Calling for reform – MAIA: ‘simplification, clarification and not complication’

The Motor Accident Injuries Act 2017 (MAIA) came into force on 1 December 2017 and it has recently hit its second year anniversary. One would have thought that the dust has settled after two years in operation. To the contrary, its application in various aspects has proven a need for major reform. This article focuses on the drawn-out disputes on minor injury and a recent Supreme Court judgment on the interpretation of “no-fault” under MAIA.

MAIA provides for statutory benefits for claimants who have suffered wage loss regardless of whether or not they were at fault. However not only that the statutory benefits is capped at 5 years, for claimants mostly at fault, or with an injury that fits MAIA’s definition of “minor”, the benefits end after 6 months. In addition, there is no entitlement to common law damages for claimants who have suffered “minor injuries” but with a total whole permanent impairment (WPI) of greater than 10% as there is no interplay between minor injury and WPI in MAIA or Motor Accident Guidelines.

Minor or non-minor injury

Having considered 45 Minor or Non-Minor Injury case studies in 2018 and 2019 published by the State Insurance Regulatory Authority (SIRA), view the summary table, we provide our observations below:

• Claimants generally get assessed by MAS on such dispute at 8 months post-accident when generally injuries would not have been considered stabilised until at least 12 months post-accident under the old NSW CTP scheme.
• Multiple soft tissue injuries would not quality for non-minor.
• Whether the diagnosis is soft tissue, whiplash, strain, musculoligamentous or aggravation injury, it would generally fall under minor injury irrespective of disc pathology, reduction in range of motion, claimant’s capacity and severity of accident collision impact.
• Treating doctor’s finding of radiculopathy is irrelevant if clinical signs of radiculopathy is not present at the time of the MAS Assessor’s assessment.
• If a claimant developed new episode of PTSD, the condition will qualify as non-minor injury irrespective of pre-existing unresolved symptoms of PTSD.
• If a claimant experienced onset of an acute stress reaction lasting longer than 1 month, the condition will qualify for PTSD which is a non-minor injury.

In September 2019, various submissions from stakeholders including the Insurance Council of Australia, Law Society of NSW and NSW Bar Association were lodged with SIRA for review of the minor injury definition. Other than the general consensus that the terminology “minor” and “non-minor” injury should be changed to more generic terms, reasons provided for the review of the minor injury definition include the following:

• Lack of interplay between psychological injuries and minor injury definition.
• The requirement for an insurer to make initial decision regarding a minor injury within 3 months for an alleged psychological injury, can be very challenging, due to the nature of the injury and the time required to confirm diagnosis.
• The current minor injury definition leaves open to interpretation for injuries involving disc pathologies, concussion, dental and skin abrasions.
• Problems with defining what is a “soft tissue injury” and its relationships with age related degenerative changes shown on imaging.
• Lack of correlation between the minor injury definition and the impact of such injury to a claimant’s day to day life.
• The current minor injury definition does not take into consideration the significance of a past psychological history or that the event was a minor incident but as a result of multi-factorial reasons and external influences, appear to have resulted in a non-minor psychological injury.

No fault and statutory benefits

Under the old NSW CTP scheme and in a single vehicle accident where it falls under the blameless provisions, the driver of the vehicle is deemed at fault and the driver would have only been entitled to compensation for up to $5,000.

The recent Supreme Court decision in AAI Limited v Singh [2019] NSW SC 1300 (Singh) held that the statutory benefits payable to a driver of a single vehicle accident, who was not at fault, similar to the blameless provisions under the old CTP scheme, should not cease after 26 weeks. The circumstances of Mr Singh’s accident involved a truck, which carried an unsecured shipping container loaded by others, overturned and there was no fault on the part of Mr Singh or the owner of the vehicle.

The Court found that Part 3 of the MAIA, which deals with statutory benefits, is concerned with deeming the liable payer and not any potential person at fault. On the other hand, when considering Part 5 of the MAIA, which deals with common law damages, and has the effect of attributing fault to Mr Singh, the Court found that the words “not caused by the fault of any other person” in s 5.1¹ mean just what they say. It was held that Mr Singh’s accident was not a no-fault accident, as the person or persons who loaded the container may be negligent, thus Part 5 did not apply.

Importantly, the Court identified the inconsistency between s 5.1 and s 5.6² of MAIA and pointed out that “amendment will be necessary if a spate of litigation generated by the obscurities of these provisions is to be avoided”.

This decision is also relevant for claims under the old NSW CTP scheme as the wording of blameless provisions under s7A of the Motor Accidents Compensation Act 1999 (MACA), is essentially identical. In applying the Court’s interpretation of the words “not caused by the fault of any other person” in Singh, many of the existing pleadings relying on s7A of MACA will require revision as the broad interpretation of “any other person” calls for consideration of joining any potential person who may be at fault.

MAIA in 2021

Despite two years of operation, there remains many uncertainties as to claimants’ entitlement and insurers’ statutory obligations due to the current inadequate minor injury definition for both physical and psychological injuries and the contradictory sections under Part 3 and Part 5 of MAIA on ‘no fault’ accidents.

MAIA is certainly far from reaching its primary objective in providing a better balance of awarding compensation for motor accident claims. A claimant, who suffered a fracture injury which is automatically classified as a non-minor injury, can claim common law damages even though the fracture injury healed without complication. A claimant, who suffered soft tissue injuries to various body parts with ongoing symptoms and incapacity, would not be entitled to common law damages, because soft tissue injuries are minor.

When reviewing the minor injury definition, claimants and medical practitioners should be better informed about requirements of the minor injury definition. The period for the insurer to make a decision as to whether an injury is minor or non-minor should be extended to allow the availability of medical evidence.

Much work is needed in the next two years for providing all stakeholders clarification and guidance to ensure fair compensation for injured claimants, appropriate execution of insurer’s statutory duties and consistent assessment of disputes.