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Permanent impairment - Discounting for pre-existing conditions or previous injury

  • Newsletter Article
  • Published 17.06.2021
Marks v Secretary, Department of Communities and Justice [2021] NSWSC 306 and [2021] NSWSC 616

Key Takeaways

  • Injured workers whose injury results in a permanent impairment are entitled to payment of lump sum compensation pursuant to s66 of the Workers Compensation Act 1987 (the 1987 Act).
  • s322 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act), provides for assessments to be conducted ‘in accordance with the Workers Compensation Guidelines… issued for that purpose’.
  • s323 of the 1998 Act provides that:

In assessing the degree of permanent impairment resulting from an injury, there is to be a deduction for any proportion of the impairment that is due to any previous injury … or that is due to any pre-existing condition or abnormality. If the deduction is difficult or costly to determine, then it may be assumed that a deduction should be 10%, unless there is medical evidence to the contrary.

  • Just because a previous injury is asymptomatic at the time when a later impairment is being assessed, does not mean that the effects of the previous injury can be ignored. The impairment assessed for the later injury must be assessed and consideration then given to whether or not a previous injury or condition contributed to that impairment, and if so, what proportion of the impairment should be attributed to the earlier injury/condition.

Brief Facts

In the case of Marks an issue arose as to whether or not the Workers Compensation Guidelines for assessment of permanent impairment could override s323.

Mr Marks had previously worked with the NSW Police Force (Police) and, in 2011, had reported PTSD as a result of being threatened with a firearm. He claimed s66 compensation for permanent impairment, the degree of which was assessed at 22% WPI.

Mr Marks left Police and obtained work with the Department of Communities and Justice (DCJ). However, employment with DCJ resulted in a further psychological injury, being major depressive disorder. He subsequently made a claim for s66 compensation for that injury.

In the assessment of WPI, the WorkCover Guidelines provide that:

To measure the impairment caused by a work related injury or incident, the psychiatrist must measure the proportion of WPI due to a pre-existing condition. If the percentage of pre-existing impairment cannot be assessed, the deduction is one tenth of the assessed WPI.

The medical assessor determined that Mr Marks had 19% WPI as a result of a major depressive disorder attributable to employment with DCJ.

Mr Marks gave evidence that after leaving Police and working at DCJ, he felt much better and stopped receiving psychological treatment. He said that: ‘I feel like I made a full recovery’. On that basis the medical assessor declined to make a deduction pursuant to s323 for the effects of the previous psychological injury with Police.

Medical Appeal Panel

The failure to make a deduction for the previous injury was appealed and was referred to a medical appeal panel for consideration. The appeal panel stated:

The medical assessor applied the wrong test by considering that the fact that the worker was asymptomatic prior to the [later injury] was determinative of whether any section 323 deduction should be made.

The appeal panel made a general assessment of 19% WPI and then deducted one quarter pursuant to s323 in relation to the previous PTSD suffered by the worker even though it was asymptomatic. That reduced his assessment of impairment to 14% WPI, which was below the threshold required to claim permanent impairment compensation for the psychiatric injury.

Supreme Court Judgment

The worker sought judicial review of the appeal panel’s decision. The appeal was heard by Justice Simpson in the NSWSC. Justice Simpson made reference to an earlier case of Cole v Wenaline (NSWSC 2010) and quoted from that decision:

  1. The section 323 is directed to a situation where there is a pre-existing injury, pre-existing condition, or abnormality. For a deduction to be made from what has been assessed to have been the level of impairment which resulted from the later injury in question, a conclusion is required, on the evidence, that the pre-existing injury, pre-existing condition, or abnormality caused or contributed to that impairment.
  2. Section 323 requires that a conclusion be reached as to whether or not any proportion of permanent impairment assessed resulted from an earlier injury, pre-existing condition or abnormality.
  3. What section 323 required, however, was that the evidence be considered, so that it could be determined firstly what the level of impairment after the second injury was. Secondly, whether a proportion of that impairment is due to the first injury. Thirdly, what the proportion was.

The case of Cole was dealing with a physical injury not a psychiatric injury. An issue arose in the case of Marks as to whether or not the fact that the worker suffered from a psychiatric injury made a difference to how the deductible under s323 was to be calculated. Justice Simpson stated:

In Mr Marks’ situation, it was noted by the Court that the decision of the Medical Appeal Panel placed some emphasis on the previous psychiatric problems experienced by the worker in prior employment with NSW Police Force. The appeal panel considered that notwithstanding the plaintiff’s asymptomatic status at the time of his employment with the first defendant, he was nevertheless, by reason of his earlier experience of PTSD, rendered more vulnerable due to the subsequent harassment and vilification such that the earlier condition was ‘a significant factor’ in the assessment of the extent to which the current condition was caused by the events while he was an employee of [Police].

To take that vulnerability into account in the assessment of permanent impairment caused by the injury suffered in the defendant’s employ was, on the appeal panel’s reasoning, entirely consistent with section 323(1) but not in accordance with the relevant Workers Compensation Guideline. If the guidelines were to apply then a deduction for the pre-existing condition would not be available.

Justice Simpson concluded:

The more important question, which the plaintiff’s submissions did not address, is whether a pre-existing condition, notwithstanding that it is asymptomatic at the time of the injury in respect of which the assessment was undertaken, may, nevertheless, contribute to the degree of impairment. In respect of physical injuries, it has long been held that it can.

In the light of this consistent line of authority, section 323 must be construed as requiring a deduction from the assessment of the degree of permanent impairment of any proportion of the impairment that is due to ‘previous injury or pre-existing condition or abnormality, whether or not the pre-existing condition or abnormality is symptomatic at the time of injury.’ As noted in the preliminary reasons, the cases which have previously considered this question all related to physical injury. However,… section 323 does not distinguish between physical and psychiatric or psychological injuries. It applies to all injuries equally.

As to the worker’s argument that the guidelines should take precedence over the legislation, Justice Simpson stated:

The proposition that a guideline inconsistent with statute could take precedence is contrary to authority.

To the extent that the guideline excludes...consideration of any contribution made by a pre-existing but asymptomatic condition, is inconsistent with section 323 and invalid.


There have been many cases in which the effects of an earlier condition or injury, which was asymptomatic at the time of assessment of a later injury, was disregarded and no deduction allowed.

Marks confirms that such reasoning is incorrect, and that the medical evidence should be considered objectively to determine whether there remains a residual effect on a worker’s impairment resulting from an earlier injury or condition, despite the worker’s belief that he or she had recovered from an earlier injury or condition.