When inaction becomes acceptance: Medical Panel determinations & multiple respondents

29 September 2016

Respondents to personal injury claims involving multiple respondents in Victoria should be aware of the ramifications arising from the decision in Hart v Director of Housing & Hanover Welfare Services (Unreported, County Court of Victoria, Judge Morrish, 28 October 2013).1 The outcome in this case highlights the importance of referring a claimant to the medical panel in respect of the impairment thresholds under the Wrongs Act 1958 (Vic).

Facts

Ms Lorraine Hart (the Plaintiff) brought proceedings first against the Director of Housing (the Director) for personal injury. She served a Significant Injury Certificate and Prescribed Information From (Certification) and later joined Hanover Welfare Services (Hanover) as defendant.

The Director did not dispute the Certification. Hanover was then joined and served with Certification, which it disputed by referral for determination by the Medical Panel pursuant to Part VBA of the Wrongs Act 1958 (Vic) (the Act). In respect of Hanover Welfare Services’ referral, the Medical Panel determined on 17 May 2013 that the Plaintiff did not meet the Threshold (Determination).

The Court then considered whether the Plaintiff was entitled to recover damages for non-economic loss from the Director ; and whether the Director could rely on the Determination in favour of Hanover. The Court held in favour of the Plaintiff; finding that the Director was deemed to have accepted that the Plaintiff suffered a Significant Injury; and the Director could not rely on the Determination as it related only to the claim of the Plaintiff against Hanover and could not be used in any other claim against a different party – even a co-defendant in proceedings for the same injury.

Ramifications

How the outcome impacts upon contribution between respondents under the Act, particularly for non-apportionable personal injury claims, is debateable – with potentially serious implications.

While Hart makes it clear that a non-referring respondent cannot benefit from a Medical Panel determination in another respondent’s favour, it is not clear whether a respondent who has the benefit of a Medical Panel determination in its favour could nonetheless be liable in contribution to a respondent who did not make a referral.

If a party were entitled to rely on a favourable determination against a contribution claim for non-economic loss, there may be a serious risk for a respondent who takes the view that it has good prospects of either succeeding in a defence of no liability, or minimal liability taking into account contribution from another respondent. This may occur for example, where there is a contractual relationship between the respondent and another party who is in reality likely to be wholly liable.

However, given the outcome in Hart turned on the Court finding that a Medical Panel determination stands separately and only in respect of the claimant’s claim against a particular respondent, it could be that despite obtaining a favourable Medical Panel determination, a respondent may nonetheless be liable to a non-referring respondent for non-economic loss in contribution.

Put another way, it could be that a non-referring respondent may still pursue a referring respondent for contribution for non-economic loss notwithstanding a Medical Panel determination in favour of that respondent.

Take home message

Given the outcome in Hart, while the extent of the ramifications surrounding contribution are yet to be judicially considered, respondents who do not refer a claimant to the Medical Panel in respect of whether they meet the Threshold, or do not seek to join a referral where another respondent has done so, face a significant risk.

Should the Medical Panel determine that the claimant does not meet the Threshold in respect of one respondent’s referral, a respondent who has accepted or been deemed to accept that the Threshold is met could be severally (and effectively solely) liable to a Plaintiff for damages for non-economic loss where negligence is established against both respondents.

The outcome would appear to encourage referral to the Medical Panel even where the likelihood of any liability is thought to be slim. The outcome should also encourage co-respondents to cooperate and join in their referrals; given a Court may accept ‘inconsistent’ outcomes in respect of claims against different respondents. As a result, there is the potential that a respondent with a Medical Panel determination in their favour may still be liable in contribution to a co-respondent for non-economic loss; alongside a respondent who did not refer who will be primarily liable – both to a claimant who has been determined not to have a significant injury.

The outcome in Hart may be considered non-binding; and may strike some as being counterintuitive; contrary to the purposes of the relevant sections in the Act which seek to limit common law rights for non-economic loss; or as representing a triumph of legal fiction over substance.

That said, the finding can be understood as reflecting the operation of Part VBA of the Act which gives rise to legal fictions surrounding whether a claimant’s injury meets the Threshold – which are not rooted in fact and substance. These fictions may be thought to result in claimants resembling ‘Schrödinger’s Cat’ in that a claimant may simultaneously have suffered a significant injury at the same time as not having suffered a significant injury – except that for respondents, this paradox is not resolved even once the Medical Panel has assessed the claimant and let the cat out of the box.

However, there is after all a rationale to support such legal fictions in that it should not be overly onerous for claimants to recover damages for non-economic loss. A balance must be struck somewhere between this interest of claimants and that of respondents in not being exposed to high damages awards for injuries not meeting significant injury thresholds. It is certainly not the only instance of a legislative balancing exercise giving rise to the risk of unforeseen exposure and curious outcomes.

Accordingly for institutional health service providers and their insurers perhaps the key message is simply that where respondents take the risk not to refer a claimant to the Medical Panel where there is an uncertainty that the injury may not meet the relevant threshold, they do so at their peril, and potentially at the peril of their co-respondents.

This article was written by Philip Battye, Partner and Madeleine Whiteaker, Solicitor.


1(Unreported, County Court of Victoria, Judge Morrish, 28 October 2013).

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