Early Intervention – The New Paradigm in CTP Claims

Presented by Roberto Clemente, Partner

Introduction

In an ideal world early intervention in CTP claims is optimum to health outcomes. Early intervention as a concept has

gathered momentum in the CTP arena since the introduction of privatisation on 1 July 2016. From that date four well

known insurers commenced provision of CTP Insurance in South Australia, namely AAMI, Allianz, QBE and SGIC.

Advocates for early intervention from the insurance side of the fence would perhaps suggest that early intervention is

stifled where claimants are legally represented due to a variety of factors including:

Lawyers impacting upon the ability of insurers to properly manage injuries;

Lawyers not encouraging recovery from injury and fostering over servicing;

Lawyers focusing on adversarial strategies rather than injury management.

The reality is that the vast majority of plaintiff representatives seek to recover reasonable compensation for their clients at

the earliest opportunity. Representation is now more important than it has ever been for claimants given the complexities

of the current Scheme including the need for familiarity with:

Notice requirements under Section 126A of the Motor Vehicles Act 1959 (SA) (including the submission of an Injury

Claim Form);

The Regulations to the Civil Liability Act 1936 (SA) (including the Schedule 1 Injury Scale);

AMA 5 (which is now a key component towards arriving at an appropriate ISV).

The Adversarial System

The reality is that neither insurers nor lawyers are best placed to facilitate optimum health outcomes for claimants. This is best left to

medical and allied health professionals.

Lawyers and insurers are in the business of litigation. For lawyers, the best outcome is achieving the highest possible damages

assessment for a client and for an insurer the best outcome would be to achieve settlements in as many claims as possible, based

upon an ISV of 7 or less (assuming a potential claim for future loss of earning capacity).

The objectives of lawyers and insurers are not congruent with those of early intervention.

Unfortunately, in the last 21 months I have seen many poor health outcomes in the early stages of claims for various claimants. In my

observation, this has been as a result of an overzealous and heavy handed approach by insurers, which often has no resemblance to a

proper early intervention approach.

Most of my days as a plaintiff lawyer are now heavily consumed dealing with issues arising from insurers failing to agree to attend to

payment of reasonable treatment expenses on an interim and without prejudice basis or failing to agree to a reasonable request for

an interim payment. In the alternative, approvals are often taking a long period of time, causing claimants considerable stress. Further

compounding this problem are frequent requests from insurers for records and reports, which are often not directly relevant to the

matters in issue, to approve simple forms of treatment (including physiotherapy, consultation with a spinal surgeon, radiological

investigations, etc.).

The Adversarial System - continued

As a plaintiff lawyer my ability to obtain agreement for payment of medical expenses and interim payments is being impacted upon

by the daily bombardment of communications received from insurers (by telephone, letter and email) along the following lines:

Failure to satisfy the notice requirements for a claim where a medical certificate has not been obtained pursuant to Section

126A (2) (c) (ii) of the Motor Vehicles Act 1959 (SA), sometimes in cases involving serious injury where the injured claimant was

hospitalised for a period of weeks;

Requests for pre-accident medical records where a simple request is made for approval for treatment with a specialist spinal

surgeon (where there is no basis on the evidence for a causation issue to be raised);

Arranging of independent medical examinations in response to a request for funding of treatment such as participation in a

pain clinic (where the medico-legal report will often cost more than the course of treatment);

Frequent requests for general updates in circumstances where it is not cost effective for the lawyer to provide such general

updates (given there is no certainty that the thresholds for non-economic loss and future economic loss will be met);

Arranging of Activities of Daily Living Assessments in response to a claimant seeking reimbursement for a handful of cleaning

and gardening expenses (with the cost of the assessment far exceeding the cost of the expenses being claimed).

Due to time constraints, the above is not an exhaustive list of difficulties that plaintiff lawyers confront on a daily basis in attempting

to secure interim benefits for their clients.

The Adversarial System - continued

There is presently an unhealthy focus by insurers upon pre-accident medical records and independent medical examinations as providing

the necessary evidence for what is reasonably required by a claimant. Often several months will pass whilst this evidence is being gathered

before answers are provided to reasonable requests. This leads to delay in stability of injuries, the ability for an ISV assessment to be

conducted and for final damages to be assessed.

Many claimants have a very good treatment team in place (including general practitioners, physiotherapists, orthopaedic surgeons and

psychiatrists). Often, the opinions of these treating experts are ignored and non-directly relevant records are requested and independent

medical examinations are arranged, before consideration is given to approving treatment. Often it appears to me that the insurer is doing

nothing more than buying time. This approach often leads to stress, anxiety and importantly a delay in the progress of a claimant towards

stability.

I raise the above out of concern for the unnecessary costs been generated, both in terms of excessive communications and costly expert

reports being generated, where often the exposure of the insurer would be the same or less by simply approving reasonable treatment

(supported by the claimant’s medical and allied health treatment providers).

It should not be overlooked that when an insurer approves funding for treatment it is generally on an interim and without prejudice basis,

and if a genuine issue relating to causation later becomes apparent, the insurer could seek a credit in relation to payment of non-accident

related treatment expenses.

Case Example 1

Male claimant aged in his late 30’s.

Employed as a Full Time Panel Beater at the time of the accident.

As a result of a rear end accident he has sustained injuries including at the C6 level of the cervical

spine.

The claimant suffers a knife like feeling between the shoulder blades, tingling involving the left thumb

and index finger and pain at the back of the head.

The claimant was referred to a neurosurgeon and funding for this was not agreed to by the insurer and

treatment could not proceed as the claimant could not afford the private consultation.

The claimant has been totally incapacitated from employment since the collision in May 2017.

The claim is now very much at a stalemate due to the insurer’s refusal to fund treatment with the

neurosurgeon.

The insurer has instead offered to fund an exercise programme, in circumstances where such

treatment would appear to be totally inappropriate and inconsistent with the recommendations of his

treating doctors.

Case Example 2

This case involves a male claimant aged 45 who was involved in an accident in July 2016.

He has sustained multiple injuries including an L5/S1 annular tear, L4/5 lateral disc protrusion and a cervical spine

injury.

His general pre-accident health was excellent.

Prior to the accident he had worked with a metal fabrication company for more than 20 years. His pre-accident

employment role was as a team leader and his duties involved lifting, cleaning metal, stacking and forklift driving.

As a result of his injuries he has not been able to return to work due to the fact that his pre-injury employer will not

accept him back at work unless he can perform full and unrestricted duties, which is not possible with his physical

restrictions.

It is likely that his pre-accident employment will shortly be terminated due to the longevity of the period of

incapacity.

The claimant has recently been referred to a specialist for the purpose of rhizolysis and funding for this treatment has

been refused by the insurer.

Furthermore, the insurer has also recently refused a request for an interim payment, despite the claimant not having

worked for his pre-accident employer since December 2016.

The difficulty this claimant faces is that his claim cannot progress until his injuries are stabilised (after the completion

of his treatment) and his work capacity is unlikely to improve without further treatment.

The insurer is refusing to fund further treatment and an interim payment as they are of the view there is insufficient

medical evidence to confirm that the claimant’s injuries and ongoing incapacity for work relate to the subject

accident (despite there being a significant body of evidence suggesting otherwise).

Case Example 3

Female claimant aged in her early 70’s at the time of accident in July 2017.

Struck down by a vehicle whilst travelling on foot in the carpark of a Shopping Centre.

The claimant was hospitalised in Royal Adelaide Hospital for 10 days.

She was subsequently hospitalised in Hampstead Rehabilitation Centre for approximately 4 weeks.

Her injuries included fracture of the proximal portion of the left tibia and distal portion of the left fibula,

fracture to the left ankle, irritation of the right leg sciatic nerve, bruising to the left side of the face and

general anxiety.

In response to a request for funding of the cost of a ramp at the front and rear of the claimant’s home, the

insurer requested the claimant’s pre-accident medical records (which bear no resemblance whatsoever to

the serious injuries she sustained in the collision and the need for the ramp).

The above ramp was installed by the claimant’s local council who generously partially subsidised the

purchase of the ramp. Instead of promptly paying the balance for the ramp, the insurer arranged an ADL

assessment and requested the pre-accident records (in circumstances where the surrounding evidence

clearly points to the claimant’s severe injuries creating the need for the ramp).

Case Example 4

A female claimant in her mid-20’s was involved in an accident in February 2017.

Several months before the accident she had undergone a microdiscectomy to the lumbar spine with

a successful outcome.

She had been employed as a part- time Service Support Officer in the public sector.

At the time the accident intervened she had been cleared to work 25 hours per week and was about

to return to social netball.

As a result of her involvement in the collision she sustained multiple injuries including a worsening of

her lumbar spine condition, to the point where she now requires a spinal fusion.

She has largely been totally incapacitated since the collision and has suffered significant financial

loss.

The insurer has been extremely resistant in relation to requests for interim payments, insisting upon

an enormous amount of documentary evidence for the claimant to demonstrate financial hardship.

The insurer has only agreed to two very small interim payments (much less that 80% of her

Economic Loss to date), despite the insurer being aware that at one point after the collision the

claimant was evicted from her home and was sleeping in the back of a shop premises, such was her

financial hardship.

The insurer in presently insisting upon an ADL assessment to approve ongoing domestic assistance

even though the treating spinal surgeon has recommended a spinal fusion and ongoing domestic

support.

Dispute Resolution – CTP Regulator Rules

When difficulties arise relating to funding concerning treatment expenses and interim payments, it is often difficult to progress a claim

towards formulation and final assessment of damages. Can any assistance be gained by enforcement of the CTP Regulator Rules in these

circumstances?

One of the functions of the CTP Regulator as set out in Section 5 of the Compulsory Third Party Insurance Regulation Act 2016 (SA) is to make

rules relating to a number of areas including:

1. Management of claims;

2. Dispute resolution.

The CTP Regulator Rules themselves set out various obligations on the part of insurers as well as processes to be followed for dispute

resolution.

The obligations of an insurer are set out at Rule 3 and include:

1. Dealing as expeditiously as possible with claims.

2. Ensuring its processes for dealing with claims are efficient, cost effective and in accordance with the law.

3. Encourage early and appropriate treatment and rehabilitation for people who suffer injuries.

4. Maintain service standards and business practices consistent to all customers.

Dispute Resolution – CTP Regulator Rules - continued

Rule 3.5 sets out service levels required by insurers, which include:

1. Providing assistance to claimants to ensure they are able to comply with claim lodgement requirements.

2. Focus on the early assessment of claims.

3. Make fair and reasonable assessments of claims in accordance with the law.

4. Have a sound and clear process to deal with complaints.

Rule 13 deals with disputed claims and provides for:

1. Internal dispute resolution.

2. Conciliation.

IDR Processes

Rule 13.1.1 provides that: -

“If a claimant disagrees with a determination made by an approved insurer in relation to a claim, the claimant may ask to have that

decision referred to the approved insurer’s IDR process”.

Rule 13.1.2 requires the IDR process to comply with standards and requirements made or approved by ASIC.

It is noted that the word determination is not defined in the definition section contained in the Rules.

Claim is defined as a claim for loss or damage:

A. Under, asserted to be under, or capable of being validly made under, a policy of insurance provided under part 4 of the Motor

Vehicles Act 1959 (SA); or

B. A Nominal Defendant claim.

Conciliation

Rule 13.2 provides for conciliation, and Rule 13.2.1 provides:

“ if a claimant disagrees with a determination by an approved insurer, and the claimant requests the approved insurer conciliate the

dispute, the approved insurer must agree to conciliate the dispute with a conciliator if the claimant’s request to conciliate the dispute is

made within 30 days of the date of the relevant determination”.

The term conciliator means a person approved by the Regulator to be a conciliator or if the Regulator has not approved a person or if that

person is unavailable, any other person suitably qualified to be a conciliator.

Rule 13.2.3 provides that the insurer must consider any directions given by the conciliator, obviously meaning that the conciliator’s directions are

not binding.

Interestingly, Rule 13.2.5 provides that a claimant who attends a Conciliation Conference is entitled to seek reimbursement from an approved

insurer for:

• Reasonable expenses of the claimant’s transport to and from the conciliation up to a maximum of $50.00;

• Loss of income incurred by the claimant as a result of attending the conciliation up to a maximum of $350.00.

Declaratory Judgments and Interim Assessments of Damages

Further, or in the alternative, to the provisions contained in Rule 13 of the CTP Regulator Rules, a claimant potentially has a right to seek

interim relief as follows:

• Declaratory judgment determining the question of liability;

• An order for payment of expenses to date of such declaratory judgment for a payment on account of damages and for periodic payments

thereafter on account of damages to be assessed and for an adjournment of the final assessment of damages.

Section 30B of the Supreme Court Act 1935 (SA) gives the court power to make interim assessment of damages.

Section 38 of the District Court Act 1991 (SA) provides for interim awards of damages in that court.

The possibility of pursuing an interim assessment of damages is raised simply as a discussion point, noting that such applications have

traditionally been pursued in relation to the claims of children with catastrophic injuries.

Direct Contact with Claimants

Another difficulty which has arisen since privatisation, is the increasing occurrence of direct contact with claimants who are legally represented.

Such direct contact often causes difficulty in a solicitor’s ability to manage litigation, where the solicitor is not privy to communications which are

occurring between the insurer and the claimant.

Rule 5.6 sets out the parameters for direct contact between the insurer and the claimant (where the claimant is legally represented).

Rule 5.6.2 provides:-

“The approved insurer may send correspondence directly to a claimant who is legally represented if:

a) It contains only generic information about making and resolving claims;

b) It provides details about AHP examination or other medical examination arranged by the approved insurer; or

c) It is in regards to a claimant’s rehabilitation;

Provided that a copy is also sent to the claimant’s solicitor”.

The above Rule clearly only refers to correspondence, which infers only written communication is permitted.

Direct Contact with Claimants - continued

I have noted instances where occupational therapists engaged by approved insurers have contacted my clients direct after an Activities of Daily

Living Assessment has taken place in order to monitor the progress of their symptoms and treatment (without reference to myself).

Furthermore, Rule 5.6.3 provides:-

“An approved insurer may contact a claimant who is legally represented directly if:

a) Requested to do so by the claimant;

b) There is no substantive reply from the claimant’s solicitor to the approved insurer’s offer of settlement within 10 days and attempt has been

made by the approved insurer to confirm receipt of the offer of settlement;

c) There is no substantive reply from the claimant’s solicitor to the approved insurer’s correspondence (excluding offers of settlement) within

20 days, and an attempt has been made by the approved insurer to confirm receipt of the correspondence; and

d) In response to a complaint by the claimant.”

The above time limits, in my view, can place an unfair obligation on solicitors acting for claimants to respond to trivial requests from insurers to

provide wide ranging updates regarding the status of a claim as failure to do so may result in the client being contacted directly.

Conclusion

Whilst the objective of early intervention is to bring about optimum health outcomes, the experience to date with the privatised scheme

suggest that in many instances early intervention objectives are not being met due to various factors which are common in an adversarial

setting including:

1. Liability disputes;

2. Causation disputes;

3. Over emphasis upon the obtaining of pre-accident medical records, which in some cases are not directly relevant.

As a result of the above, resolution of claims is being delayed, legal costs are rising and simple claims are being made more complex than

they need to be. Perhaps the focus upon early intervention as a model has led to unsatisfactory results and some modification is required.