By Matthew Skelly, Special Counsel and Michael Down, Partner

Facts

On 9 February 2018, the plaintiff went to work.  In the course of carrying out a task of repairing a bucket with a cutting edge, the plaintiff was required to remove the bucket from forklift tines.  Without assistance or direction from the relevant parties, as he attempted to remove it, the bucket suddenly detached causing injury.

The plaintiff brought proceedings, and was successful, against the respective insurers of his employer (a labour hire company) and his host employer, both deregistered.

The plaintiff was awarded, at first instance, $236,319.74, which included $184,947.00 for past treatment expenses.

This case is not interesting by reason of the findings at first instance, but the analysis by Acting Justice Elkaim of the application of section 151Z of the Workers Compensation Act 1984, in reducing the plaintiff’s damages when he was successful against his employer.

This issue has caused considerable confusion in the profession and was last considered by the NSW Court of Appeal in Synergy Scaffolding Pty Ltd v Alelaimat (No 2) [2024] NSWCA 11.

The common law defendant claimed damages should be reduced by $184,947.00 as a result of past treatment expenses having been paid by the Workers Compensation Insurer, and not the plaintiff, and were unrecoverable.

Findings

Elkaim AJ deviated from the profession’s understanding of the law as discussed in Alelaimat.  Specifically, Elkaim AJ accepted the damages should be reduced, by virtue of the past treatment expenses having not been a loss suffered by the plaintiff, and were an unrecoverable loss suffered by the Workers Compensation Insurer.

In his reasoning, on our reading, Elkaim AJ appears to have accepted, the right of the Workers Competition Insurer to reduce damages recoverable from it by the extent of the statutory compensation already paid (s151A), provided a right of offset against wage benefits paid alone. Otherwise, without a crystalised obligation for the plaintiff to repay medical expenses paid by an insurer, there was a risk of double compensation, and those damages ought to be deducted.

Generally, it seems the Court accepted s151A only contemplated the discounting of wage benefits from common law damages.

Key Takeaways

The key take away from this case is further discussion of the principles considered by the NSW Court of Appeal in Alelaimat raising the possibility of discounts in damages for double compensation.

The reasoning is not clear as to the specific value of wage benefits paid to the plaintiff.

In our view, the judgment is an indicator that the Courts could, in the future, agree that in circumstances where the modified common law damages (loss of income only [s151G]) did not exceed the wage benefits paid by the Workers Compensation Insurer, s151A would not contemplate a set off beyond wage benefits paid.

In circumstances where the common law damages payable by the Workers Compensation Insurer do not exhaust the wage benefits paid, then the plaintiff is not liable to repay the past medical benefits paid under the Workers Compensation Scheme.

It is confirmed that should the employer (or its insurer) be sued, and found liable, s151Z(2)(e) extinguishes the Workers Compensation Insurer’s right to access the common law damages payable by a third party.

When both conditions are applied, the plaintiff’s right to damages for past medical treatment paid for by the Workers Compensation Insurer, is extinguished, and damages recoverable by the plaintiff are to be reduced by the value of the medical expenses paid under the Workers Compensation Act 1987.