May 2013

Court of Appeal reinstates lump sum benefits for injuries before 19 June 2012

Workers who sustained an injury before 19 June 2012 can still claim and be paid compensation pursuant to sections 66 and 67.  According to the recent Court of Appeal decision of Goudappel v ADCO Constructions Pty Ltd [2013] NSWCA 94, 29 April 2013, as long as a general claim for compensation has been made before 19 June 2012, the 2012 amendments do not apply to a worker’s right to recover lump sum entitlements.

Brief background

The worker sustained injury on 17 April 2010.  A general claim for compensation was lodged on 19 April 2010.  A formal claim for lump sum compensation under section 66 was made on 20 June 2012 for 6% WPI.  The claim was disputed on the basis the WPI assessment was not greater than 10%, as required by section 66(1) of the Workers Compensation Act, as amended.

The dispute was upheld by the President of the Workers Compensation Commission on the basis the claim for lump sums was made after 19 June 2012 and did not overcome the 11% threshold.  That decision has been overturned by the Court of Appeal.

The Court of Appeal decision

In a unanimous decision, the Court of Appeal found that the 2012 lump sum amendments do not apply to claims for compensation which were made before 19 June 2012, even if the lump sum claim was made on or after 19 June 2012. 

In the appeal the Court did not need to consider what constitutes a “claim” as it was conceded the worker had made a general claim for compensation prior to 19 June 2012.

The Court found that a worker has an entitlement or right to a benefit under section 66 that “accrues” at the time of injury, subject to subsequently establishing a permanent disability.

The Court held Regulation 11 in Schedule 8 of the Workers Compensation Regulations was invalid because it was inconsistent with provisions in the Workers Compensation Act .  That Regulation said, in part, that the lump sum amendments “extend to a claim for compensation made before 19 June 2012”.  The Court said: “To the extent that the transitional regulation [11] sought to prejudicially affect that right [to benefits under section 66], it was beyond power and invalid”.

Effectively, the Court found that any claim for lump sum compensation under section 66 for injuries suffered before 19 June 2012, are not affected by the 2012 amendments. 

What does this mean?

The effect of the decision of the Court of Appeal is that workers who suffered an injury before 19 June 2012 will be entitled to claim compensation under sections 66 and 67 under the pre-amendment regime, even if they do not make a lump sum claim until on or after 19 June 2012.

Those workers will not be subject to the amendments which repealed section 67 and limit the entitlement of workers to recover lump sum compensation under section 66 to assessments of more than 10% WPI.

A worker’s entitlement exists if a general claim for compensation has been made prior to 19 June 2012.  The Court of Appeal did not decide what constitutes a claim for this purpose.  It remains open to an insurer to deny liability if it can be established that no general claim was made, or, if an injury or aspect of any injury was not particularised in a claim before 19 June 2012.

It will be interesting to see whether the employer seeks special leave to appeal against the decision to the High Court, or whether the Government attempts to negate the Court’s decision by legislative amendment.

 

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