The Devil is in the detail – whole person impairments, s71 claims and offers to settle

26 June 2023

An offer to accept a whole person impairment percentage pursuant to section 71 of the Act 'if we are agreed' was held to be an offer to settle and in the absence of acceptance, could be validly revoked.

In issue

  • Amongst other issues, the Tribunal was tasked with determining whether the worker’s entitlement under section 71 of the Workers Rehabilitation and Compensation Act 1988 (Tas) (‘the Act’) had been settled by agreement.

The facts

In 2021 the worker made a claim for compensation, having experienced pain in his right shoulder blade whilst working with a forklift. The claim for compensation was accepted by the employer and payments of compensation commenced in accordance with the Act.

On 3 June 2022 the worker’s solicitors filed a referral in the Tribunal pursuant to section 71 of the Act seeking payment of a lump sum for whole person impairment (WPI). That was on the basis the worker had been diagnosed as having suffered a work-related cervical spine injury, which had necessitated surgery.

The section 71 referral was listed for a conciliation conference on 24 August 2022.

On 16 August 2022 solicitors for the employer sent an email to the solicitor for the worker which said ‘the claim from my client’s point of view is not in dispute’, referring to the worker’s broader claim for compensation. The email then provided that ‘in terms of your client’s s71 referral… We are instructed to agree to your client’s assessment from Prof Hand of 36% WPI… If we are agreed in this respect, we note the upcoming conciliation conference can be disposed with’.

The next day, solicitors for the employer emailed the solicitors for the worker effectively withdrawing the offer stating their client had given further instructions ‘they are not yet in a position to agree on the WPI at this stage’.

The worker’s solicitor contends steps were taken to dispense with proceedings in response to the email of 16 August 2022.

Position of the parties

Solicitors for the worker sought an order from the Tribunal confirming the worker’s section 71 claim had settled and determining the level of the worker’s WPI.

The employer denied the claim had been resolved and further claimed that, if the worker was correct and his section 71 claim had indeed settled, the worker’s right to claim compensation under section 71 of the Act had been extinguished and the Tribunal had no jurisdiction and the worker’s avenue for relief is through the Supreme Court.

The decision

The Tribunal held it had jurisdiction to hear the matter because the worker’s claim for compensation was still alive. The question of entitlement to a lump sum under section 71 of the Act was still to be determined. Even if the quantum had been determined, it would still be possible for the worker to refer the question of his WPI back to the Tribunal if his work-related condition deteriorated, leading to an increase in his WPI.

Further, the Tribunal was satisfied that there had not been an agreement to settle the section 71 claim. According to the Tribunal, the email from the solicitors for the employer was an offer to resolve the worker’s claim for permanent impairment and there was no acceptance communicated by the worker or his solicitors prior to its withdrawal the following day.

The inquiry ‘if we are agreed?’ was inviting a response from the worker, where an affirmative answer would have meant the section 71 claim was settled and the conciliation conference could be cancelled.

In relation to the matter of estoppel, the Tribunal held that, although the employer’s email amounted to a clear representation as to an existing fact – that at the time of the email the employer’s instructions were to agree the worker’s WPI at 36% - the worker did not suffer ‘real detriment or harm’ as a result of her representation. The Tribunal was not convinced that the legal costs incurred by the worker in taking steps to dispense with the proceedings in response to the email were sufficient to constitute a real detriment or harm.

Implications for you

As we know, the traditional model of formation for a contract is offer and acceptance. Although it may be easy to forget in the day-to-day operations of workers compensation, the offer to resolve a claim, is the begging of the formation of a contract. We are, and should be, bound by the basic principles that govern the law of contracts.

This case demonstrates the importance of clear language. If the language used in a purported offer to settle or acceptance are ambiguous or leave open certain questions which would be crucial to the enforceability of an agreement, there will not be a binding agreement to settle.

We understand that it is not always easy to navigate the intricacies of the workers compensation jurisdiction and we encourage you to reach out if you have questions regarding offers to settle or acceptance of an offer.

C v Hitachi Construction Machinery (Australia) Pty Ltd [2023] TASCAT 68

Katherine Barclay
Miles Kahles

Ask us how we can help

Receive our latest news, insights and events
Barry Nilsson acknowledges the traditional owners of the land on which we conduct our business, and pays respect to their Elders past, present and emerging.
Liability limited by a scheme approved under Professional Standards Legislation