Previous Injuries and the Application of a Deduction under Section 323 by TurksLegal

Previous Injuries and the Application of a Deduction under Section 323 By Amanda Malouf | September 2010 Area of Expertise | Workers Compensation

Summary In the decision of Cole v Wenaline Pty Limited [2010] NSWSC 78, Justice Schmidt considered how an earlier non-compensable injury should be taken into account when assessing the degree of permanent impairment following a subsequent, compensable injury. Her Honour held that before a deduction under Section 323 could be made, consideration must be given to the evidence led as to the actual consequences of the earlier and later injuries and whether the earlier injury contributed to the permanent impairment identiﬁed after the later injury.

Who Does This Impact? Employers and Insurers dealing with claims for lump sum compensation.

What Action Should Be Taken? Assumptions should not be made when determining the relevant deductible to be applied in respect of a prior injury, pre-existing condition or abnormality.

The Facts COMMISSION PROCEEDINGS Mr Cole (‘the worker’) injured his lumbosacral spine in October 2005, while he was manoeuvring a 44 gallon drum of oil and fuel. He had worked as a Farm Labourer for Wenaline Pty Limited (‘the defendant’) for a period of six years prior to the injury. Liability for injury was accepted. The worker had previously suffered a lower back injury to the same level of the spine in 1976, for which he had undergone surgery. In February 2008, the worker underwent a lumbosacral discectomy and subsequently made a claim for lump sum compensation under Section 66 of the 1987 Act. In November 2008, the worker was assessed by an Approved Medical Specialist (AMS), who concluded that the worker had a 16% Whole Person Impairment (WPI). This ﬁgure comprised 10% WPI for falling within DRE Category III, with an additional 3% for interference with activities of daily living and a further 3% for the persistence of radiculopathy post-surgery. The AMS then made a deduction of 50% pursuant to Section 323 on the basis of three facts: 1.

The previous history of disc surgery at the same level in 1976;

The worker’s history of ‘niggling pain and stiffness’ ever since the 1976 surgery; and

The fact that there were ‘…signiﬁcant degenerative changes present in the lower lumbar spine’ at the time of the injury in October 2005.

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Previous Injuries and the Application of a Deduction under Section 323 by Amanda Malouf

APPEAL PANEL DETERMINATION The worker appealed against the decision of the AMS on the basis that the AMS had erred in the application of Section 323 to the facts. There was no issue that the worker’s injury fell within DRE category III and no dispute as to the assessment of 16% WPI. There was also no issue that there had been an earlier injury in 1976 to the worker’s back, which arose for consideration under Section 323. The issue for the Appeal Panel was whether any proportion of the worker’s permanent impairment was due to his previous injury, that having been assessed by the AMS as contributing to 50% of the impairment. The majority of the Appeal Panel (being the two Approved Medical Specialists) agreed with the AMS’ deduction of 50%. The view of the majority was that, irrespective of the outcome of the earlier procedure to the spine, there was a level of impairment present prior to the second injury which must have contributed to the impairment assessed after the second injury, thereby warranting a deduction under Section 323. It was pointed out that at the present time, a person who undergoes a successful operation of the lumbar spine and obtains an excellent recovery is still assessed as having a 10% WPI according to AMA5 and the WorkCover Guides. Accordingly, if the worker had been examined prior to the injury in October 2005, he ‘would certainly have rated a level of WPI’. The Arbitrator of the Appeal Panel took a different view to the majority, concluding that a deduction pursuant to Section 323 was not warranted in the circumstances. The Arbitrator took the view that the mere existence of a pre-existing condition which made a person more vulnerable to subsequent injury, could not of itself result in a conclusion that it had contributed to an impairment which followed a later injury. The evidence had to conclude that a contribution had actually occurred. The Arbitrator disagreed with the rationale adopted by the majority of the Panel that ‘the worker had a previous problem at the same (L5-S1) disc level, so that level was already abnormal and ‘set’ for further problems in the future’, as this interpretation did not explain how the previous injury contributed to the worker’s current level of impairment. It was simply a statement that because there had been previous injury to the L5/S1 disc, the disc was now more vulnerable to injury. As to impairment following the ﬁrst injury, the Arbitrator noted the following: •

There was no evidence that there was any residual radiculopathy following the 1976 surgery.

•

There was no evidence that the worker suffered any restriction in his activities of daily living prior to the injury on 25 October 2005.

•

There was also no evidence that the prior surgery contributed to either the current residual radiculopathy or the current restriction in activities of daily living.

•

If the October 2005 injury had not occurred the worker would probably have continued as he was without radiculopathy or restriction.

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Previous Injuries and the Application of a Deduction under Section 323 by Amanda Malouf

Supreme Court Decision The worker sought orders under section 69 of the Supreme Court Act 1970, quashing the decision of the Appeal Panel on the ground of judicial error in respect of the application of Section 323. Justice Schmidt stated that the majority of the Appeal Panel proceeded on the assumption that, even though the treatment of the first injury to the spine was successful, the very fact of the existence of that prior injury resulted in an impairment which must have contributed to the impairment which arose after the second injury. As indicated by the majority, ‘hypothetically speaking’, if the worker had been examined before the second injury, he would have been assessed as suffering from a 10% WPI under AMA 5. Her Honour held that Section 323 did not permit an assessment to be made on the basis of an assumption or hypothesis that once a particular injury had occurred, it will always, ‘irrespective of outcome’, contribute to the impairment flowing from any subsequent injury. What an assessment under Section 323 required was consideration of the evidence as to the actual consequences of the earlier and later injuries. What then had to be determined was the extent that the later impairment was due to the earlier injury, preexisting condition or abnormality. The only exception was when the assumption provided in Section 323(2) applied, that is, where the required deduction would be ‘difficult or costly to determine’, in which case a 10% deductible is to be assumed. Her Honour was unable to accept that the majority of the Appeal Panel understood and applied the Section to the evidence in this way. The evidence suggested that the degree of impairment before and after the second injury was quite different. The majority of the Appeal Panel failed to explain why the degree of permanent impairment present after the second injury was found to be due to the previous injury, other than by reference to the assumptions as outlined above. Her Honour also pointed out that the majority’s method of assessment was illogical. As indicated earlier, the Panel proceeded on the assumption that, if there was to be an assessment of permanent impairment following the 1976 injury, it would have been 10%. However, the Panel also accepted the AMS’ assessment of 16% WPI, which comprised a 10% WPI for falling within DRE Category III. This approach appeared to reflect the view that there was no difference in the worker’s level of impairment following the earlier and later injuries. Notwithstanding this, the majority also accepted that a deduction of 50% to account for the prior injury was correct, leaving a final assessment of 8% WPI. Her Honour concluded that the majority conducted its assessment on a basis ‘inconsistent with what Section 323 required’. Accordingly, she ordered that the Decision be quashed and the matter be referred to the Appeal Panel to be dealt with according to law.

Implications The decision in Cole highlights that assumptions should not be made when determining the relevant deductible to be applied in respect of a prior injury, pre-existing condition or abnormality. Section 323 does not provide that the mere existence of a previous injury to the same body part automatically results in a deduction to the worker’s assessment of permanent impairment, even in circumstances where the worker underwent surgery for the earlier injury. An assessment under Section 323 should be made based on the evidence led in each case, in particular, evidence as to the consequences ﬂowing from the earlier and later injuries. What then must be determined is whether the earlier injury in fact contributed to the permanent impairment identiﬁed after the later injury.

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Previous Injuries and the Application of a Deduction under Section 323 by Amanda Malouf

In circumstances where a worker makes a claim for lump sum compensation and it is evident that earlier injury to the same body part had been sustained, care should be taken to gather as much evidence as possible (in the form of clinical notes, statements etc) regarding the nature of that earlier injury and the consequences ďŹ&#x201A;owing from it.

For more information, please contact: Amanda Malouf Lawyer T: 02 8257 5781 amanda.malouf@turkslegal.com.au

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