For years now, it has been accepted orthodoxy in the ‘Comcare sphere’ that, once liability for an injury has been accepted under section 14 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act), that liability cannot cease. Accordingly, after initially accepting liability under section 14, decision-makers then only consider whether liability for certain heads of compensation – for example, for incapacity (section 19) or medical expenses (section 16) – exists from time to time. Section 14 is only revisited if liability is going to be revoked entirely on the basis that it should not have been accepted in the first place (a so-called Hannaford decision).
When claims managers form the view that an injury has resolved or, in the case of disease claims, when employment is no longer a significant contributing factor, they make a ‘no present liability’ (NPL) decision. NPL decisions are made in respect of the various compensation heads (leaving section 14 liability alone).
The Full Federal Court’s decision in Woodhouse v Comcare [2021] FCAFC 95 considered an NPL decision and it suggests that, for certain disease claims, the reason why liability under the various heads of compensation ceases is because liability under section 14 ceases. It is worth considering how the Woodhouse decision might change the claims management status quo, if at all.
Background to the claim
Ms Woodhouse had been First Violinist for the Queensland Orchestra. She alleged that she had been bullied during the selection process for the orchestra, and that she had experienced further hostility as a result of obtaining the prestigious First Violinist position. Ms Woodhouse experienced a severe panic attack during the course of a performance of the orchestra, following which her mental health deteriorated. Despite treatment, she was unable to return to work in any capacity.
In 2004, Comcare accepted liability under section 14 of the SRC Act for Ms Woodhouse’s psychological condition, described as an aggravation of a pre-existing Major Depressive Disorder and pre-existing anxiety. In late 2017, Comcare determined that it had ‘no present liability’ to pay compensation under sections 16 and 19 of the SRC Act on the basis that Ms Woodhouse’s condition at that time was due to her pre-existing conditions and that employment was no longer a material contributing factor. Ms Woodhouse appealed the decision and the Administrative Appeals Tribunal (Tribunal) affirmed Comcare’s decision in July 2020. Relevantly, the Tribunal found that the employment factors which had initially contributed the to the accepted condition had been ‘crowded out’ by non-employment factors such that Ms Woodhouse’s condition could no longer be said to be contributed to a material degree by her employment.
Ms Woodhouse appealed the decision and, relevantly for present purposes, her argument was that the Tribunal had failed to properly apply the definition of ‘disease’ in the SRC Act. She argued that there was nothing in section 14 or in the definition of ‘disease’ that required an employee’s employment to continue to contribute to their condition. As the Court said, ‘the applicant submits that if, on any occasion, the commencement or onset of the ailment or aggravation was materially contributed to by the employee’s employment, it remains for all time thereafter compensable pursuant to section 14, even if other factors take over as the cause of its continuance.‘ [61]
Continuing liability?
The Court was not convinced by the argument and, in its reasoning process, gave a clear description of what happens when employment is no longer a contributing factor (either material or significant, depending on the date of injury) to an employee’s condition.
The Court said that ‘it must be kept in mind that s14 operates to impose liability on Comcare where and for as long as certain conditions exist. However, s14 only provides the core or central touchstone of liability and other sections regulate the extent and manner in which such compensation is provided.‘ [84] The Court said ‘it does not follow that, in order for Comcare to remain liable, the employee’s employment needs to remain a constant and continuing contributor to the ongoing injury … what is required is that the contribution requirement remain in place in the sense that the disease or ailment continues to have the characteristic of having been contributed to in a material degree by the relevant employment. To say that the employment factors continue to contribute in a material way to the employee’s condition is an inarticulate way to express this. It is preferable to say that the causal nexus between the employee’s employment and suffering of the disease continues unbroken.‘ [85]
What is significant is that the Court explained that, if an ailment has ceased to be contributed to in the necessary degree by employment, it will cease to be a ‘disease’ and will ‘therefore cease to be an “injury” in respect of which compensation is payable pursuant to section 14 of the SRC Act.‘ [85]
Conclusion
The Court ultimately found that the appeal point was not made out and that it was open to the Tribunal to find that Ms Woodhouse’s condition was no longer contributed to by employment. It clarified, however, that the reason that compensation was not payable under sections 16 and 19 was because liability under section 14 had ceased.
The decision makes clear that, in disease claims (which require consideration of employment contribution), it is possible to make NPL decisions on the basis that liability under section 14 has ceased – being that the ‘causal nexus’ between the ailment and employment has been broken. Claims managers might now need to ‘tweak’ some NPL decisions so that they refer to section 14. Claims managers might also consider tightening up briefing letters to experts to focus on whether there is a break in the causal nexus between employment events and the employee’s present condition.
If it can now be said that liability under section 14 can cease in certain circumstances, it remains to be seen whether there will be any longer-term practical implications of making NPL decisions under section 14 – for example, whether ‘cease liability’ decisions can now be made and claims closed once and for all.
This article was written by Andrew Allan, Partner.
