Are Parties to a Dispute Concerning Incapacity Bound by Findings of Permanent Impairment?

Are Parties to a Dispute Concerning Incapacity Bound by Findings of Permanent Impairment?

By Jackie Bedkober | March 2010 Area of Expertise | Workers Compensation

Summary Following the decision of President Keating in The Bright Group Pty Ltd v Akdeniz (2009) NSWCCLD 113, employers and insurers may find that they are precluded from arguing that the effects of an employment injury have ceased when a compensable permanent impairment caused by that employment injury exists.

Who Does This Impact?

Employers and Insurers.

What Action Should Be Taken?

Care should be taken to ensure that employers and insurers do not agree to compensate a worker for permanent impairment, if they intend to argue that the worker no longer suffers from a permanent incapacity as a result of the subject work related injury.

The Facts Ms Akdeniz commenced proceedings in the Commission seeking weekly and lump sum compensation together with a general order for medical expenses in respect of an injury arising as a result of using a press machine on 4 September 2003 and as a result of the nature and conditions of her employment for an unspecified period.

Following a conciliation/arbitration hearing, the lump sum claim was referred to Dr Breit, AMS, who ultimately assessed a 6% WPI of the cervical spine, a 4% WPI of the right upper extremity and a 0% WPI of the left upper extremity.

The remainder of the claim was subsequently listed for conciliation/arbitration hearing.

Prior to the arbitration, the parties reached agreement in respect of the claims under section 66 and 67. The Bright Group agreed to the entering of an award in Ms Akendiz’s favour in respect of a 10% WPI under section 66, in accordance with the Medical Assessment Certificate of Dr Breit and $7,500 under section 67 for pain and suffering.

The parties were unable to resolve the weekly claim and thus the matter proceeded to a contested hearing. On 30 March 2009, Arbitrator Minus ordered, amongst other things, that the respondent pay the applicant compensation pursuant to section 40 of the 1987 Act. The Bright Group appealed the decision of Arbitrator Minus, submitting in part that the Arbitrator should not have found ongoing incapacity.

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Are Parties to a Dispute Concerning Incapacity Bound by Findings of Permanent Impairment? by Jackie Bedkober

The Decision President Keating decided that Ms Akendiz’s complaints of ongoing symptoms, together with Bright Group’s acceptance of the existence of a compensable permanent impairment caused by the work injury, meant that the submission that the effects of the work injury had ceased was ‘untenable’ and accordingly, the appeal must fail.

During the course of the decision, President Keating noted that: •

The Medical Assessment Certificate of Dr Breit was not the subject of an appeal and was therefore conclusively presumed to be correct as to the degree of permanent impairment arising as a result of the injury pursuant to section 327(1)(a) of the 1987 Act;

•

The word ‘permanent’ has been held to mean, ‘will persist in the foreseeable future’: Brown v Grafton Base Hospital (2002) 24 NSWCCR 45;

•

Prior to the hearing, the parties agreed to an award being entered in Ms Akdeniz’s favour for compensation for permanent impairment under section 66 in accordance with Dr Breit’s assessment; and

•

While an assessment of disability under section 66 is different from an assessment of incapacity, the AMS’ assessment of permanent impairment was ‘binding evidence’ of a continuing disability as a result of the work injury. It was also ‘probative evidence’ that had to be weighed in the determination of Ms Akdeniz’s incapacity for work and her ability to earn in the labour market reasonably accessible to her.

At paragraph 108 of his Statement of Reasons, President Keating stated as follows: Bright Group’s submission on appeal that the effects of the work injury had resolved on or before 30 September 2004 and/or that at no time relevant to her application had Ms Akdeniz suffered the effects of the work injury, are inconsistent with its agreement on 18 February 2009 to pay compensation for permanent impairment under section 66 in respect of a 10% WPI.

To support this principle, President Keating cited a previous decision of Acting Deputy President Snell in Total Steel of Australia Pty Limited v Waretini (2007) NSWCCPD 33 at (39) wherein it was stated as follows: …if, for example, a worker fails in his weekly claim because there is a finding he has not suffered an injury, or the effects of the employment injury have ceased, such a finding is inconsistent with the existence of a compensable permanent impairment caused by the alleged employment injury… I accept… that ‘parties to a dispute concerning incapacity are bound by findings of permanent impairment’.

President Keating ultimately confirmed the decision of Arbitrator Minus and ordered that the respondent employer pay the costs of the appeal.

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Are Parties to a Dispute Concerning Incapacity Bound by Findings of Permanent Impairment? by Jackie Bedkober

Implications We stress that the impairment must be compensable. In our view this means as agreed by the parties or as concluded by an AMS. Of course, the principle is not relevant if it is found that the worker has no economic incapacity. It is still possible for an employer or insurer to argue that there is no weekly entitlement on the basis that there is no economic incapacity, even if in the context of compensable permanent impairment.

The Akdeniz decision has signiďŹ cance for most employers and insurers. This decision highlights that care should be taken when an employer or insurer considers whether they should agree to compensate a worker for permanent impairment. Any employers or insurers who are considering doing so should consider the Akdeniz decision and, if necessary, seek speciďŹ c legal advice.

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Are Parties to a Dispute Concerning Incapacity Bound by Findings of Permanent Impairment? by Jackie Bedkober

For more information, please contact: Jackie Bedkober Lawyer T: 02 8257 5730 jackie.bedkober@turkslegal.com.au

Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922 Melbourne | Level 10 (North Tower) 459 Collins Street , Melbourne, VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099 Insurance & Financial Services | Commercial Disputes | Workers Compensation | Business & Property

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