Redemption and Schedule 2 payments recoverable under the WA Workers’ Compensation Scheme

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By Mark Civitella, Partner, Sarah Barnes, Legal Assistant and Emily McDougall, Legal Assistant

Murrell v Brosna Cpnstruction Pty Ltd (in liq) [2022] WADC 68

Mr Murrell was injured when formwork he was working on collapsed, causing him to fall 3.6m to the ground. Brosna Construction admitted negligence and contributory negligence was agreed at 5%. Trial proceeded only on the quantum of damages.

Bowden DCJ assessed damages in the sum of $540,963.79 and a question arose for costs purposes as to whether this was greater or less than an Order 24A Offer of Compromise that had been made by the Defendant before trial in the sum of $400,000 “exclusive of compensation”.

In order to determine this question, Bowen DCJ needed to consider the status of payments made by the workers’ compensation insurer by way of lump sum redemption of weekly payments and under Schedule 2 for a permanent impairment.

In this regard the plaintiff relied on Gosper v Christopherson [1986] HCA 28(1986) 160 CLR 423 where the High Court held that a lump sum redemption could only be paid if there was an agreement between the employer and the employees and a determination by the court. The court in Gosper held that even if there was a determination by the court of the amount of the redemption, an employer was not obliged to make a lump sum payment by way of redemption as the actual making of the payment was at the option of the employer. As there was no liability on an employer to redeem either future medical expenses or weekly payments any redemption amounts could not be considered “workers’ compensation payments” within the scheme of the Workers’ Compensation Act 1926 (NSW).

Bowden DCJ found that the Order 24A offer exceeded the judgment sum and therefore the Defendant was entitled to its costs of the proceedings from the date of the offer being made.

Bowden DCJ did not apply the decision in Gosper, noting that the WA and NSW schemes are fundamentally different. In WA, if an order is made or a memorandum of agreement is registered for a redemption, there does become a liability on the employer to pay the redemption amount (section 67(7)). His Honour held that the words ‘lump sum compensation’ within section 92 of the Workers’ Compensation & Injury Management Act 1981 includes any monies paid by way of redemption or pursuant to Schedule 2, and these amounts are included in the first charge on the judgment which is payable to the employer that paid the compensation.

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