RETROSPECTIVE EFFECT OF THE ‘NEW’ WRONGS ACT THRESHOLDS

Legal Directions

Gary Mitchell v Latrobe Regional Hospital [2016] VSCA 342

Introduction

Mr Gary Mitchell (‘Applicant’), issued County Court proceedings against Latrobe Regional Hospital (‘Respondent’), alleging that he suffered injury as a result of negligent treatment while a patient with the Respondent and claimed damages for non-economic loss and medical and like expenses.

In June 2015, the Applicant served the Respondent with a certificate of assessment in accordance with Part VBA of the Wrongs Act 1958 (Vic) (‘Wrongs Act’), which stated that the Applicant’s degree of impairment resulting from psychiatric injury would be more than 10 per cent once stabilised. In July 2015, the Respondent referred the ‘medical question’ to the Convenor of Medical Panels for determination by a medical panel, in accordance with s.28LWE of the Wrongs Act. The medical panel examined the Applicant in September 2015.

On 19 October 2015, the medical panel issued a certificate of determination to the effect that the Applicant’s psychiatric injury ‘does not satisfy the threshold level’, which according to the Wrongs Act meant that it was ‘not more than 10 per cent’.

On 19 November 2015, amendments to the Wrongs Act came into force altering, among other things, the threshold for psychiatric injury from ‘more than 10 per cent’ to ‘10 per cent or more’.

On 22 December 2015, the Applicant served on the Respondent a further certificate of assessment, which certified that the Applicant’s degree of impairment resulting from psychiatric injury was more than 10 per cent. Her Honour Judge Tsalamandris (of the County Court) heard an application to challenge the Respondent’s entitlement to non-economic loss damages based on the medical panel’s previous certificate and reserved the following question for the Court of Appeal:

… is the plaintiff’s claim for damages for non-economic loss precluded as a consequence of the Certificate of Determination of the medical panel dated
19 October 2015?

The Court of Appeal, consisting of Osborn and Beach JJA and Forrest AJA, ultimately answered in the negative. The Court held that the clear intention of amendments to the Wrongs Act was that the ‘new’ threshold applies to proceedings for the recovery of non-economic loss issued before the amendments came into force, but which have not been finally settled or determined.

Background

Part VBA of the Wrongs Act was introduced in 2003 as part of extensive and far-reaching tort reforms adopted by the Victorian Parliament. The operative section is 28LE, which provides that a person is not entitled to recover damages for non-economic loss in any proceeding in a court in respect of any injury caused by the fault of another, unless the person has suffered a ‘significant injury’.

In respect to psychiatric injury, according to Part VBA of the Wrongs Act, ‘significant injury’ is defined with reference to the ‘threshold level’ (sections 28LB and 28LE), which assessment is underpinned by the application of the AMA Guides or other prescribed methods (s.28LH).

In a practical sense, Part VBA of the Wrongs Act requires the claimant (here, the Applicant) to obtain from a medical practitioner and serve on the respondent (here, the Respondent), a certificate stating whether the degree of impairment resulting from the injury satisfies the ‘threshold level’, but it must not state the specific degree of impairment. If a respondent does not refer the assessment to the medical panel within 60 days of being served with the certificate, it is deemed to have accepted it.

The procedure for the medical panel once a referral by a respondent has been effected is set out under division 5 of Part VBA of the Wrongs Act. Section 28LHZ deals with the effect of the medical panel’s determination as follows:

(1) A determination by the Medical Panel under this Division that the degree of impairment resulting from an injury satisfies the threshold level must be accepted by a court in any proceeding on the claim as a determination of significant injury for the purposes of this Part.

(2) A determination by the Medical Panel under this Division that the degree of impairment resulting from an injury does not satisfy the threshold level must be accepted by a court in any proceeding on the claim as a determination that the injury is not significant injury for the purposes of this Part.

Division 6 of Part VBA of the Wrongs Act requires the claimant to file with the court ‘before the determination of the claim’ a certificate of assessment upon which the claimant proposes to rely, as well as any certificate prepared by the medical panel
(if applicable).

Prior to November 2015, the Wrongs Act prescribed that the ‘threshold level’ for psychiatric injuries was ‘more than 10 per cent’. However, on 19 November 2015, amendments to the Wrongs Act commenced, altering the definition of ‘threshold level’ for psychiatric injury from ‘more than 10 per cent’ to ‘10 per cent or more’ (section 11 of the Wrongs Amendment Act 2015 (Vic) (Wrongs Amendment Act); the definition was also expanded to include in the case of ‘spinal injury’, impairment ‘of 5 per cent
or more’).

Of significance to the Court of Appeal decision were the transitional provisions accompanying the above amendments (see s.28LZS of the Wrongs Act), the relevant parts being:

(1) The definition of threshold level in section 28LB, as amended by section 11 of the Wrongs Amendment Act 2015, applies in respect of an injury suffered by a person, and in relation to which a claim for the recovery of damages for non-economic loss to which this Part applies may be made, irrespective of when the act or omission causing the injury and giving rise to the claim for the recovery of damages occurred.

(2) Without limiting subsection (1), the definition of threshold level in section 28LB, as amended by section 11 of the Wrongs Amendment Act 2015, applies in respect of an injury suffered by a person and in relation to which a proceeding for a claim for the recovery of damages for non-economic loss to which this Part applies has been commenced before the commencement of section 11 of that Act but has not been finally settled or determined before the commencement of that section.

Decision

Counsel for the Applicant argued that the medical panel’s certificate only had force pursuant to the pre-amendment provisions of Part VBA of the Wrongs Act and that the terms of the transitional provisions made it clear that the ‘new’ threshold applies to the Applicant’s claim.

Counsel for the Respondent hospital argued that the medical panel’s certificate provided it an ‘indefeasible right’ defeating the Applicant’s claim for non-economic loss, which was not affected by the subsequent Wrongs Act amendments.

The Respondent’s submissions were based on the operation of s.14(2) of the Interpretation of Legislation Act 1984 (Vic) (‘ILA’), which provides that where an Act or provision of an Act is amended, the amendment of the Act or provision ‘shall not unless a contrary intention expressly appears’ affect the previous operation of the Act or provision or ‘anything duly done under that Act or provision’, or ‘any right acquired, accrued or incurred’ under that Act or provision. Counsel for the Respondent argued that, by reason of the medical panel’s certificate, it had acquired an indefeasible and permanent right and/or the certificate constituted something ‘duly done’, in accordance with s.14(2). It was argued that there were no express words in the amendment to negate the statutory presumption.

The Court of Appeal ultimately did not accept the Respondent’s argument. The Court held that the terms of the certificate entitled the Respondent to contend that the degree of psychiatric impairment was permanent but ‘not more than 10 per cent’ (that is, the ‘old’ threshold), rather than being entitled to contend that the Applicant had not suffered a ‘significant injury’.

The Court of Appeal held that s.28LZH does not afford an enforceable right on the Respondent; rather it obliges a court to act on the certificate which must be filed with the court. It is clear from the transitional provisions that the statement of the medical panel in the certificate was rendered irrelevant by the Wrongs Amendment Act. Furthermore, the court held that obtaining a certificate does not constitute something ‘duly done’ for the purpose of s.14(2)(d) of the ILA.

In the Court of Appeal’s own words:

To put it bluntly, Latrobe had a piece of paper which it could have deployed under the ‘old’ threshold at a later point of time to bar Mr Mitchell’s claim for non-economic loss. The amendment to the Act rendered that piece of paper inoperative under the new regime and there is nothing in s.14(2) to preserve its efficacy.

Conclusion

There is now no doubt that the recent amendments to the Wrongs Act ‘threshold level’ apply retrospectively. Insurers should note that for any extant proceeding issued before the amendments came into force and which has not yet been settled or determined, it is open for a claimant to rely upon the ‘new’ threshold levels by serving a ‘fresh’ certificate of assessment.

Authored by Derek Collins, Senior Associate and Michael Martin, Partner, Melbourne.


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