June 2014

Lump sum compensation - further clarification post Goudappel

Deputy President Roche considered the implications of ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18 on lump sum claims going forward in Caulfield v Whelan Kartaway Pty Ltd [2014] NSWWCCPD 34.

Background

Mr Caulfield (“the worker”) injured his right knee on 9 August 2005. He was awarded lump sum compensation for 8% WPI in 2010.  On 29 August 2012, he made a further claim under sections 66 for the same injury on the basis of a deterioration of his condition and an increase in impairment.

It seems a further claim under section 66 was made but not a claim under section 67.

Issue(s) for determination

One of the questions for determination was whether the worker, having made an initial claim for lump sum compensation before 19 June 2012, was entitled to make a further claim for lump sums in respect of the same injury on or after 19 June 2012 (when the 2012 lump sum amendments came into effect), bearing in mind the effect of section 66(1A) of the 1987 Act.  Section 66(1A) provides only one claim can be made under the 1987 Act for lump sum compensation in respect of the permanent impairment that results from the injury. 

The decision

The Deputy President considered Clause 15 of Part 19H of Schedule 6 of the 1987 Act (the transitional provisions) and amendments which were introduced by the 2010 Regulation, specifically, Clause 11 of Schedule 8 of the 2010 Regulation.  

Clause 15 of Part 19H of Schedule 6 of the 1987 Act provides:

“15 Lump sum compensation

An amendment made by Schedule 2 to the 2012 amending Act (which deals with lump sum claims) extends to a claim for compensation made on or after 19 June 2012, but not to such a claim made before that date.”

Clause 11 of schedule 8 of the 2010 Regulation provides:

“11 Lump sum compensation

(1) The amendments made by Schedule 2 to the 2012 amending Act extend to a claim for compensation made before 19 June 2012, but not to a claim that specifically sought compensation under section 66 or 67 of the 1987 Act.

(2) Clause 15 of Part 19H of Schedule 6 to the 1987 Act is to be read subject to subclause (1).”

Deputy President Roche determined the combined effect of clause 15 and clause 11 was that the lump sum amendments only apply to claims for compensation pursuant to section 66 made on or after 19 June 2012, where a worker has not made a claim specifically seeking compensation under section 66 or section 67 before 19 June 2012.

In coming to his decision, the Deputy President referred to the following comment made at paragraph 29 by the High Court in ADCO Constructions Pty Limited v Goudappel [2014] HCA 18:

“The purpose of clause 11 (of schedule 8 of the 2010 Regulation) … was clear enough.  It applied the new section 66 to entitlements to permanent impairment compensation which had not been the subject of a claim made before 19 June 2012 that specifically sought compensation under the old section 66.”

In Mr Caulfield’s case, because he had sought compensation under section 66 prior to 19 June 2012, it was held the lump sum amendments did not apply to his further claim for lump sums and he was entitled to make any number of further claims for permanent impairment compensation.

What does this mean? 

The effect of the decision is the 2012 lump sum amendments only apply to workers who have not “specifically sought” lump sum compensation prior to 19 June 2012 in respect of a particular injury.

Workers who have previously claimed compensation pursuant to section 66 before 19 June 2012 are now entitled to bring claims for further lump sum compensation pursuant to section 66 of the 1987 Act. 

While the Deputy President did not specifically comment on the point, the decision suggests workers who have previously claimed (but not necessarily received) compensation pursuant to sections 66 or 67 before 19 June 2012 would also be entitled to compensation or additional compensation pursuant to section 67, provided they can prove there has been pain and suffering or further pain and suffering.

We believe the position may be different for workers who suffered injury before 1 January 2002. 

In practice

We anticipate there will be an increase in the number of “top up” claims being made by workers who previously made lump sum claims prior to 19 June 2012, even though they may not have actually recovered compensation at that time.  This would include workers assessed by an AMS as having 0% WPI or not having reached maximum medical improvement.  There are also those workers who made a claim and decided not to proceed with it. 

We recommend you keep an eye out for workers who have undergone surgery or further surgery since their initial claim for lump sum compensation was made, as this could lead to higher impairment assessments, thereby generating a further lump sum claim.