Fisher v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 330/2003 UNDER The Injury Prevention, Rehabilitation, and Compensation Act 2001 AND IN THE MATTER of an appeal pursuant to Section 149 of the Act BETWEEN MARGARET ELIZABETH FISHER of Huntly Appellant (Appeal No. AI 290/03) AND - ACCIDENT COMPENSATION CORPORATION a body corporate duly constituted under the provisions of the said Act Respondent HEARING at HAMILTON on 4 November 2003 APPEARANCES/COUNSEL G. Walsh for appellant J.R. Sumner for respondent RESERVED JUDGMENT OF JUDGE J. CADENHEAD The Issue [1] The issue in this case is the interpretation of s.442 of the Accident Insurance Act 1998 as to the proper method of assessing the deductions required under the legislation pursuant to s.442(1)(a), (b) and (c) of the legislation. https://openlawnz-my.sharepoint.com/personal/andrew_openlaw_nz/Documents/ACC Decisions (DC appeals)/2003/330- 2003.doc AE [2] For the appellant, it is submitted that the deductions are confined, or must be related to, the specific injury that is assessed for the independence allowance, while for the respondent, it is submitted that it is necessary to calculate the degree of permanent loss or impairment arising to a whole-person impairment, and assessment would be then subject to deduction for payments made to a claimant pursuant to s.78 of the Accident Compensation Act 1982. Narrative of Facts [3] The appellant has sustained a number of injuries including: [a] A noise induced hearing loss suffered on 8 September 1990; [b] A left knee injury suffered on 19 December 1990; and [c] A left hip injury suffered on 24 March 1995 as a result of medical misadventure during a total hip replacement operation for osteoarthritis. [4] The respondent provided the appellant with a number of entitlements, and these have included; [d] A lump sum compensation payment of $6,579 under s.78 of the 1982 Act on the basis of a 38.7% lump sum impairment percentage for the hearing loss; and [e] A lump sum compensation payment of $1,275 under s.78 of the Accident Compensation Act 1982 on the basis of a 7.5% lump sum impairment percentage for the left knee injury. [5] The appellant’s total lump sum impairment percentage for these two injuries was consequently 46.2%. [6] In December 1999, an independence allowance assessor, Mr Ian Brown, orthopaedic surgeon, assessed the appellant’s whole person impairment based on her left hip injury only. He concluded that the appellant’s whole person impairment was 30%, but he apportioned a 15% impairment to the personal injury for which she had cover (medical misadventure suffered during a total hip joint replacement). On the 330-2003 2 basis of Mr Brown’s assessment, the respondent declined the appellant’s application for an independence allowance, as her total lump sum impairment percentage was subtracted from her assessed whole person impairment, and did not exceed the 10% threshold required to establish an entitlement to an independence allowance. [7] On 1 August 2002, the appellant applied for an independence allowance in respect of her left hip injury, and attached a medical certificate completed by Dr P.J. Harrison as to the stability of that injury. [8] By letter dated 30 October 2002, the respondent advised the appellant that she would need to undergo an independence allowance assessment in order to assess her entitlement to an independence allowance. The respondent further advised the appellant that the assessment would consider her left hip injury, her left knee injury and her hearing loss. [9] On 5 November 2002, the appellant was assessed by Dr Ken Couper, an appointed independence allowance assessor. In his assessment report Dr Couper concluded that: [f] The left hip injury resulted in a whole person impairment of 20%; [g] The left knee injury resulted in a whole person impairment of 4%; [h] The hearing loss resulted in a whole person impairment of 5%, and the associated tinnitus resulted in a whole person impairment of 1%. [10] As a result, the appellant had a total whole person impairment of 28% as calculated under the American Medical Association Guides to the Evaluation of Permanent Impairment. This calculation in the light of Dr Percival appears incorrect: the figure should be 30%. [11] This assessment was peer reviewed by Dr Rob Percival, medical adviser. In his peer review Dr Percival: [i] Noted an error by Dr Couper in determining the appellant’s whole person impairment for the left hip injury and stated that it should be 30% rather than 20%. 330-2003 3 [j] Questioned the lack of apportionment of the hip impairment percentage between the impairment that would have resulted from the appellant’s total hip replacement if a good outcome had been obtained, and the impairment resulted from the personal injury for which the appellant had cover; and [k] Further noted an error in the assessment of the appellant’s left knee injury, and stated that the whole person impairment for that injury should be 1% rather than 4%. [12] Dr Percival did not, however, determine the appellant’s total whole person impairment based on the three injuries for which she had cover. [13] By letter dated 25 November 2002, the respondent advised the appellant that she was not entitled to an independence allowance, as her total lump sum percentage of 46% awarded under the 1982 Act was subtracted from her current whole person impairment percentage of 28%, and did not exceed the 10% threshold required to establish an entitlement to an independence allowance. [14] The appellant lodged an application for a review of the Corporation’s decision. The review was heard on 12 February and 21 May 2003, and the review decision dated 23 May 2003 upheld the Corporation’s decision. Medical Reports Since the Review Decision [15] Since the review decision Mr David Clews has filed a medical report in support of the appeal. In his report dated 27 August 2003, Mr Clews concluded that the appellant’s left hip injury resulted in an impairment of 30%. Mr Clews stated that he had calculated the appellant’s whole personal impairment by reference to the American Medical Association Guides to the Evaluation of Permanent Impairment. [16] The respondent has obtained a further medical report from Dr Kevin Morris, who is a corporate medical adviser for the Corporation. In his report, Dr Morris states that he has used both the 4th AMA Guides and the ACC User Handbook, and he notes the following extract from the Handbook: “An impairment may be the result of multiple conditions, not all of which are covered by ACC. In this situation, apportion the percentage to covered and non- covered impairments.” 330-2003 4 [17] Dr Morris in his report comments: [l] A total hip replacement with a good outcome results in a whole person impairment of 15%; [m] The appellant’s left hip injury results in a whole person impairment of 30%; [n] As the appellant only has cover for the poor outcome of a total hip joint replacement, it is appropriate to apportion her hip impairment percentage as provided for in the Handbook; [o] The personal injury for which the appellant has cover results in a whole person impairment therefore of 15%; [p] The appellant’s left knee injury results in a whole personal impairment of 1% rather than 4%, and [q] Combining the impairment percentages for all injuries for which the appellant has cover, the appellant has a whole person impairment of 21% as assessed under the appropriate guide. The Statute [18] The relevant statutory provisions are governed by the provisions of the 1998 Act by virtue of s.377 of the Injury Prevention Rehabilitation and Compensation Act 2001. [19] Section 442 provides: “442 Entitlement to independence allowance of persons who received lump sums under former Acts and suffer further impairment. [(1) Subsection (2) applies to a person who received a payment for personal injury by accident under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982.] (2) Such a person may apply [under section 441] for an independence allowance under Part 4 of Schedule 1. That Part applies subject to the following modifications: 330-2003 5 (a) The independence allowance must be calculated by deducting, from any whole-person impairment assessed under [clause 60 of Schedule 1, or reassessed under clause 61 of Schedule 1,] any percentage permanent loss or impairment of bodily function for which any payment was made under section 119 of the Accident Compensation Act 1972 or section 78 of the Accident Compensation Act 1982: [(b) An independence allowance payable as the result of an assessment under clause 60 of Schedule 1 is payable from the date of the application for it.]” [20] It is interesting to note that section 442(1) as originally enacted on 18 December 1998 provided: “(1) Subsection (2) provides applies to a person who- (a) Suffered personal injury by accident within the meaning of the Accident Compensation Act 1972 or the Accident Compensation Act 1982 before 1 July 1992; and (b) Received a payment for the personal injury under section 119 of the Accident Compensation Act 1982; and (c) On or after 1 July 1992 suffered an increased degree of permanent loss or impairment of bodily function resulting from the personal injury.” [21] This section did not come into force until 1 July 1999, but it was revoked and repealed by the present section 442(1), which was effective from 1 July 1999. The difference in emphasis is that the later enactment provides that the independence allowance is upon the whole-person impairment assessed from which is deducted any percentage permanent loss or impairment of bodily function for which any payment was made. It seems clear to me that what is to be assessed is the whole- person impairment. [22] Clause 58 of Part 4 of Schedule 1 provides: “Independence allowance (1) The insurer is liable to pay the insured an independence allowance at the rate set in clause 62, if— (a) The insured has suffered personal injury for which he or she has cover; and (b) An assessment carried out under clause 60 establishes that that personal injury, for which the insured lodged the claim for cover, has resulted in a degree of whole-person impairment of 10% or more,— 330-2003 6 but this subclause is subject to subclause (2). (2) The insurer is not liable to pay the insured any amount of independence allowance in excess of 100% whole-person impairment for mental injuries— (a) That he or she has cover for under section 40; but (b) That together are over 100% whole-person impairment.” [23] Clause 60 of the Schedule 1 provides: “60 Assessment of entitlement to independence allowance (1) The insurer must appoint, and pay, as many assessors as it considers necessary to do assessments under this clause. (2) An assessor assesses the insured's percentage of whole-person impairment arising from each claim that is referred to the assessor for assessment. (3) An assessor must do the assessment after the insurer receives a certificate under clause 59(1). (4) In doing an assessment under this clause, an assessor must— (a) Use the American Medical Association Guides to the Evaluation of Permanent Impairment (Fourth Edition) (subject to any regulations made under section 403(2)); and (b) Exclude from the assessment any impairment that does not result from the personal injury for which the insured lodged the claim for cover. (5) The insurer must notify the insured of— (a) The assessed degree of whole-person impairment; and (b) The rate of independence allowance payable, if any. (6) The insurer must pay the reasonable costs associated with the assessment.” [24] Under the 1998 Act an entitlement to an independence allowance must be assessed as follows: [r] A claimant’s whole person impairment is to be assessed by an appointed independence allowance assessor using the 4th AMA Guides. [s] The assessor must exclude from the assessment any impairment that does not result from a personal injury for which the claimant has cover. 330-2003 7 Legal principles [25] The cases of Smith v ARCIC (Napier HC, Greig J, AP 83/96, 24 April 1997 and ARCIC v Allen (Wellington HC AP 100/96, Gallen and Gendall JJ, 14 May 1997) have considered the approach to the basis for the calculations as the deductions for previous amounts received by way of lump sums against an assessed independence allowance. Those principles appear to be: [t] The intent of the legislation is those who have previously received lump sums under previous Acts should give credit for that and those lump sums should be taken into account in calculating the independence allowance. [u] The statute was clear the legislation simply required the earlier percentage of incapacity simply be deducted from the percentage assessed. There was no necessity to employ a more complicated formula. [v] The degree of disability assessed for the independence allowance related to a functional limitation profile based upon the whole person. The principle was double compensation was not to occur and account must be taken of previous compensation payments. [w] While the assessments may be made on a different basis because of changes in the legislation, the clear purpose and intent of the legislation was that there should be a simple subtraction process in reducing the percentage of disability. [26] The case of Leach v ACC (AI 439/02, Beattie DCJ, 24 July 2003) on close analysis does not conflict with these principles. In that case his Honour was, also, dealing with a discrete injury, which previously had not been the subject of a compensation payment. However, other injuries had previously been the subject of lump compensation payments. His Honour applied the principle of no double compensation and did not see how those other payments should be part of a deduction. The assessment for the independence allowance had not take into account these other discrete injuries. 330-2003 8 Decision [27] I consider that the facts of Leach (supra) are different from the present case. Here the assessment for the independence allowance is on the basis of a “whole- person impairment”. That being the case deductions are required to be made for previous lump sum payments previously received. If these payments were not taken into account the principle of double compensation would be infringed. [28] Even taking the figure of 30% whole person impairment for the appellant’s hip, without a of deduction of 15% for an impairment not arising from her covered injury as outlined by Dr Morris and deducting the previous lump sum for the other two injuries re-assessed as 46.2% results in a figure well below the threshold requirement of 10%. The assessment here was on a whole-person impairment basis and the statute contemplates a simple percentage deduction for amounts that had previously been paid. [29] I called for further submissions from counsel. I record my appreciation of those submissions and the help that I have received from them. [30] For the reasons that I have given I would dismiss the appeal. No order for costs is made DATED at AUCKLAND this ……18th……. day of ………December…..….. 2003 (J. Cadenhead) District Court Judge 330-2003 9