A CTP insurer’s notification – following the lodgment of a compliant Notice of Claim – that it will meet reasonable motor accident rehabilitation expenses, is routine.
What though if facts arise which warrant reconsideration of that decision?
That question arose in connection with the claim by 16-year-old Lien-Yang Lee who sustained severe spinal injuries when apparently a rear-seat passenger in a September 2013 collision.
The police description of the accident has the car in which Lien-Yang was travelling, on the wrong side of the road and the collision occurring after both vehicles corrected in the same direction before the head-on impact.
Lien-Yang’s notice of claim and supporting statements from other family members attest to his father being the driver and three children including Lien-Yang sitting in the rear seat.
The compliance notice and offer of rehabilitation was made by RACQ on 20 November 2013 but before police – who were suspicious even at the scene – had completed a DNA analysis of blood from the driver position which later transpired to be that of Lien-Yang and was consistent with his facial injuries.
Having already spent about $200k on rehabilitation, RACQ refused to make any further payments on the grounds of fraud, alleging – consistent with what police had officially concluded – that Lien-Yang had been driving unlicensed and that immediately following impact he was moved to the rear seat of the car from the driver’s position.
Lien-Yang made an application to the Supreme Court for an order that RACQ must continue to meet rehabilitation expenses and was not entitled to reconsider or rescind its original decision.
Justice Jean Dalton struggled with the competing equities of the injured party on the one hand and the insurer on the other.
She recognised the strong likelihood that fraud would be made out at trial but that on the other hand, her role was not to make a decision in that regard either way.
She also recognised that the mandatory language of Motor Accident Insurance Act s 51 suggested an insurer should not be permitted to “make successive decisions as to rehabilitation”.
In circumstances where the claimant could at least show a prima facie case – his family members at all sworn affidavits he was not the driver of the time of the accident – the circumstantial evidence of fraud suggested by DNA evidence and some witness statements was – for the purpose of this interlocutory application – inconclusive.
Because RACQ’s decision under MAIA s 39(1)(a)(iv) had been voluntary and notwithstanding the “nugatory” value to the insurer of any judgement in its favour should fraud be proved on trial, the appropriate order was that RACQ be compelled to continue with rehabilitation payments.
This was especially so since the withdrawal of rehabilitation might cause permanent irreparable deterioration in the claimant’s condition.
The parties had reached agreement on an early hearing date and the continuation of therapy until then – only another four months or so at an additional cost of about $40k – was in all the circumstances, reasonable.