Welcome to the September 2014 issue of the Edwards Michael Lawyers eBulletin.

WorkCover Review

On 17 September 2014 the Legislative Council Standing Committee on Law and Justice released its report following its first review of the WorkCover Authority of NSW.  Some key recommendations are:-

  •  That the roles of WorkCover as a regulator and Nominal Insurer be separated.
  • A review of the segregation of WorkCover functions and delegations in relation to Work Capacity Decisions.
  • Restore lifetime medical benefits for hearing aids, prostheses and home and vehicle modifications.
  • Review the viability of restoring all lost medical benefits for injured workers under the scheme.
  • Allow recovery of medical expenses without pre-approval if it was not reasonable or practical for the worker to obtain pre-approval before undertaking treatment.
  • Permanent impairment disagreements to be resolved through negotiation.
  • Legal costs for injured workers in relation to review of Work Capacity Decisions (subject to analysis of financial impact).

The Chairman of the Committee noted that “while the reforms have enhanced the financial sustainability of the scheme, review stakeholders identified a number of areas where the reforms have limited the assistance available to injured workers”.


Independent Academic Critical of 2012 Reforms

Michael Peters of the University of NSW School of Business has published an article in the Tort Law Review (22 Tort L Rev 75) in which he examines the social impact of the 2012 reforms.  The article includes the following Statement:-

Since 1910 there has been an implicit understanding that the State will organise and protect the rights of the injured and bring careless employers to account.  As noted above, the history of the social contract or bargain has placed onerous restrictions on the weaker counter party whilst the other party has sought to escape their responsibilities on the grounds of fiscal responsibility.  Not quite a level playing field.

The State guaranteed that injured workers would not slip through the safety net.  Since 2012 the opposite has occurred.  Injured workers are increasingly seen as a financial burden to be managed out of the system, at the least possible cost to the system.  The return to work provisions in the new legislation are designed to declare injured workers able to do any task.  In 1910 care of the injured was the overriding objective and was a reaction to the inequitable treatment of the injured and weak.

In 2012, it has been replaced by the efficient management of the injured worker.  The raison d’etre of the scheme for workers is slowly evaporating.  The common law rights are carefully managed to make them inaccessible to most and the rehabilitation path became an exercise to convince the injured it was in their interest to return to work regardless of the toll.  Medical treatment including the right to access funds to pay for the IME report and legal fees were abolished by the new legislation.

The social contract now has new rules, which the NSW Court of Appeal appears not to agree with, as it relates to the retrospective nature of the law.  The contract is now about managing the work injury experience, setting expectations and reducing access to compensation”.

The author of the article concludes that the three options identified by the latest actuarial report to reduce the scheme’s growing deficit, being increasing premiums, reducing benefits and/or improving claims management outcomes, all appear to ignore the social contract with the injured worker.  He suggests the social contract should be repudiated and injured workers should re-claim their common law rights.


Council Liable for Road Accident

The Court of Appeal considered the application of section 43A of the Civil Liability Act in Curtis v Harden Shire Council [2014] NSWCA 314.

The appeal concerned a challenge to the finding of the primary Judge that whilst the Council was negligent for failing to erect adequate signage indicating loose gravel on the surface as the result of roadworks, the Plaintiff failed to establish a breach of duty to the standard required by section 43A of the CLA.

Section 43A provides that a public authority exercising (or failing to exercise) a special statutory power will not be liable unless the act or omission was so unreasonable that no authority having the special statutory power could properly consider the act or omission to be a reasonable exercise of its power.

The Court decided that the emphasis was in what a public authority exercising that statutory power could properly consider reasonable, not what the Court considers reasonable, and that the expert evidence established that nobody with the special statutory powers in question could reasonably have decided not to install relevant signage.

The case also included a challenge to findings in relation to the issue of causation, with Beazley P issuing a dissenting judgment, finding that the primary Judge erred in holding that the Plaintiff was required to prove that the probability of the accident being caused by the Council’s breach was greater than the possibility that it was caused by hypothetical alternatives unrelated to that breach.  Her Honour considered the correct question was whether the relevant fact had been proved on the balance of probabilities.


No Liability for Slippery Surface

In Pavlis v Wetherill Park Market Town Pty Limited [2014] NSWCA 292 the Court of Appeal dismissed an appeal from a District Court finding that an occupier had satisfied its duty of care by applying non-slip paint in the area where the Plaintiff slipped and fell.

The primary Judge was satisfied that the occupier’s duty of care was discharged by the application of non-slip paint six months prior to the injury, particularly in circumstances where there was no evidence that any other person had slipped in the area since it had been painted.

The Court was satisfied the primary Judge correctly formulated the tests to be applied under Section 5B of the Civil Liability Act 2002 (NSW).  In particular, the Plaintiff bore the onus of demonstrating that the Defendant had failed to take precautions against a risk that was foreseeable and not insignificant, being precautions that a reasonable person in their position would have taken: section 5B(1).  Further, the Primary Judge was required to take into account the probability that the harm would occur if care were not taken: section 5B(2)(a).

The appeal against judgments in favour of both the occupier and its managing agent were dismissed.


No Impermissible Use of Hindsight

A truck driver was injured at a Boral site when a large conical despatching bin fell from its supports onto his cement agitator truck.

The primary Judge found that a reasonable person in Boral’s position would have known of the risk and found Boral to be liable for the Plaintiff’s damages.

Boral appealed, complaining that the Judge had adopted the impermissible use of hindsight when identifying the risk of harm.

The Court of Appeal disagreed; Boral Resources (NSW) Pty Limited v Gangi [2014] NSWCA 287.  The Court determined that the primary Judge was correct in accepting expert evidence that Boral ought to have known the structural elements of the plant it operated, and that since 1991 or 1992 when asbestos cladding was removed and revealed unusual structural features, steps should have been taken to investigate how the bins were supported.  Instead, Boral simply assumed the bins were adequately supported and did not have any system of inspection or maintenance of the support structures which were exposed to the elements over a period of approximately 25 years.

The Court dismissed the appeal in relation to the findings of negligence.


Inconsistent Surveillance After Medical Assessment Certificate

A worker was assessed as having 26% WPI as the result of psychological injury she suffered following a robbery during the course of her employment.  She presented as being chronically disabled to an Approved Medical Specialist, however surveillance shortly after the assessment revealed the worker to have an inconsistent presentation.

The Workers Compensation Nominal Insurer appealed to a Medical Appeal Panel on the basis of the surveillance material, resulting in a reduction of the level of whole person impairment from 26% to 24% Whole Person Impairment. The sole basis for the reduction was that as a result of the surveillance material the PIRS category for “Travel” needed to be reviewed, as the evidence revealed the worker had some capacity to leave home unaccompanied.

The Workers Compensation Nominal Insurer was dissatisfied with the outcome and filed an application for judicial review to the Supreme Court and that application is the subject of a judgment in Workers Compensation Nominal Insurer v. Bui [2014] NSWSC 832.

McCallum J rejected most of the grounds for the application for judicial review, however she found that the Medical Appeal Panel failed to give sufficient reasons for concluding that the surveillance material did not affect the AMS’ findings in relation to social function; concentration, persistence and pace; and employability.

It was also found that the Panel failed to give sufficient reasons for rejecting the Nominal Insurer’s request for the worker to undergo a further medical examination in light of the surveillance material.

Accordingly, the Medical Appeal Panel Decision was set aside and the matter remitted to the Registrar for further consideration.


Car Dealer, Drug Dealing and Death

In a claim for Death benefits under the Workers Compensation Act brought by the wife of the deceased motor vehicle dealer, sensational circumstances were required to be considered in order to ascertain whether employment was a “substantial contributing factor” within the meaning of section 9A.

The Deceased was a working Director of the insured’s motor vehicle dealership who was lured after hours to the dealership on the pretext of inspecting a motor vehicle but with the intention of abduction and extortion.

Ultimately, the Deceased was thrown from the Gap and the principal extortionist was found guilty of murder.

The Arbitrator was satisfied that employment was a factor that was both “real” and “of importance” in causing the injury which resulted in the death of the deceased.  He was satisfied that “the entirety of the plot to kidnap the deceased revolved around his employment”.  He was not satisfied that there was persuasive evidence that the Deceased dealt in drugs or that the Deceased’s death resulted from a private vendetta arising from his illicit activities.

In an appeal from the Arbitrator’s decision, President Keating noted that the only contested issue related to section 9A:- Sydney’s American Imports Pty Limited (deregistered) v Lujbic [2014] NSWWCC PD 56.  The President did not accept the employer’s submission that the Arbitrator had effectively reversed the onus of proof by finding that the employer had failed to prove the non-employment related factors on which it relied.  The President stated:-

Where a Claimant has proved an incapacitating injury (or injury causing death) arising out of or in the course of his employment, at least to a prima facie level, it is for the employer to show if it can, that there is something that disentitles the worker to compensation…”.

The President concluded that the evidence before the Arbitrator comfortably satisfied the relevant section 9A factors.  In particular, he was influenced by the finding that the characteristics of the workplace to which the Deceased was being lured was a decisive factor in relation to the criminal scheme, thus bringing the worker’s employment squarely within the necessary context.

The appeal was dismissed.


Deputy President Considers Finding of “No Current Work Capacity”

In Wollongong Nursing Home Pty Limited v Dewar [2014] NSWWCC PD 55 Deputy President Roche considered an appeal from an Arbitrator’s finding that a worker had “no current work capacity” in circumstances where her treating general practitioner had certified her fit for suitable duties.

The appeal was concerned with calculation of payments of weekly compensation following the 2012 reforms, which required a deduction to account for the amount a worker is able to earn in suitable employment.

The Arbitrator based his decision on a finding that “suitable employment” must still “represent real work and not made up duties”.

The Deputy President found that the Arbitrator’s assessment of the worker’s capacity for suitable employment by reference to light duties provided by the employer, rather than by reference to the legislation, was erroneous,  stating:-

the new provisions require a determination of whether a worker has a ‘current work capacity’ or no ‘current work capacity’.  A ‘current work capacity’ is an ‘inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment…No current work capacity’ exists when the worker is not able to return to work either in the worker’s pre-injury employment or suitable employment…

 .. ‘Suitable employment’ is defined as employment in work for which the worker is currently suited, having regard to certain specified matters, regardless of whether the work or employment is ‘available’ or is of a type or nature which is ‘generally available in the employment market’”.

Deputy President Roche accepted that the 2012 reforms had eliminated previous requirements that engaged concepts relevant to the labour market, however he stated that the new definition of suitable employment…

…has not eliminated the fact that ‘suitable employment’ must be determined by reference to what the worker is physically (and psychologically) capable of doing, having regard to the worker’s inability arising from an injury.  Suitable employment means ‘employment in work for which the worker is currently suited’ (emphasis added)”.

The Deputy President ultimately considered that it was not open to the Arbitrator to ignore expert evidence that the worker had a capacity for some form of employment and the employer’s appeal was therefore upheld.  The contested issues in relation to weekly compensation were remitted to another Arbitrator for re-determination.


AMS Bound by Arbitrator’s Finding

In NSW Department of Education and Communities v. Lofts [2014] NSWWCC MA 15 a Medical Appeal Panel determined that an Approved Medical Specialist was bound by an Arbitrator’s finding that a worker was partially incapacitated for work.

It was considered that this finding constituted an issue estoppel and it was therefore not open to the AMS to find that the worker’s employability for PIRS purposes was total.

The Medical Assessment Certificate was therefore revoked and a replacement certificate issued.