Recovering from the Dentist By Dominic Maait & Rana Halabi | October 2010 Area of Expertise | Workers Compensation Recoveries
Summary The NSW Court of Appeal has upheld a judgment of the Supreme Court allowing for a workers compensation insurer to recover treatment costs from a ‘grossly’ negligent dentist who caused further injury to a worker. As section 151Z of the Workers Compensation Act did not apply, the recovery was achieved through proceedings in the name of the employer and pursuant to the principles of unjust enrichment, contract law and Trade Practices Legislation.
Who Does This Impact? Employers and insurers whose liability for compensation has been increased due to the negligent treatment of a worker.
What Action Should Be Taken? Immediate consideration should be given to matters where treating medical practitioners have, through negligent treatment, aggravated or created whole new injuries, leading to an increase in the level of payments payable on a claim.
The Facts Mr Todd Dean was employed as a trainee arborist by Advanced Arbor Services Pty Ltd. In December 2001, whilst at work, Dean was struck on his chin by a log, causing minor injuries to his teeth and jaw. Advanced Arbor referred Dean to Dr Phung for treatment of his dental injuries. Liability for the payment of compensation was correctly accepted by GIO General Ltd (‘GIO’). Dr Phung undertook extensive treatment of the worker and reported to GIO that it was necessary as a result of the original work injury. The evolving treatment regime included Root Canal treatment of every tooth in the mouth. This was followed, astonishingly without referral to any specialist consultation, by the recrowning of all 28 teeth in the worker’s mouth. Payments charged to GIO by Dr Phung totalled $73,650. In April 2003, an independent examination of Dean determined that the treatment undertaken by Dr Phung was ‘an extremely poor dentistry job’ and in the most part, unnecessary. To add further insult to injury, the totality of the crowning had to be re-performed due to poor workmanship. Subsequent medical specialists concluded that as a result of Dean’s mouth reconstruction, he would require specialist dental care for the rest of his life.
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Recovering ffrom the Dentist by Dominic Maait & Rana Halabi
151Z Recovery not Available In order for an employer/insurer to recover compensation payments under s151Z, the initial work injury giving rise to the payment of compensation must occur at the same time as the third party’s negligence, giving rise to a right of the worker to claim damages from that third party. Since Dr Phung’s negligent treatment occurred after Dean’s initial work injury in December 2001, s151Z had no application.
The Supreme Court Proceedings GIO initiated proceedings against Dr Phung for recovery of the treatment costs paid to Dr Phung and for the extra costs required to rectify the worker’s problems caused by the negligent treatment. Since a claim under s151Z was not available, claims were instead made for a breach of contract, tort, restitution/unjust enrichment and for breaches of Trade Practices and Fair Trading legislation. Based on the overwhelming evidence prepared in the matter, a declaration was made by the court that ‘the standard of treatment provided by the defendant fell so far below proper professional standards as to be grossly negligent or inexcusably bad so as to constitute a novus actus interveniens.’ This effectively meant that the result of the dental treatment was a fresh injury not related to the original work injury. Out of the five causes of action pleaded, Justice Johnson found that the employer was entitled to succeed on four of them (given the first four were found in favour of the employer, his Honour chose not to decide the claim in tort for pure economic loss).
Appeal Dr Phung appealed mostly on technical grounds (relating to the naming of the employer as plaintiff and contract) however the Court of Appeal rejected those arguments and found the employer/GIO was entitled to the relief awarded by the Supreme Court. The appeal was dismissed with costs.
Implications Employers and workers compensation insurers have alternative legal avenues to recover payments against negligent medical providers who cause new injuries or increase the severity of a worker’s injuries. Claims portfolios should be checked for matters where the worker may sue a medical practitioner for negligent treatment. Since s151Z generally does not apply to such actions, neither the worker nor the negligent practitioner is required to make a payback of compensation. However, as a result of this decision, workers compensation insurers may now look to rely on alternative causes of action based on the principles of restitution/unjust enrichment, contract law and trade practices law in order to recover workers compensation payments made as a result of negligent medical treatment administered subsequent to a workplace injury.
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For more information, please contact: Dominic Maait Partner T: 02 8257 5726 dominic.maait@turkslegal.com.au
Rana Halabi Lawyer T: 02 8257 5749 rana.halabi@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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