Category: Resources

ACC v Kearney (Interest on Back-Dated Weekly Compensation)

Accident Compensation Corporation (ACC) v Robert Kearney
Court of Appeal 15 April 2010.

On 13 February 1985, Mr Robert Kearney suffered injuries to his wrist and femur in a motor accident. Because of the accident Mr Kearney was unable to return to work as a saw doctor. Mr Kearney retrained as a pastor. In 1991, ACC advised Mr Kearney that they were terminating his weekly compensation payments as he was now able to resume full time employment as a pastor.

In 2003, Mr Kearney appealed the 1991 decision. The Review Officer held that ACC had unlawfully cancelled Mr Kearney’s compensation. This was because under the 1982 act a complainant was to receive compensation if they could not do the job they held prior to injury. Because of this, Mr Kearney was awarded a backdated sum. The issue in this case was whether Mr Kearney should receive interest on this payment, and if so when should it be backdated to.

The Review Officer held that interest was payable from 19 August 2003. ACC reasoned that this was the time that they had received all information necessary to enable calculation of the payment.

Mr Kearney submitted that he believed the interest should be paid from 1 June 1992, “as and when the payments are due.”

The decision: There were concerns over whether it was s 72 of the Accident Rehabilitation and Compensation Act 1992, s 101 of the Accident Insurance Act 1998 or s 114 of the Accident Compensation Act 2001 that covered Mr Kearney’s interest payments.

The judges found that all three acts covered the payment for the years that they were in force. However, the judges stated that, “for present purposes, the three provisions [were] identical”.

Chambers J, believed these sections entitled Mr Kearney to interest from, “1 month after the Corporation…has received all information necessary to enable the insurer to calculate”, a payment. ACC stated that the date they received all information was 19 August 2003 and that this is when interest should be applied from. While Mr Kearney believed that the date interest should be charged from was 31 July 1991 when payments were ceased because at that time they had all the information they required to make payments.

Chambers J, agreed with Mr Kearney because ACC was solely to blame for Mr Kearney not receiving compensation. Chambers J, believed that in deciding how the provision should be read one must look to the intention of parliament. The judge did not believe parliament would have intended “the Corporation to be able to represent to an accident victim it (wrongly) did not need any further information, and then later be able to take advantage of that error. In short Parliament would not have envisaged a situation where the Corporation sought to benefit from its own wrong.”

Conclusion: s. 72 of the Accident Rehabilitation and Compensation Insurance Act 1992, s. 101 of the Accident Insurance Act 1998 and s 114 of the Injury Prevention, Rehabilitation and Compensation Act 2001 are substantially similar. Where ACC is at fault they should not be able to benefit from their own wrong doing.

Cases Referred to:
Accident Compensation Corporation v Broadbelt [1990] 3 NZLR 169 (CA)- interest is only payable if authorised by statute.
Unwin v Accident Rehabilitation and Compensation Insurance Corporation DC Wellington 21/97 14 February 1997 – the 1992 act can backdate interest to prior to the act.
Robinson v Accident Compensation Corporation [2007] NZAR 193 (CA) s 72 of the 1992 Act, s. 101 of the 1998 Act, and s 114 of the 2001 Act use “materially the same language”.
Salt v Governor of Pitcairn and Associated Islands [2008] NZCA 128, [2008] 3 NZLR 193- Parliament would not envisage a situation where someone could benefit from their own wrong.

Asbestos: The Killer Disease

Describes the history and consequences of asbestos poisoning. Discusses the developments in accident compensation cover for asbestos related disease and the limitations of current entitlement.

By Hazel Armstrong

The ACC User Handbook to the AMA "Guide to the Evaluation of Permanent Impairment"

Defines levels of impairment for different physical and mental conditions. Used by ACC’s independence allowance and lump sum assessors.

It is proposed that the Injury Prevention, Rehabilitation, and Compensation (Lump Sum and Independence Allowance) Regulations 2002 be amended to replace the current assessment tool for determining the level of permanent impairment, from the Fourth Edition of the American Medical Association Guidelines to the Evaluation of Permanent Impairment (AMA4) and the ACC User Handbook to AMA4 to the Sixth Edition of the Guidelines (AMA6) and the ACC User Handbook to AMA6.

See the consultation on regulations for the AMA guidelines here.

Reparation Sentences Cannot Top-Up ACC Weekly Compensation – The Supreme Court Reaffirms the Woodhouse Principles

In the recent decision of Peter Miles Davies v New Zealand Police [2009] NZSC 47 (25 May 2009), the Supreme Court has ruled that Criminal Courts are not able to make reparation sentences designed to ‘top-up’ the difference between a victim’s actual loss of earnings, and the compensation received from ACC.

By Ben Thompson

Vocational Rehabilitation and Long-Term Claims

A discussion of the challenges facing long term claimants under the current accident compensation scheme. The article advocates a client centred approach with improved retraining opportunities and better matching of claimant skills with labour market realities to achieve optimal outcomes for claimants.

By Hazel Armstrong

A New Policy for Vocational Rehabilitation

A presentation focusing on the 2008 amendments to the Injury Prevention, Rehabilitation and Compensation Act. It focuses on new incentives on employers and ACC to help older workers to recover and get back to work,to provide high quality rehabilitation, new incentives to provide for longer periods of rehabilitation, and new provisions focussing on fair compensation for injured employees.

By Hazel Armstrong

ACC v Vandy (Incapacitated while Unemployed)

Accident Compensation Corporation (ACC) v Dominique Vandy
High Court Wellington November 2010

Ms Vandy, injured her hip in 2003 at the age of 12 when she fell from a horse. After leaving school she entered employment. While in this employment Ms Vandy suffered an aggravation of her earlier injury. The injury incapacitated Ms Vandy from further employment.

ACC declined Ms Vandy’s application for weekly compensation because she was not in employment at the time of injury in 2003 and therefore did not fulfil s. 103 of the act. It was ACC’s belief that for a claimant to be paid weekly compensation under the Accident Compensation Act, they must have been in employment at the time of their original incapacitation.

Decision: Gendall J, stated, that s.100 of the Accident Compensation Act is a cumulative section; For a claimant to receive weekly entitlements they must also be covered by s.103(2) and clause 32 schedule 1 of the Act. s.100 outlines who is entitled under the Act and that they must be incapacitated (“unable to engage in employment”) within the meaning of s.103 (2) of the act (“in which he or she was employed when he or she suffered personal injury”).

In light of these provisions someone may be unemployed but factually incapacitated yet they would not come within the terms of the Act. Gendall J, noted that there was unfairness in this legislation however he noted that s 37 was amended in 1993, and that at this time, including non-earners who were later incapacitated was considered as a policy option but it was not adopted.

Conclusion: Based on the legislation, the judge believed that weekly payments could not be claimed for unless the claimant had been in employment at the time of their incapacitation. The judge stated that in reading the provisions “the meaning of the statutory provisions can be interpreted in only one direction, despite understandable notions of what might be ‘fair’ in an individual case, the remedy if there is one has to be provided by parliament.

Cases Referred to: Giltrap v Accident Compensation Corporation DC Wellington 141/2006, 9 June 2006. Gendall J, affirmed this case stating that the requirements in s100 (10(a) are clearly cumulative. One is that the claimant was incapacitated within the meaning of s. 103(2). The other is eligibility under cl 32.