Which case won?

casea
The case for the insurance company
  • Our specialist doctor assessed your injuries as 5% Whole Person Impairment, well below the 20% threshold.
  • We immediately resumed paying you weekly compensation benefits as soon as your injuries were officially certified as satisfying the 20% threshold.
  • Until your injuries were officially certified at 21% Whole Person Impairment, you had no entitlement to ongoing weekly compensation payments.
  • We are not required to make any payments for the six month period, since the five-year limit cut off your benefits until you satisfied the official test to enable your payments to resume.
  • The payments system requires certainty, to test on any particular day whether you qualify for payments or not.
  • Official certification of permanent impairment cannot act retrospectively to satisfy that test.
caseb
The case for the worker
  • My inability to work hasn’t changed. I still couldn’t work during those six months, so I had no income.
  • My permanent injuries didn’t go away and then come back when certified. They were there the whole time.
  • My specialist doctor assessed me as having 49% Whole Person Impairment, well over the 20% threshold.
  • The official certification confirmed that I satisfied the 20% threshold, so the five year cut-off did not apply.
  • Therefore I should have been paid for the six months when my compensation payments were stopped.
  • Workers compensation laws are beneficial legislation, so they should be interpreted to the benefit of injured workers.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case A won. You were right!

How people voted
a20%
b80%

Expert commentary on the court's decision

Digby DunnDirector
“The president of the Workers Compensation Commission accepted the insurance company’s argument that operation of the workers compensation payment scheme requires certainty, otherwise there would be an unpredictable risk regarding when considerable back payments might be triggered.”
Initial decision by arbitrator in favour of worker

In the initial case of Frank Hochbaum v RSM Building Services Pty Ltd [2019] NSWWCC 31, the arbitrator decided in favour of the worker.

The insurance company was ordered to pay the missing six months of compensation benefits, with the arbitrator finding that once the 20% threshold is satisfied, the five year limit never applied, so the worker was entitled to be paid benefits for the entire period when his payments were stopped while he waited for the official certification of his impairment.

Insurance company successfully appeals arbitrator’s decision

The insurance company appealed and the government (State Insurance Regulatory Authority) also joined in the appeal case to argue about the interpretation of this legislation. On 18 April 2019, the president of the Workers Compensation Commission decided the appeal case RSM Building Services v Hochbaum [2019] NSWWCCPD 15 in favour of the insurance company.

The president determined that in the Workers Compensation Act 1987, section 39 as a whole must be interpreted in the present tense. This meant that the five year limit applied at all times from Christmas 2017 onwards, until the worker satisfied the criteria for further weekly payments to be made, by obtaining official certification that his injuries were greater than 20% Whole Person Impairment.

As a result, the worker had no entitlement to weekly compensation benefits during the intervening six months while waiting for completion of the official assessment process.

No need to interpret amendments to workers comp laws to benefit of injured workers

The president of the Workers Compensation Commission accepted the insurance company’s argument that operation of the workers compensation payment scheme requires certainty, “that it must be ascertainable on any given day whether section 39 applies to a specific worker”, otherwise there would be an unpredictable risk regarding when considerable back payments might be triggered.

The president also decided that the 2012 amendments to the workers compensation laws, including the five-year limit under section 39, were inserted as a cost-saving measure and were not beneficial provisions, so did not need to be interpreted to the benefit of the injured worker.

Decision has serious implications for workers compensation scheme and injured workers

This case has far-reaching consequences for many aspects of workers compensation claims. It hinders the ability of a worker to reach agreement with an insurance company to settle a permanent impairment claim.

It gives a strong incentive to insurers to delay the assessment process while they are not paying weekly benefits, knowing that they will not be required to back-pay for the delay. And it increases pressure on workers to rush for an early official assessment, despite the lifetime one-claim limit.

Appeal lodged against decision of Workers Compensation Commission

At the time of writing, a holding appeal has been lodged in the Court of Appeal, so there may be further consideration of these important matters.

To give one example, there was almost no mention in this decision of the well-established legal principles that first, the entitlement to compensation flows from the event of injury, and secondly, that permanent impairment compensation is fixed by the date of injury, regardless of the date of assessment or hearing.

It would seem an odd result to tell a worker who has lost a hand that he hasn’t actually suffered any loss until the injury is officially certified, months or years later.

Impact on insurance companies vs impact on injured workers

Likewise, giving priority to the potential uncertainty of when insurance companies might be required to make substantial back-payments seems to ignore the much more significant impact upon injured workers of not having those payments in the meantime, and being forced to wait months without payment, now without any prospect of ever seeing that money.

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