Clarification of “one claim” policy under Section 66 (1A)

The Workers Compensation Legislation Amendment Act 2012 (NSW) made significant changes to the workers’ compensation scheme in New South Wales. One of the key changes introduced by the 2012 amendments is the “one claim” policy. 

The “one claim policy” is contained in Section 66 (1A) of the Workers Compensation Act 1987 (“1987 Act”) as amended in 2012. The section states that “only one claim can be made under this Act for permanent impairment compensation in respect of the permanent impairment that results from an injury”. 

The amendments also included a savings and transitional provision regarding this, that is the clause 15 of Part 19 H to Schedule 6 to the 1987 Act which states that “the 2012 amending Act extends to a claim for compensation made on or after 19 June 2012, but not to such a claim made before that date”.  

Cram Fluid Power Pty Ltd v Green [2015] NSWCA 250

On 27 August 2015, the New South Wales Court of Appeal handed down its decision in the case of Cram Fluid Power Pty Ltd v Green [2015] NSWCA 250 (“Cram Fluid”). The case dealt with the application of the one claim limitation brought about by the 2012 amending Act which involved a worker who had previously recovered a lump sum compensation prior to 19 June 2012. 

Facts

The worker, Mr Green suffered an injury to his back on 24 May 2005 and made a claim for permanent impairment compensation under Section 66 of the 1987 Act on 14 December 2020. The claim was resolve by means of Complying Agreement for 7% whole person impairment (WPI) in 2010 (“the 2010 Claim”). 

Mr Green’s condition deteriorated, and he had spinal surgery in September 2012. After the surgery, Mr Green made a claim for permanent impairment under Section 66 for 22% WPI (“the 2013 claim”) with credit sought for the amount paid in respect of the 2010 claim. 

The 2013 claim was rejected by the insurer and Mr Green commenced proceedings in the Workers Compensation Commission. 

Arbitrator’s decision 

The arguments revolved around the “one claim” policy introduced by the 2012 amending Act and its effect on workers’ rights to pursue subsequent claims for permanent impairment compensation under Section 66.  

The arbitrator Harris found that Mr Green was not precluded by the 2012 amending Act from pursing his 2013 claim and referred him to an AMS to assess the degree of permanent impairment.

Presidential decision 

The employer appealed the Arbitrator’s decision. On appeal, the NSW Court of Appel unanimously held that Section 66 (1A) of the Act applied to prevent Mr Green from making a further claim, namely the 2013 claim for the same injury that Mr Green had previously claimed and resolved.

The decision in Cram Fluid clarified the meaning of the words “one claim” in Section 66 (1A) of the Workers Compensation Act 1987 Act. The impact was to limit workers to have one claim ever for permanent impairment compensation. The only exception was for workers who had made a claim for further lump sums prior to the commencement of the 2012 amendments on 19 June 2012, which is unresolved, could only proceed with that further claim. 

Further Legislative Change

The decision in Cram Fluid had been widely criticised by legal commentators and worker advocacy groups for unfairness caused to workers by its impact. The long-term consequences of adopting such policy were also questioned. 

It was clearly unfair for workers who resolved their permanent impairment claims for a modest entitlement prior to 19 June 2012, when there was no “one claim” limitation, no longer be entitled to further lump sums in circumstances where they have subsequently experienced a significant deterioration in their medical condition. 

Injured workers who settled lump sums before 19 June 2021, often in circumstances where insurers promoted those settlements in order to close their claim files, did so with the knowledge that if their work-related conditions deteriorated, they could make additional lump sum compensation claims. Many of them would not have settled their lump sums had they known that they would not be able to make such further lump sum claims if necessary. 

The unfairness of this outcome was subsequently acknowledged and reflected in the following further legislative amendment in 2015. 

The Workers Compensation Amendment (Lump Sum Compensation Claims) Regulation 2015 came into force on 13 November 2015, which was introduced in response to the decision by the Court of Appeal in the case of Cram Fluid.

The new Regulation reversed the short-lived decision in Cram Fluid and explicitly provides that a worker who had made a claim for lump sum compensation for permanent impairment pursuant to Section 66 of the 1987 Act before 19 June 2012 will be entitled to make one further claim for lump sum compensation in relation to the same injury, if their work-related condition significantly deteriorates. 

The amendment also provides that there is no threshold for these further claims and the degree of permanent impairment in relation to the further claims is not required to be greater than 10% whole person impairment. 

If you believe that your condition has deteriorated significantly following receipt of your lump sum compensation that was settled prior to 19 June 2012 and you might be eligible for a further lump sum claim, please contact our staff at Alliance Compensation and Litigation Lawyers for advice.