The complexities of s65A of the Workers Compensation Act 1987 (‘WCA’)
By Danny Khoshaba, Partner and Jordan Mitchell, Senior Associate
On 8 December 2015, Mr Haddad sustained injuries to the right hand together with psychological injuries when on a building site; his hand became jammed in a pallet. Mr Haddad suffered a traumatic amputation of the distal part of the right middle finger.
On 23 July 2019, an Approved Medical Specialist (‘AMS’) assessed Whole Person Impairment (‘WPI’) in respect of the physical injuries at 9%.
Mr Haddad also brought a claim for lump sum compensation pursuant to section 66 of the WCA in respect of primary psychological injury. Mr Haddad relied upon a medico-legal report of Dr Ben Teoh, psychiatrist dated 25 August 2018 who assessed his WPI at 15%.
The respondent employer obtained an IME report from Dr Robert Wotton, psychiatrist in response to the claim. Dr Wotton similarly assessed Mr Haddad’s WPI at 15%. Having been directed to section 65A of the WCA and requested to apportion the extent (if any) of impairment which relates to secondary psychological injury, Dr Wotton noted that:
“The impairment that Mr Haddad has suffered is in the main from his primary injury. There have been secondary consequences arising from facing an uncertain future which are also of a depressing nature.
I am unable to be precise in these matters. I would think that the greater proportion (say 90%) of the impairment results from the primary injury”
In a supplementary report, Dr Wotton confirmed his view that there was 14% WPI resulting from primary psychological injury after the apportionment exercise.
The parties agreed to a referral to an AMS for an assessment of WPI resulting from primary psychological injury. The referral to an AMS invited the AMS to refer to consent orders dated 12 September 2019 included the following notation:
“The following is not a determination of the Commission, however, I note that the parties have agreed:
- The AMS is to have regard to the provisions of section 65A of the 1987 Act.
- The existence of a secondary psychological injury is not accepted or conceded by the applicant.”
Associate Professor Michael Robertson (‘the AMS’) issued a Medical Assessment Certificate (’MAC’) in which he found there to be 15% WPI.
The respondent employer appealed the MAC submitting that the AMS erred by failing to apply the ‘two step process’ as set out by Harrison J at  in Mercy Connect Limited v Kiely (2018) NSWSC 1421 (‘Kiely’). That process requires the AMS to:
- Apply the PIRS table to assess total WPI;
- Then, to assess the secondary psychological injury and deduct the impairment in accordance with s 65A leaving the primary psychological injury remaining.
The respondent employer further submitted that, accepting that some regard might have been given by the AMS to the implications of s65A, the description of the categories within the PIRS Table of the MAC demonstrated that the AMS had included secondary psychiatric injury as part of his assessment of WPI. As an example, the inclusion of a reference under the “travel” category to anxiety on public transport out of concern that his injured hand might be the subject of excessive scrutiny was said to be an indication that the AMS had failed to make the necessary apportionment.
The respondent employer requested that Mr Haddad be re-examined.
Mr Haddad’s Position
In response, inter alia, Mr Haddad sought to distinguish the decision in Kiely to the current facts. The first point of distinction was said to be that the Consent Orders which caused the referral to be made in Kiely contained an admission by the worker that he suffered from a secondary psychological condition, Mr Haddad submitted that no such concession was made in the present case.
The second distinguishing factor in Mr Haddad’s submission was said to be that the passage relied upon by the appellant employer as to the method to be applied where an AMS had to apply s 65A of the 1987 Act was obiter dicta and therefore instructive, but not a decision in law and binding on the AMS.
Medical Appeal Panel (‘MAP’) Decision – Jurisdiction
On 9 January 2020, the MAP referred to the notations in the consent orders and s321A (2) if the Work Injury Management and Workers Compensation Act 1998 (‘WIM Act’) and directed the parties to make submissions addressing the question of jurisdiction.
The parties responded submitting that no jurisdictional issues arose and that section 321A of the WIM Act had no application. The parties agreed that the issue for assessment was the extent of permanent impairment for the primary psychological injury, liability for which had been accepted.
Despite the position taken by the parties, the MAP held that with the repeal of section 321 of the WIM Act and there being no regulations to trigger the commencement of section 321A which was introduced by Schedule 2.2  of the Workers Compensation Legislative Amendment Act 2018, there was a ‘resulting lacuna in the legislative policy’. The MAP found that there was produced a legal vacuum, through which matters could pass to an AMS regardless of whether jurisdiction existed or not.
The MAP disagreed with the parties submissions that there was no liability dispute, stating that there is clear authority that issues arising pursuant to section 65A are indeed issues pertaining to liability citing the decision of Campbell J in State of NSW (Department of Education) v Kaur  NSWSC 346 (Kaur) and that the resolution of that issue must be determined by the Commission.
The MAP determined that it is for the Commission to determine whether a psychological injury has arisen as a consequence of, or secondary to, a physical injury, by applying the terms of the definition of a secondary psychological injury in compliance with s 65A(5). The AMS in the MAP’s view, therefore did not have jurisdiction to assess the matters referred to him. Accordingly, it found that the matter must be referred back to the Registrar to be dealt with according to law.
Medical Appeal Panel (‘MAP’) Decision – Method Adopted by AMS
The MAP noted that in case it is incorrect in its conclusion regarding jurisdiction, that the method to which the AMS assessed impairment pursuant to section 65A was incorrect and found that the MAC must be revoked in any event.
In coming to this conclusion, the MAP found that:
- It concurred with Mr Haddad’s distinction between the case and Kiely that secondary psychological injury was denied, however noted that this was not relevant as an issue that has any bearing on whether the method described by Harrison J at [95-97] is applicable.
- Whether Harrison J’s commentary is found to be obiter dicta or ratio decidendi, it cannot be ignored by an inferior jurisdiction, is very strong and persuasive and is not to be ignored without good reason.
- The Medical Appeal Panel decision in the matter of Secretary, Department of Industry v Lucia Nesci (2019) NSW WCC MA 172 (Nesci) was incorrect and it declined to follow the decision in that matter.
The Appeal Panel in Nesci found held that Harrison J’s comments were obiter and not binding, as the method she described was “one method that an AMS might adopt” to comply with s 65A. The MAP noted that the approach of the Appeal Panel in Nesci ignores the provisions of s 65A(1), which states unequivocally that “no compensation is payable” for impairment arising from a secondary psychological injury.
The MAP stated that although the AMS in this case acknowledged that he sought to distinguish between the effects of primary and secondary injuries in the PIRS Table, he gave no indication of how he proposed to do so.
The MAP agreed with the respondent employer’s argument that the inclusion of Mr Haddad’s anxiety when travelling in public for fear of excessive scrutiny of his injury might be a secondary injury noting that within the statutory definition, that anxiety would seem to be a secondary, or consequential to the physical injury. Similarly Mr Haddad’s fear that he might drop things is a consequence of and secondary to the physical injury. Moreover, Mr Haddad’s moving away from his family because he thought he was toxic to people could also be seen as a symptom of a secondary psychological injury. Further, his forgetfulness and loss of focus might also be seen as secondary to the physical injury.
The MAP found that the mere acknowledgement by the AMS of his task without any explanation of how that task was performed is inadequate and that when the AMS said that he had taken account of the effects of the primary and secondary psychological injuries, he gave no adequate indication of how he had done so.
For those reasons, the MAP determined that the matter be remitted to the Registrar to be dealt with according to law.
Implications of Decision
The MAP decision raises a number of interesting considerations when dealing with section 65A of the WCA.
Most significantly, the decision suggests that:
- In circumstances where a claim for permanent impairment resulting from primary psychological injury is brought arising out of an incident which also involved physical injuries, the Commission must make a determination of whether or not a secondary psychological injury has also been sustained by the worker prior to any referral to an AMS, irrespective of whether secondary psychological injury has been pleaded or not.
- The decision in Nesci is wrong and that AMS’ are bound to adopt the ‘two step process’ as set out by Harrison J in Kiely to ensure compliance with section 65A.
The decision re-shapes the way that insurers should approach permanent impairment claims resulting from psychological injury where there appears to be some interplay between secondary and primary psychological symptoms.
In those situations, consideration should be given to forensic experts being directed to comply with the two-step process as set out in Kiely.
Legal representatives must also ensure that in the event that there is evidence of a secondary psychological injury contributing to the psychological impairment, that this be put to an Arbitrator for determination or at least raised as an issue by the respondent in a section 78 notice.
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