Category: Cases

District Court case awards higher costs to successful appellant

The Supreme Court has issued a decision on 9 May 2012 allowing ACC cover for pregnancy following a failed sterilisation operation.  Despite the Court of Appeal decision of Accident Compensation Corporation v D, the Supreme Court found no difficulty in deciding that pregnancy can be “personal injury” capable of being covered by the ACC Scheme.

The ACC Scheme provides cover for “personal injury”, whether it is from an accident, because of certain criminal acts (e.g. rape), and for the non-ordinary or abnormal consequences of treatment.  The case of Allenby v H concerned personal injury suffered as a result of a medical misadventure (now known as “treatment injury” as amended in July 2005).

Having ACC cover is a statutory bar to suing for personal injury.  The Supreme Court has ruled that, as H could be covered for medical misadventure under the ACC scheme, H cannot sue the surgeon who performed the sterilisation procedure for compensation.

H will now have to pursue her claim for medical misadventure with the ACC.  If cover is granted (based on the specific facts of H’s case), H will be able to apply to the ACC for entitlements.  Such entitlements could include payment of treatment costs, rehabilitation (both social and vocational), and weekly compensation if her personal injury gives rise to incapacity for work.

Specifically, this case illustrates how an initial injury (e.g. impregnation following failed sterilisation) may set up “a gradual process, disease, or infection” which may in turn cause a personal injury (e.g. pregnancy).  Other examples could include an acute injury to a knee causing on-going osteoarthritis, or work-related hearing loss causing on-going tinnitus, or an acute back injury leading to urinary and faecal incontinence.  In all of these examples, the secondary injury would be covered by the ACC.

However, Justice Blanchard notes that a male’s failed vasectomy resulting in pregnancy would not result in cover for the woman’s pregnancy.  This is because a third party cannot receive cover under the ACC scheme for personal injury, except in limited circumstances, e.g. when an infection caused by a treatment injury is passed directly to that third party, or a person at work directly witnesses a traumatic event causing injury or death to a third party.

Justice Blanchard also notes that there could not be cover in other unwanted pregnancy situations (excluding pregnancy following rape) such as one resulting from a “bursting condom” or from unprotected sexual intercourse.  In these situations, there is no “treatment” and therefore no medical misadventure.

The case demonstrates the inherent tension between the ACC organisation (acting as insurance company and limiting its liability) and a statutory scheme that has replaced ordinary New Zealander’s right to sue for personal injury.  The significance of this case is that the Supreme Court has yet again mandated that the ACC legislation be interpreted expansively in relation to the consequences of personal injury.  Underpinning the judgment appears to be an avoidance of opening up the ability to sue for personal injuries.

Hazel Armstrong & Kristen Bunn

In New Zealand, mental injury arising from sexual violation is a coverable injury in our ACC scheme.  The Court of Appeal in the decision of KSB v ACC has clarified the definition of sexual violation; confirming that a partners failure to disclose to his girlfriend that he was HIV positive and having unprotected sex with her constitutes sexual violation.  Therefore, if diagnosable mental injury arising from such sexual violation occurs, it is coverable.

Salient points of the judgment include:

• A person cannot consent to unprotected sexual intercourse if they are unaware their partner carries an infectious disease capable of being transmitted via sexual intercourse (such as HIV).
• In such a situation, a claimant does not need to be infected with the infectious disease for cover for mental injury to be granted.  It is enough that there was a diagnosable mental injury arising from the sexual violation.
• A claimant does not need to prove fault on behalf of the perpetrator of the sexual violation.  The claimant does not have to reveal to ACC the name of the partner, the police do not need to be notified, and there does not need to have been a successful criminal prosecution.
• The claimant does not need to prove whether the perpetrator of the sexual violation knew the claimant had not given consent.

This case serves as a reminder of the purpose of New Zealand’s accident compensation scheme;  the ACC is there to help those suffering from trauma arising from sexual violation; both physical and mental consequences.  This case is not a revelation, but the Courts upholding the underlying principles of the scheme.

Kristen Bunn

Supreme Court reins in ACC

McGrath v ACC [2011] NZSC 77

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 Jewell

July 2011

Attached is a copy of the High Court’s decision in Martin v ACC.

A copy of the Court of Appeal’s decision in Wildbore v ACC.