, the insurer sought to argue that, by reason of the worker having unreasonably rejected suitable employment, any entitlement to weekly benefits should be assessed on the basis of s.40(2A) of the 1987 Act. The arbitrator refused to allow the employer to rely on s.40(2A) on the basis that the applicability of that section had not been identified as an issue in the s.74 Notice or at any Teleconference and further that no application had been made under s.289A(4) of the 1998 Act to raise a previously un-notified matter. The employer appealed.
President Keating DCJ dismissed the employer’s appeal notwithstanding that it argued that the evidence on which it wished to rely had been contained in the s.74 Notice and that the worker was aware of the circumstances in which her employment ceased. The worker argued that she had not been made aware that the circumstances in which her employment ceased would be argued against her in the proceedings before the arbitrator and that, had she been aware, she would have put on evidence regarding these issues, including in relation to her denial of having been guilty of theft.
President Keating determined that it would have been unfair to the worker to allow s.40(2A) to be raised in the circumstances and noted, in particular, that the insurer, in addition to failing to raise the issue in a s.74 Notice, had also failed to do so in correspondence, the Reply or at the Teleconference and further that no application had been made at the arbitration to raise the issue pursuant to s.289A(4). President Keating noted that these factors distinguished this case from previous Presidential Decisions and that the arbitrator had been correct not to allow the issue to be raised.
While this decision does not create any new law, it again emphasises the need for insurers to take care to ensure that all issues are raised in a s.74 Notice and further confirms the factors relevant to leave being granted to raise an issue not referred to in a s.74 Notice in Commission proceedings pursuant to s.289A(4). In short, an insurer must raise the issue in question at an early stage and must give a worker sufficient notice of its intention to seek leave to raise the issue in order that the worker can put on any evidence in relation to that issue prior to the arbitration hearing.
While it is true that there are circumstances where previously un-notified issues can be raised, it is further noted that there is a distinction between the raising of issues and the reliance on evidence and that the legislation and the Regulations unequivocally preclude an insurer from relying upon evidence which has not been attached to a Dispute Notice or a letter of offer.
Schedule 6 Worker Costs: Multiple Party Uplift for Lead Scheme Agent Matters?
An uplift of up to 30% is available for workers’ legal representatives under Table 4, Item 6 “if the claim or dispute is resolved by an Award or settlement apportioned between more than one Respondent”.
In Curran v Gregory Hickman, WT Praine (5458/10), the Delegate of the Registrar was required to consider whether this uplift was available where a common award was entered against multiple parties.
The Registrar’s Delegate noted that global awards had been entered against the Respondents, so there was no apportionment between more than one Respondent and therefore the basis for the claimed item was not established. Accordingly, he declined to allow the uplift.