INSIGHTS: Lowering of two key Wrongs Act thresholds in Victoria

May 9, 2016

The Wrongs (Amendment) Act 2015 (Vic) came into effect in Victoria in November 2015. It introduced a number of changes to damages assessments and eligibility thresholds.

A key change was the lowering of the threshold level of impairment required for an injured person to be eligible to recover non-economic loss damages (pain and suffering damages) for a significant injury as follows:

  • For spinal injuries – a reduction in the threshold level from one which exceeds 5% whole person impairment to one which equals or exceeds 5% whole person impairment.
  • For primary psychiatric injuries – a reduction in the threshold level from one which exceeds 10% whole person impairment to one which equals or exceeds 10% whole person impairment.

On their faces, these changes may appear minor and insignificant. However, whole person impairments, especially for complex and multifactorial injuries, are generally assessed by reference to an analysis of aggregating the different impairment effects of the injury and its sequelae.

Hence, the effect of the lowering of the thresholds is such that injuries that may never have exceeded the relevant threshold of 5% and 10% whole person impairment, may now be capable of reaching those thresholds.

A ‘second bite at the cherry’ for pain and suffering damages? Not in Victoria

Case review: Stapleton v Central Club Hotel & ors

The court’s ruling in Stapleton v Central Club Hotel & ors, handed down on 17 February 2016, deals with whether the amending legislation allows a plaintiff to rely upon a new certificate of impairment assessment under the new legislation (and hence the lower threshold) where the plaintiff had previously served a certificate of impairment assessment, been referred to the Medical Panel, and been ‘knocked back’ by the Medical Panel.

The facts

The plaintiff suffered an injury to her right knee when she fell at a venue in Richmond, Victoria. In the course of receiving medical treatment for the knee injury, the plaintiff suffered a further injury in the form of a psychiatric injury. The plaintiff sued the venue where she fell, as well as her treating medical practitioner and the hospital where she was treated for her knee injury. The plaintiff obtained a certificate of impairment assessment dated 29 August 2012 in respect of her psychiatric injury, and served it on the defendants.

The defendants exercised their rights to refer the plaintiff to the Medical Panel to make a determination whether the claimed psychiatric injury satisfied the relevant threshold, which, at the time, was required to exceed 10% of whole person impairment.

The Medical Panel examined the plaintiff and made a determination that the psychiatric injury the subject of the claim did not exceed the then applicable threshold level.

The effect of the Medical Panel determination was to preclude the plaintiff from making any claim for compensation for the non-economic loss (i.e. pain and suffering damages) consequences of her psychiatric injury.

The plaintiff then obtained a fresh certificate of impairment assessment dated 21 January 2016, which purported to assess her degree of impairment resulting from the claimed psychiatric injury as satisfying the reduced threshold established by the amending legislation.

The defendants objected to the plaintiff relying upon the fresh certificate on the basis that the issue had already been determined by the Medical Panel.

The issue

The issue for adjudication in this application ruling was whether the amending legislation had retrospective application so as to displace a previous Medical Panel determination which was made prior to the amending legislation having come into effect.

In other words, does a plaintiff who was previously knocked back by the Medical Panel have a further opportunity to satisfy the reduced threshold level under the now amended legislation?

The ruling

The plaintiff’s application failed. There is no second bite at the cherry under the amending legislation. The existing Medical Panel determination is binding on the court. Needless to say, this is a favorable ruling for defendants and insurers.

His Honour, Judge Saccardo, relevantly stated that:

The Medical Panel finding in this instance, that the psychiatric injury with which the plaintiff presents did not meet the relevant statutory threshold, continues to have the effect of shutting the plaintiff out from any right to pursue a claim for non-pecuniary loss damages with respect to that injury in this proceeding; and

The amending Act does not entitle the plaintiff to rely upon the Further Certificate, as to do so would be contrary to s28LF(2)(aa) of the Act.

For more information contact Tamir Katz, Senior Associate or Kellie Dell’Oro, Principal, Meridian Lawyers.