Millar v ACC

In the High Court of New Zealand, Wellington Registry

Facts

In 1974, Mr Millar suffered an injury to his back at work, and was granted  weekly compensatory payments. Following the reports of two surgeons, which both stated that the claimant’s condition was due to disease rather than his accident, the payments were suspended in 1978.

Mr Millar obtained a new report in 1993, which said that there was not a disease process  affecting his back, and then made an application to review the suspension of entitlements. The Accident Compensation Appeal Authority made a ruling in 2003 that Mr Millar’s condition was due to a combination of disease and his workplace accident. Under the laws which applied at the time of Mr Millar’s injury, he was entitled to continuous, ongoing weekly compensation. As such, Mr Millar’s compensation was backdated to the date of the wrongful suspension of his entitlements.

Issue

The issue before his Honour Justice Simon France in the appeal to the High Court in Millar v ACC was whether Mr Millar was entitled to interest on his backdated. Section 114 of the Accident Compensation Act 2001 (the Act) states that:

The Corporation is liable to pay interest on any payment of weekly compensation to which the claimant is entitled, if the Corporation has not made the payment within 1 month after the Corporation has received all information necessary to enable the Corporation to calculate and make the payment. [Emphasis added]

What is meant by “information” in s114 is critical to the issue of whether Mr Millar is entitled to interest. On one hand, “information” could refer to only the information required to calculate the gross weekly entitlement, primarily medical evidence. However, “information” could also mean everything required for ACC to pay the claimant the correct final amount, such as Work and Income New Zealand payments or IRD special tax codes.

History

When Millar v ACC was heard in the District Court, the Court identified two areas where it felt there was insufficient information under s114 until 2003. Firstly, ACC did not have details of Mr Millar’s WINZ payments, which must be deducted and repaid by ACC; secondly, the Corporation did not have the necessary medical information, as there were insufficient reports supporting the view that Mr Millar’s condition was injury related until 2003. Precedent for this approach is set in cases such as Donovan v ACC (210/2011), where Judge Beattie states:

In the circumstances of this case, I find that necessary information within the meaning of Section 114 was advice from the appellant as to whether or not he had received any income during the period or had received a WINZ benefit.

Arguments

In the appeal at hand, France J had to determine whether the recent Court of Appeal decision ACC v Kearney had changed the law as set out in Donovan. Kearney concerned an individual whose compensation was stopped in 1991, and then reinstated in 2004. As with Millar, the Corporation needed further information to determine the level of backdated compensation, such as any earnings or benefits given, as such income is required to be deducted from backdated compensation payments. In spite of this, the Court in Kearney ruled that Mr Kearney was entitled to interest for the whole period.

Council for Mr Millar contended that Kearney has set a precedent, which applies to all cases regarding wrongful suspension. It was argued that at some point, the claimant will have been receiving compensation, and therefore ACC had the required information for weekly payments. As such, interest should be payable on backdated compensation.

ACC contended that the decision in Kearney applies only to situations where the Corporation is at fault in suspending the compensation, whereby fault refers to situations where blame for the wrongful cession of entitlements is solely due to ACC, not medical evidence received at a later date. The Corporation argued that as there is no fault on their behalf in Millar, interest should not be payable to Mr Millar.

Decision

France J says of the decision in Kearney, that “the focus indeed seems to be on whether the Corporation at some point had the information.” As such, France J favours the appellant’s interpretation of what is meant by “information”. This decision is supported by further case law, mainly at District Court level, one such example being Lethbridge. After the reinstatement of Mr Lethbridge’s compensation, the Corporation did not pay interest to the claimant. However, it was later held by Judge Middleton that ACC were obligated to pay interests, as interest payments were not designed as a penalty on the Corporation, but rather were compensatory in nature.

After discussion of the relevant law, in particular the Kearney case, France J writes:

I consider it is clear that where the Corporation has been paying compensation, stops it and then later it is held that the compensation should have continued, the claimant will be entitled to interest. It seems that this is because at the time of suspension or cancellation the Corporation had all the information it needed. The fact that it later needs further information at the time of reinstatement does not matter.

France J rejects the arguments of the Corporation that backdated interest should only be granted in situations where the Corporation was at fault, and says that in the event of an incorrect suspension “… s114 is to be applied at the time that decision was taken and not at the time the backdating is being calculated.” The District Court decision is found to be erroneous, and hence it is overruled. Mr Millar is therefore entitled to backdated interest payments.[i]

McGrath v ACC

Supreme Court reins in ACC

McGrath v ACC (SC 127/2010)

This case serves as a salient reminder to ACC that it can only make a claimant undergo the vocational independence process when he or she is “likely” to be assessed as vocationally independent; the process is not be used as a mere investigative process.

The recent Supreme Court decision of McGrath v ACC brings long-awaited clarity to the requirement under section 110(3) of the Accident Compensation Act 2001.  The section dictates that ACC must not require a claimant to participate in a vocational independence assessment unless the claimant is likely to achieve vocational independence and until the claimant has completed any vocational rehabilitation that ACC was liable to provide under his or her rehabilitation plan.

The Supreme Court emphasised that in order to commence the vocational independence process (consisting of a vocational independence occupational assessment and vocational independence medical assessment) ACC must have evidence that vocational independence is likely, at the date of referral for assessment.  The Court agreed that “likely” in this context “is an outcome reasonably in prospect” (para 33)

Chief Justice Elias recognised that the purpose of section 110(3) is “to protect claimants from unnecessary assessments where there is no real prospect of vocational independence” and that “[s]uch assessments are intrusive and upsetting” (para 32)

In order for a claimant to be vocationally independent, they must be occupationally suited to a particular job and have the medical capacity to work in that job for 30 hours or more.

In this case, when ACC required the claimant to undergo the vocational independence assessments, it had evidence from the claimant’s treating medical practitioners (a specialist in pain management and her general practitioner), that she could only sustain 15 hours of work per week.  It did not have any current medical information or opinion to suggest that she could sustain anything longer.  ACC had previously commenced the vocational independence process and had a vocational independence medical assessment that was over four years old that said the claimant could work for periods of 35 hours or more[1].  Ultimately, due to a flaw in the process, the claimant was not found to be vocationally independent.  The Chief Justice stated that it was not “reasonable to rely on an assessment that was four years out of date when supporting the view in September 2008 that vocational assessment was likely to lead to a conclusion of vocational independence when other medical opinions in the interim had expressed quite different views” (para 37).

Further, the Court warned against case managers forming a view that the claimant is likely to be assessed as vocationally independent by “extrapolating from experience with others with similar injuries”, which is contrary to the claimant’s reporting and the history of treatment and expert opinion.  In other words, the case manager’s assessment must be objective, rather than subjective (para 38).

The issue of the claimant’s pain syndrome was also addressed.  The Court recognised that notwithstanding the fact that the claimant had “self reported” pain symptoms, they were “of long standing” and had “been accepted by all professional workers dealing with” with the claimant.  The claimant’s pain specialist had certified that her pain symptoms prevented her from working more than 15 hours a week.  er  As such, the claimant’s pain management should have been taken into account before a vocational independence assessment was undertaken (para 42).

In relation to Individual Rehabilitation Plans, the Court noted that completion of an individual rehabilitation plan does not in itself justify obtaining a vocational independence assessment, without further consideration of whether completion of the plan “bore on whether vocational independence was likely”.  It cannot simply be seen as “the next stage in an inexorable process” (para 39).

The Chief Justice emphasised that the vocational independence process is the end of the process, not part of the rehabilitation programme (para 34).

This judgment serves as a pointed reminder to ACC not to use the vocational independence process as a mere investigative process; it must be likely at the time of the vocational independence process that the claimant is vocationally independent.  It is the author’s opinion that the court has effectively placed a burden on ACC to show that it has the evidence to “reasonably support” the conclusion that it is likely that the claimant will be vocationally independent (para 31).

The nature of these proceedings means that where a claimant does not believe they are likely to achieve vocational independence and/or the claimant has not completed the vocational rehabilitation as specified under the vocational rehabilitation plan, judicial review (rather than the more common ACC review) may need to be sought.

We are finding that the earlier we are involved in the vocational independence process, the fairer it is for the claimant, and the less likely it is that ACC will assess a claimant as vocationally independent.

For further information, please contact one of our team.

Andrea Vasili

July 2011

Martin V ACC (Vocational Independence)

Wildbore V ACC (Vocational Independence)

Johnston V ACC (Eggshell Skull)

Wilson V ACC (Degeneration)

Wyatt V ACC (Vocational Independence)

William Wyatt v Accident Compensation Corporation (ACC)
Wellington District Court 2006

On 19 November 2002, Mr Wyatt suffered a back injury during his work as a welder. Mr Wyatt applied for and received weekly compensation. In November 2004, ACC commenced the vocational independence process. The occupational assessor identified twelve jobs options for Mr Wyatt. The medical assessor stated that Mr Wyatt had vocational independence in three job options. The job options were Employment Programme Tutor, University and Higher Education Lecturer and Wholesale and or Retail Buyer.

Section 107(1) of the Accident Compensation Act 2001 gives ACC the ability to determine a claimant’s vocational independence where that claimant is in receipt of weekly compensation. The purpose of this assessment under s. 107(3) is “to ensure that comprehensive vocational rehabilitation, as identified in a claimant’s individual rehabilitation plan, has been completed and that it has focused on the claimant’s needs, and addressed any injury related barriers, to enable the claimant” to either maintain or obtain employment or alternatively regain or acquire vocational independence.

ACC believed it had sufficiently trained and rehabilitated Mr Wyatt to assist him back into employment. ACC believes it had done this by providing Mr Wyatt with an extensive activity based programme aimed at strengthening the applicant’s work fitness; training in computer operation; and assistance to find employment. They believed this assistance was “significant, comprehensive and directly applicable to his needs.”

Mr Wyatt did not believe he was capable of the job options recommended in his vocational independence assessment. Mr Wyatt had been provided training in a twelve hour computing course. He had also in his position as a welder sometimes shown a less experienced welder an easier way to weld a joint. However, he had attended only two years of high school and had no formal training, experience or skills relevant to conducting classes, delivering lectures and instructing students. Nor did he have any experience in designing training courses which is a requirement to become an adult tutor. Further to this he had never been employed as a retail or wholesale buyer.

Decision: Judge Cadenhead, believed the issues in this case were whether Mr Wyatt had received adequate rehabilitation, whether he was suitable for the prescribed job options and, whether he was physically able to sustain the position for 35 hours a week.

• Job suitability

Judge Cadenhead stated that, “it is important when nominating suitable alternatives that a vocational assessor analyses with some particularity in a realistic manner the specific requirements against the known background of work experience, education of the appellant against the marketability to a prospective employer.”

The judge believed it was unrealistic to think Mr Wyatt could work as a lecturer or tutor given his limited education and background. The judge also believed that Mr Wyatt would not be able to work as a retail or wholesale buyer as he had no experience in this area. In regards to this Judge Cadenhead stated “realistically, in my view, no employer having regard to the background and experience of the appellant would entertain a job application from [Mr Wyatt].”

• Rehabilitation

The Judge stated that for ACC to discharge their obligations under the Accident Compensation Act, they needed to provide Mr Wyatt with suitable rehabilitation. In particular Judge Cadenhead, believed ACC should have provided Mr Wyatt with specific training in respect to the nominated occupations, rather than the generalised training he received. Judge Cadenhead believed that the point of the rehabilitation should have been to “show that the nominated options were realistically within the grasp of [Mr Wyatt].”

• Ability to work 35 hours

Judge Cadenhead, noted that the medical assessor should have provided reasons in his assessment that the appellant could work the required 35 hours in any of the occupations. This is because the judge believed that, “where pain is a factor pertaining to capacity to work then that issue has to be dealt with as it is an important factor concerning the physical capacities of a claimant.”

Conclusion: A vocational assessment must be realistic. It must also look at a claimant’s individual skills which they have acquired through education, training and experience. Rehabilitation of a claimant should involve suitable training to ensure the claimant is prepared for the job options nominated. The medical assessment should also address the claimant’s ability to work a position for the required 35 hours.

Cases Referred to:
Ramsay (Christchurch Registry, AP 412/14/02) the High Court held that assessments of physicians qualified pursuant to the legislation will be preferred unless clear and cogent evidence to the contrary by a duly qualified physician can identify a flaw in that assessment.

Ballagh V ACC (Degeneration / Treating Surgeon)

Robert Ballagh v Accident Compensation Corporation (ACC)
Wellington District Court 2009

Mr Ballagh, sought medical treatment for a back injury on 2 May 2007. Mr Ballagh was diagnosed as having a L3/4 disc prolapse. In his course of treatment, Mr Ballagh, was seen by his GP, a doctor and a surgeon. Mr Ballagh disclosed during a complete history assessment in January 2008 that he had been in a skiing accident in January 2007. Mr Ballagh’s surgeon felt the disc prolapse was a result of the skiing accident. Because of this Mr Ballagh lodged a claim with ACC.

Prior to the 2007 skiing accident Mr Ballagh had an extensive history of back pain. In 1976 he had an L5/S1 discectomy; this was followed by two operations relating to fusion in 1984 and 1988. Until he consulted his surgeon, Mr Ballagh had believed his back pain in 2007 was a continuation of earlier problems. Mr Ballagh stated this was why he had not disclosed his skiing accident earlier.

ACC’s medical assessor disagreed to the cause of Mr Ballagh’s disc prolapse. The assessor felt that the L3/4 disc prolapse was the result of gradual deterioration and had been occurring prior to the skiing accident in 2007. The assessor believed given Mr Ballagh’s history, it was likely the disc prolapse was symptomatic of a degenerative back problem.

• Causal nexus

Judge Beattie stated the only issue for consideration was, “whether there is sufficient evidence of a causal nexus between the skiing accident and the subsequent diagnosis of a lumbar disc prolapse.”

Judge Beattie examined the evidence and concluded that there was substantial evidence that Mr Ballagh had a history of degenerative back pain. However, ACC had failed to provide evidence that the L3/4 disc prolapse was part of this degenerative condition. ACC had also failed to show that the prolapse had occurred prior to the skiing accident in 2007. The judge noted there was also no mention in the surgeon’s notes, or in the MRI scan that the L3/4 disc was in a degenerative state.

Judge Beattie believed that the Medical Examiner’s report provided by ACC was too simplistic. The judge rejected the assessor’s suggestion that Mr Ballagh’s injury could only result from non-traumatic causes. The judge felt that as Mr Ballagh’s surgeon had been the treating surgeon who identified the problem, his assessment must be given due weight.

Mr Ballagh’s surgeon had noted that the nature of the skiing accident was consistent with it having caused the disc protrusion. He also advised this disc prolapse was the source of most of Mr Ballagh’s pain subsequent to the accident. The Judge felt that with no evidence to the contrary, Mr Ballagh’s surgeon had sufficiently shown a causal nexus between the accident and the injury.

Conclusion: When examining the evidence, the Judge gave due weight to the “treating surgeon[‘s]” opinion. The Judge felt that ACC had not proven on the balance of probabilities that the prolapse was the result of a degenerative disorder. He also found there was no evidence to show that the L3/4 disc prolapse had occurred prior to the skiing accident in 2007.

Therefore, on the balance of probabilities there was a reasonable “causal nexus,” between the skiing accident and the subsequent back injury.

Blair V ACC (Delay in Claiming)

Graeme Blair v Accident Compensation Corporation (ACC)
District Court Wellington 8 February 2010

On 7 April 2008, Mr Graeme Blair went to see his doctor and was diagnosed an inguinal hernia. Mr Blair consulted his doctor several times over the following months in regards to the tumour. However, it was not until December 2008, that Mr Blair explained to his Doctor the hernia was a result of a pruning incident. Mr Blair had been standing on a ladder pruning branches of a tree. When he was stretching upwards to cut a branch he felt a sharp pain in his groin. At this time Mr Blair’s doctor advised he could claim for cover for his hernia. Subsequent to this Mr Blair lodged a claim with ACC.

The ACC branch Medical Advisor did not believe that the hernia had occurred as a result of an accident. The adviser noted that Mr Blair was “diagnosed with a hernia some 5 days after this accident without any indication that an accident had caused the hernia.” The medical adviser also felt it was important that Mr Blair did not describe the pain as “significant or severe”.

Based on the Assessor’s report, ACC declined Mr Blair’s claim. For the appeal ACC sought further expert evidence from a General Surgeon with a large hernia practise. The surgeon believed Mr Blair had not “met the requirements of contemporaneous account of accident/trauma at the first GP consultation in April 2008. While there is still a small chance that the hernia was accident related there is no way to prove or disprove this clinically at this stage, and on the balance of probabilities it is far more likely that the hernia development was associated with aging related weakening of fibrous tissues.”

The appellant stated that he had not originally discussed the background to his hernia as he was not aware he could lodge a claim with ACC for it. Mr Blair submitted the evidence given by his doctor was that in his opinion the hernia had resulted from a traumatic event. Mr Blair also stated that he fulfilled the policy guidelines for hernia cover that are set out in ACC’s publication “ACC News” Issue 59 August 2003.

Decision: Judge Beattie believed that on the balance of probabilities Mr Blair’s hernia had occurred as a result of accident. The Judge stated that Mr Blair had fulfilled all of ACC’s policy guidelines for hernia cover which gave indication as to whether the hernia was an accident. He also found that ACC had put too much weight on the fact there was no “contemporaneous account of accident/trauma at the first GP consultation.” The judge did not find this fact “insurmountable if a reasonable and believable explanation is given.” Judge Beattie, found that in Mr Blair’s case a believable explanation was given and on the balance of probabilities the hernia was caused as a consequence of a traumatic event.

Conclusion: Despite medical evidence to the contrary, a lack of evidence or a delay in recall of evidence of a contemporaneous account of an accident/ trauma is not “insurmountable if a reasonable and believable explanation is given.”

MacDonald V ACC (Weight Given to Operating Surgeon’s Opinion)

David MacDonald v Accident Compensation Corporation
Wellington District Court

On 28 June 2006, Mr MacDonald was employed as a chef. During the course of his employment he lifted a 30-litre bucket full of parsnips. It was at this time Mr MacDonald noticed a right inguinal hernia in his groin. He reported the incident to his work as a muscle strain. Mr MacDonald was diagnosed with a hernia by his doctor on 3 July 2010.

ACC had a medical professional prepare a report on Mr MacDonald’s hernia. The medical professional stated that, “the case law states that in order to obtain cover for a personal injury caused by accident there must be an injury to the abdominal wall over and above the appearance of a hernia.” On this basis ACC, declined the claim stating it did not believe that the hernia was the result of a traumatic rupture of the abdominal wall.
Mr MacDonald submitted that ACC was applying the policy guidelines for hernia cover too strictly. Mr MacDonald referred to the Brock evidentiary test for hernias stating that he fulfilled all four evidentiary criteria. He also referred to the case of Stanbury which states “the court cannot accept that such policy criteria must be rigidly adhered to when all other evidence points to a genuine case.” Mr MacDonald believed on the balance of probabilities his hernia was caused by a specific event. Mr MacDonald’s doctor and surgeon also believed that Mr MacDonald’s hernia had occurred because of a specific event.
Policy and Evidentiary Guidelines for Hernias

When deciding to cover for hernias, ACC apply the policy guidelines for hernia cover that are set out in ACC’s publication “ACC News” Issue 59 August 2003. These guidelines are:
1. A single strenuous event is claimed to have caused the hernia
2. If the accident occurred in a workplace, an incident of muscle strain is officially reported.
3. Significant groin pain was present at the time of the accident.
4. A medical practitioner diagnoses traumatic inguinal hernia within 30 days of the accident but preferable within 10 days.
5. There is no history suggestive of gradual onset or congenital inguinal hernia.

In Brock (240/2004) Judge Cadenhead said that there were 4 evidentiary
guidelines that should be utilised (although not applied rigidly) when considering
what had caused a hernia. These four guidelines were:
1. An officially reported incident of muscle strain.
2. Severe groin pain at the time of the strain.
3. Diagnosis of a hernia by a doctor within 30 days.
4. No previous history of hernia

The Act: Section 8 of the 2001 act states that a person has cover under that Act if he or she satisfies any of the criteria contained in sections 20, 21 or 22 for personal injury suffered after 1 April 2002. Section 20 concerns cover for personal injury suffered in New Zealand and is relevant to this review. In particular, it refers to personal injury (defined in section 26) caused by an accident (defined in section 25).

The Decision: Judge Cadenhead stated “that the medical evidence of the operating surgeon must be given considerable weight.” On a balance of probabilities the operating surgeon believed the hernia was caused when Mr MacDonald lifted the parsnips. Judge Cadenhead believed that the operating surgeon’s evidence was preferable to the ACC Assessor’s evidence because, the ACC Assessor was not an expert in the field of hernias and had never examined Mr MacDonald. Judge Cadenhead believed that the surgeon’s opinion along with the other facts of the case satisfied the onus of proof in favour of Mr MacDonald.

Conclusion: A Judge will give more evidentiary weight to an operating surgeon who has examined a claimant, over a medical expert who has not.

Cases referred to:
Brock (240/2004) stated there were 4 evidentiary guidelines that should be utilised (although not applied rigidly) when considering what had caused a hernia.

Stanbury (28/00), In Stanbury Judge Beattie states that the court can understand ACC having policy criteria for certain types of injury, but ACC should not be to strict in its adherence, when there is a genuine case of accident.

Smith v ACC (23/8/04 Judge Beattie, DC Wellington 255/04), a claimant must prove on a balance of probabilities that their injury is a result of an accident.

Singh V ACC (Degeneration / Treating Specialist)

Simpson V ACC (Degeneration)