Fairhall v Accident Compensation Corporation

IN THE DISTRICT COURT HELD AT WELLINGTON Decision No. 172 /2001 Al 164/00 UNDER The Accident Insurance Act 1998 AND IN THE MATTER of an appeal pursuant to section 154 of the Act BETWEEN MR J FAIRHALL of Motueka Appellant AND ACCIDENT COMPENSATION CORPORATION Respondent HEARD at NELSON on the 18th day of April 2001 DATE OF THIS DECISION: 5^ July 2001 APPEARANCES Appellant on his own behalf Ms M Ahern for respondent DECISION OF JUDGE P F BARBER The Issue [1] At issue is the respondent's 20 August 1999 decision that the appellant was entitled to an independence allowance payment of $24.97 per week. The concern of the appellant is that this independence allowance has been reduced from $33.97 per week as at mid 2000. [2] The appellant expressed concern that the above reduction was effected without any prior consultation with him and that the reason given was of a changed method of assessment to the appellant's disadvantage. The appellant emphasised that there has been no improvement in his condition and he still suffers from no vision in one eye and chronic intermittent back pain. He seeks that his independence allowance be restored to $33.97 per week retrospectively. [3] The appellant was also concerned that his allowance ever needed to be reassessed. With the assistance of Ms Ahern, it was explained to the appellant at the hearing that in terms of the Act his independence allowance needed to be 2 reassessed when it was; and also that he needed to make a fresh application for it in terms of s. 441(3)(d) of the Act. [4] Although the appellant appeared to understand and reluctantly agree with the case for the respondent, he wishes to receive my written decision. Accordingly, I now set the position out fairly fully and based on Ms Ahern's very helpful submissions. Background [5] The appellant suffered a back sprain in April 1987 for which he was granted cover. He received a $1,275 lump sum in relation to this claim. The appellant later suffered an injury to his eye in May 1997 as a result of an assault. Cover was also granted for that injury. [6] An independence allowance assessment under the Accident Rehabilitation and Compensation Insurance Act (ARCI Act 1992) using the Functional Limitations Profile Questionnaire was undertaken in September 1997. This resulted in a 92.5% disability score which entitled the appellant to an independence allowance of $33.97 per week. [7] On 1 July 1997 the ARCI Act was amended. The FLPQ tool for assessing independence allowance entitlement was replaced by the American Medical Association Guides to the Evaluation of Permanent Impairment (4" Edition) ("the AMA Guides"). [8] In February 1999 the appellant made a further application for the independence allowance. On 12 May 1999, Dr P Galloway carried out an independence allowance assessment using the AMA Guides. Dr Galloway considered both injuries for which the respondent had cover. The total whole person impairment calculated under the assessment was 37%. The independence allowance assessment was forwarded to Dr Shiach for peer review and Dr Shiach confirmed on 15 July 1999 that the assessment was correct. [9] The respondent deducted from the assessment 7.5% representing the lump sum compensation already received by the appellant. The respondent then calculated the independence allowance payments to be $24.97 per week on the basis of 29.5% impairment. [10] The appellant filed an application for review of that decision and sought to have his independence allowance reinstated at the amount he had received prior to the re- assessment. The Reviewer found that the assessor had not misdirected himself in the assessment and that the respondent Corporation's conclusions were correct. The Review was therefore dismissed. A Notice of Appeal to this Court was filed for the appellant. Relevant Legislation [11] Section 54 of that ARCI Act 1992 provides, inter alia: "54. Independence allowance- (1) Subject to this section, every person who has cover under this Act is entitled to receive an independence allowance at the appropriate prescribed rate if the person's personal injury has or personal injuries have resulted in a degree of whole-person impairment of 10 percent or more. (4 ) The assessment of a person's entitlement to the independence allowance shall be carried out in accordance with section 54A of this Act and if, and only if, the entitlement is established by such an assessment, it shall be payable in accordance with subsection (7) of this section." [12] Section 54A(1) of that Act provides: "54A. Assessment and reassessment- (1) For the purposes of section 54 of this Act, a person's whole-person impairment shall be assessed in accordance with regulations made under this Act." [13] The ARCI (Independence Allowance Assessment & Rates of Payment) Regulations 1997 came into force on 1 July 1997. Regulations 3 and 4 of those regulations provide: "3 . Assessment of whole-person impairment- Assessment of a person's whole-person impairment, for the purposes of sections 54 and 54A of the Act, must be carried out by an assessor using the American Medical Association Guides to the Evaluation of Permanent Impairment (Fourth Edition). 4. Assessors- The Corporation must appoint as many persons as it considers necessary to carry out assessments under regulation 3." [14] An assessor is defined in the regulation 2 as a person who is appointed under regulation 4. [15] Section 27 of the ARCI Amendment Act (No.2) 1996 amended the principal Act, effective from 1 July 1997, and provides: "27. Transitional provisions relating to independence allowance- (1) Any person who was, immediately before the date of commencement of this section, receiving the independence allowance shall be deemed to have been assessed under section 54 of the principal Act (as substituted by section 13 of this Act) as having a degree of whole- person impairment of 10 percent or more and, until reassessed under section 54A of that Act (as so substituted), shall continue to receive the allowance at the rate payable on that date. (2) On the reassessment of the person under section 54A of that Act (as so substituted), any adjustment to the rate at which the independence allowance is being paid shall, - (a) If the entitlement is to be reduced or is to cease, be effective 3 months after the date on which the person is notified of the Corporation's decision in respect of the level of impairment: 4 b) If the entitlement is to be increased, be effective as from the date of the certificate verifying the increase in impairment or from the date of commencement of this section, whichever is the later." [16] Section 441 of the Accident Insurance Act 1998 provides: "441. Independence Allowance- (1) Subsection (2) applies to- (a) A person to whom section 27(1) of the Accident Rehabilitation and Compensation Insurance Amendment Act (No.2) 1996 applies and who was not reassessed under section 54A of the Accident Rehabilitation and Compensation Insurance Act 1992 before 1 July 1999: (b) A person who, immediately before 1 July 1999, was received or was entitled to receive an independence allowance under section 54 of the Accident Rehabilitation and Compensation Insurance Act 1992: (c) A person who suffered a personal injury before 1 July 1999 and did not apply for an independence allowance before 1 July 1999. (2) Such a person is entitled to receive an independence allowance on and after 1 July 1999 under Part 4 of Schedule 1, as modified by- (a) Subsection (3); and b) Section 442(2)(a) and (b), if the person is a person to whom section 442(2) applies. (3) The modifications made by this subsection are as follows: (a) Such a person may not lodge a claim for an independence allowance under Part 4 of Schedule 1 for any injuries suffered before 1 July 1999: b) A person described in subsection (1)(a) receives the rate of independence allowance payable on 30 June 1997 as adjusted by section 71 of the Accident Rehabilitation and Compensation Insurance Act 1992 or section 460: (c) Any assessment under clause 60 of Schedule 1, or reassessment under clause 61 of Schedule 1, must be done on the basis of whole- person impairment for the combined effect of all his or her personal injuries covered by the former Acts, and only 1 independence allowance is payable for all those injuries: (d) As soon as practicable after 1 July 1999 the manager must require a person described in subsection (1)(a) to be reassessed in accordance with paragraph (c)." [17] Section 442 of the Al Act 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: (a) The independence allowance must be calculated by deducting, from any whole-person impairment assessed under clause 60 of Schedule 1, 5 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". Reasons for Decision [18] In 1997 the appellant was assessed as having an entitlement to an independence allowance using the FLPQ assessment tool. However, when the appellant reapplied for assessment in 1999, the tool for assessing the independence allowance was now the AMA Guides. The appellant's independence allowance entitlement was assessed in accordance with these guides as required by section 54A of the ARCI Act (as amended on 1 July 1997). [19] Dr Galloway, who undertook the assessment, is an appropriately qualified assessor. There is no evidence to suggest that the assessment was not carried out properly. Dr Galloway considered both injuries for which the respondent had cover and determined that the respondent had a 37% impairment. This was then reduced taking into account the lump sum which the appellant had received. [20] The appellant is dissatisfied that his independence allowance has been reduced despite the fact, in his opinion, his condition has remained the same. He believes he should be entitled to the same independence allowance. However, the appellant's initial independence allowance entitlement was assessed under the FLPQ method which is a subjective tool assessing a persons perception of their disabilities. The AMA Guides provide a more objective tool for measuring impairment. Therefore, the difference in assessment percentage using that tool is not surprising. Although the appellant submits that he should receive the same entitlement as he had under the earlier legislation, the legislation does not provide for that. [21] The appellant's situation is similar to that of many other appellants who have objected to the change in the independence allowance following the AMA Guidelines assessment technique. The cases of Needs (80/00) and Whitman (86/00) are two recent examples of this. In each case the Court drew attention to the differences between the subjective and objective assessment approach and has confirmed that it is bound by the assessor's assessment if this is properly undertaken. [22] Dr Galloway's assessments was carried out appropriately and in accordance with the legislation. [23] The Corporation's decision was issued after 1 July 1999 and therefore was issued with respect to the Al Act. The Al Act contains specific transitional provisions sections 441-442) regarding independence allowance entitlement for claimants who have suffered injuries prior to 1 July 1999. Schedule 1 of the Al Act also contains provisions regarding the independence allowance (clauses 58-62). The Al Act also provides for assessments to be undertaken using the AMA Guides. To that extent the assessment under this Act is the same. The only difference in the Al Act is that for multiple injuries each injury should be considered separately 6 whereas the ARCI Act enabled injuries to be considered together and only one independence allowance is payable under that Act. However, the transitional provisions in the Al Act preserve the global whole- person impairment assessments for injuries suffered before 1 July 1999. That is, all injuries are assessed together, and there is entitlement if the combined effect of all the cover to personal injuries is an impairment of at least 10% (section 441(3)(c)). [24] These transitional provisions are relevant to the current case as they enable the appellant's impairment for both injuries to be assessed together with a global whole-person impairment percentage ascertained. Section 442 also allows for the previous lump sum payment to be taken into consideration. [25] Section 441(1)(b) applies to the appellant as he was receiving an independence allowance under section 54 of the ARCI Act immediately prior to 1 July 1999. For all intents and purposes, the transitional provisions preserve the status quo under the ARCI Act in respect of pre-1July 1999 injuries. [26] The assessment which has been undertaken indicates that the appellant is entitled to an independence allowance. However, taking into account the lump sum received and assessing in relation to the AMA Guides, he is entitled to a slightly lower amount of independence allowance than he had been entitled to under the FLP criteria. [27] I find that the assessment has been properly undertaken in accordance with the procedure presented by statute and, therefore, the respondent's decision should be upheld. [28] For the above reasons, this appeal is hereby dismissed. Judge P F Barber District Court Judge Wellington Al164-00.doc(sh)