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Consent orders and judgments: their role in avoiding liability for impairment stemming from subsequent injuries

  • Newsletter Article
  • Published 27.05.2024

Wright v State of New South Wales (NSWCA 2024)
 

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Key Takeaways

The Court of Appeal recently determined that impairment stemming from an injury for which the employer was not liable due to an award/judgement in its favour could not be causally related to an early accepted injury due to the operation of that award/ judgement. This decision creates an exception to the application of common law causation principles in permanent impairment assessments, and likely to determinations for other types of compensation.

Background

The worker commenced employment with the State of NSW in August 2012. During the course of that employment, the worker sustained a psychological injury. A dispute arose as to the employer’s liability for the injury deemed to have occurred on 5 December 2018. Proceedings were commenced in the Workers Compensation Commission (as it was then known) and the matter resolved by consent on 6 November 2020.

Specifically, orders 1 and 5 of the Certificate of Determination (COD) agreed that there should be an award in favour of the employer in respect of what was described as ‘the additional injury’. This was described as being further aggravation and exacerbation of the worker’s psychological condition as a result of interactions at work subsequent to 5 December 2018.

The worker later made a claim for lump sum compensation, which was denied by the employer. The worker commenced further proceedings in the Personal Injury Commission (PIC). The PIC referred the dispute to a Medical Assessor (MA) to assess the degree of the worker’s permanent impairment resulting from his accepted injury of 5 December 2018 (deemed).

The MA issued a Medical Assessment Certificate (MAC), which assessed the worker as having 19% whole person impairment (WPI). The employer appealed the MAC, contending that the MA had erred as he had included in his assessment impairment which resulted from ‘the additional injury’ for which there was an award in its favour. The Appeal Panel (AP) affirmed the MAC and the employer sought judicial review of that decision.

In the Supreme Court, the primary judge found the MA had exceeded his statutory jurisdiction by taking into account matters that he was required not to take into account, and that the AP erred in failing to identify this. The worker appealed against this decision.

Decision

On appeal, the worker contended that based on the established principles of causation [see State Government Insurance Commission v Oakley (1990) 10 MVR 570; Secretary, New South Wales Department of Education v Johnson (NSWCA 20219), it was open to the MA to take into account the aggravation and exacerbation occurring in the workplace after 5 December 2018 in considering the extent of his impairment resulting from the accepted 5 December 2018 injury, if the aggravation and exacerbation itself was caused, or contributed to, by that earlier injury. This was despite the award in favour of the employer for that injury.

Justices Stern, Gleeson and Mitchelmore of the Court of Appeal unanimously dismissed the worker’s appeal. In doing so, they held that the effect of the award in favour of the employer should be construed as reflecting agreement between the parties that the worker could not claim under the legislation in respect of the claimed aggravation and exacerbation of his psychological condition resulting from incidents subsequent to 5 December 2018.

The flow on effect from that finding was that it was not open to the MA or AP to consider whether any impairment stemming from ‘the additional injury’ was caused or attributable to the accepted injury on 5 December 2018, as that issue had been resolved by the consent orders. That is, the MA was able to consider any aggravation or exacerbation to the worker’s condition after 5 December 2018 so long as he excluded impairment resulting from ‘the additional injury’.

Implications

This decision sets an important precedent in NSW for workers compensation cases.

Since the decision in Johnson was handed down in 2019, there has been a large volume of cases in which a worker pursues a claim for an injury against one employer notwithstanding that a subsequent injurious event has occurred, either within the same employment or separate to it. In such cases, in applying Johnson, the Commission and appellate Courts have consistently found that when the initial injury caused the subsequent injury to occur or made its effects worse than they would have been, the additional incapacity/impairment flowing from the subsequent injury was determined to be causally related to the initial injury. As such, employers were finding that they were being held liable for impairment and incapacity that occurred due to events that might be outside of their employment relationship with a worker.

While this case does not disturb that principle, it does provide employers protection from those principles in situations where there is an award or judgment in their favour for the subsequent injury. That is, where there is an accepted injury and then a subsequent injury for which the employer is agreed or found not to be liable, a worker cannot assert that the effects of that subsequent injury are causally connected with the accepted injury to warrant an increase in their impairment or incapacity.

While this decision related solely to a permanent impairment assessment, it would seem logical that the general principle applies to all claims for compensation.

Of course, it will still be important to identify the specific terms of an agreement or judgement to ensure that there is nothing within that agreement or judgement that precludes reliance on the principle established in this case.