How to Navigate Non-Economic Loss Assessments in South Australia

DATE PUBLISHED: November 16, 2022

key takeaways

Insurers should revisit the way they assess non-economic loss claims in South Australia.

The 2013 changes to the Civil Liability Act (SA) 1936 and introduction of the Civil Liability Regulations (SA) 2013 (Civil Liability Act and Regulations) have also changed the method for assessing non-economic loss in South Australian CTP claims.

Non-Economic Loss

Civil Liability Act 1936, s3(1) defines non-economic loss as any pain and suffering injuries have caused an individual, or the resulting disfigurement or loss of enjoyment/amenity, and/or loss of expectation of life.

The changes to the Civil Liability Act and the Regulations saw South Australia introduce an amended version of Queensland's ISV assessment tool for non-economic loss.

Injury Scale Value (ISV)

A 0-100 scale for injuries based on type and severity. Courts use the assigned number to determine the type/s and amount of compensation an injured person is eligible for non-economic loss.

Before these changes, the previous scale was 0 - 60.

However, the South Australian Courts had not considered these changes until the recent decision of Plumridge v Pandelis 2022 [SADC] 42 (Plumridge). Though the ISV assessment scale is not a new concept, Plumridge is the first judicial decision since the scale's introduction in South Australia.

WHAT HAPPENED in plumridge?

Miss Plumridge (the Applicant) was injured after being knocked off her bike by a car while riding to work. As a result of the accident and her injuries, she sued Mr Pandelis (the Respondent) for negligence, claiming physical and psychiatric damages.

The Applicant's main physical injury (and 'the dominant injury') was to her right shoulder. Following the changes to Civil Liability Act and the Regulations, the injury was assessed to lie within an ISV range of 6-10.

Dominant Injury

The injury with the highest ISV rating.

So, it is important to be prepared and familiar with this new system.

But, in order to reflect how serious her psychiatric injury had affected her, the Court believed it was appropriate for the dominant injury's ISV to be higher than 10. After a 25% increase and a rounding up to the nearest whole number, the Applicant's injury's ISV was assessed as 13 points.

In the end, the Court found the Applicant suffered both physical and psychological issues from the accident and awarded her more than $270,000 in damages.

As this is the first time the ISV scale has been used in a South Australian judicial decision, it has set a precedent for what lawyers and claims handlers can expect to see for future similar cases.

The outcome has also opened up some interesting discussions around ISV assessments and the direction on how the South Australian Courts may now proceed to determine non-economic loss in future CTP claims.

Download

Non-Economic Loss Assessment Checklist

**HOW plumridge DEMONSTRATES THE WAY TO ASSESS NON-ECONOMIC LOSS**

Following the Plumridge decision, it's important to re-assess the way to determine non-economic loss.

As this is the first judicial decision following the 2013 changes, Plumridge can be used as a guide for other claims handlers on how to deal with ISV and non-economic loss in CTP claims in South Australia.

So, we are giving you just that. Below are the key take-home points from Plumridge to consider when assessing non-economic loss in South Australian CTP claims.

for Doctors and insurers:

ISV/GEPIC assessing doctors should conduct thorough examinations, keep comprehensive notes and base their opinions on them.

Thorough ISV/GEPIC assessments are likely to be preferred to assessments of doctors who fail to conduct thorough examinations or fail to keep comprehensive notes.

ISV/GEPIC assessments should be conducted with a complete medical history and history of symptomatic progress over time. These are more likely to be preferred to assessments of doctors who fail to have a complete medical history and/or accurate information about symptomatic progress over time.

for insurers:

Start by identifying the relevant item numbers attributable to each subject's accident-related injury. Then, determine the dominant injury according to the item number with the highest ISV point range.

Assess a point score for the dominant injury within the range attributable to its item number.

Determine whether the level of impact of all of the subject's accident-related injuries can sit within the allocated point score or the maximum ISV point in the item number's range for the dominant injury.

You will need an exceptional reason if you want to depart from expert opinions on GEPIC ratings and ISV numbers.

It goes against the CTP legislative framework to disregard expert medical evidence if it's accepted and unchallenged.

Uplift to the top of the range for the dominant injury's item number should only be applied if the level of the adverse impact of the injuries is so severe that the maximum ISV for the dominant injury is inadequate.

If so, an uplift of 25% can be applied without reasons and rounding up to the nearest whole number. But the uplift should rarely exceed 25%.

Restriction on employment and vocational prospects isn't relevant when assessing ISVs and non-economic loss. Instead, these should be used to calculate future economic loss.

So, keeping in mind the above, what's the best method for assessing non-economic loss?

Download

Non-Economic Loss Assessment Checklist

OUR TIPS FOR ASSESSING NON-ECONOMIC LOSS

We would suggest that the following steps are taken by insurers when assessing non-economic loss in South Australian CTP claims going forwards:

get to know your experts

As we outlined in the section above, make sure to use accredited experts who:

Are reliable history takers;
Complete thorough assessments; and
Keep up-to-date notes of their assessment to base their reports.

use prescribed authorities

Obtain early and up-to-date GP and treating specialist records dating back at least three years before the subject accident so that experts have a complete, objective history before their ISV assessment is undertaken.

Seek ISVMA/GEPIC report/s

Use these reports to address any alleged injury which may be considered 'dominant'.

Use the non-economic loss methodology

As set out in the Civil Liability Act and Regulations, this methodology is neatly followed and summarised in Plumridge when assessing damages for pain and suffering.

Do not rely too heavily on interstate case law

While a 25% uplift to an ISV score is a realistic possibility where there are multiple injuries, the uplift to an ISV range may not be so readily applied in South Australia as has been the case in like jurisdictions interstate.

conclusion

Plumridge should be used as an example of how to assess non-economic loss, now that there is finally a judicial decision to compare to – despite the changes occurring almost a decade ago.

By keeping in mind the take-home points from Plumridge and our recommended assessment steps, CTP insurers will be able to navigate non-economic loss determinations in the South Australian jurisdiction with a great deal of success.

get in touch with us!

Our team can help you in your assessment of non-economic loss by keeping you in line with the Civil Liability Act and Regulations changes.

If you require any assistance or have any questions, please fill out the enquiry form below and mention this article for an obligation-free appointment.

You can also get in touch directly with our South Australian team here.

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