May 9, 2018

Insurance

The ISV 

Since the inception of the Injury Scale Value (‘ISV’) into the assessment of general damages in compulsory third party (‘CTP’) claims in South Australia, there has been much discussion regarding how it will work in practice and how the Courts will approach damages assessments.

An ISV is a numerical value on a scale from 0-100 which reflects the nature of injuries sustained and the overall impact of the injuries on the injured person. The assessment of an ISV requires consideration of all injuries sustained by an injured person and where those injuries sit in the “Ranges of Injury Scale Values”. The Ranges of Injury Scale Values is a table found in Schedule 1 of the Civil Liability Regulations 2013 (SA) (‘the Regulations’). This table lists almost every injury imaginable and ‘scales’ them between extreme and minor. The more extreme the injury the higher the ISV.

The ISV in South Australia & Queensland - Thresholds

The ISV method of assessing general damages has been in place in South Australia for now close to 5 years.  Despite that, there is yet to be a judicial determination which sets out how a Court in South Australia might interpret and apply the Regulations which prescribe the ISV regime.  That means that insurers, lawyers and other relevant parties have to date been required to assess ISVs with the guidance of Queensland Case Law (noting that the ISV scheme of assessment for general damages has been largely adopted from our Queensland friends).

Unlike the Queensland regime however, the entitlement to certain heads of damage in South Australia including general damages, future loss of earning capacity, past voluntary services and consortium, are subject to ISV ‘thresholds’. For instance, in order to have an entitlement to damages for future economic loss an injured party must achieve an ISV of greater than 7.  Similarly, in order for an injured party to be entitled to damages for general damages or past voluntary services he or she must obtain an ISV of greater than 10.  The determination of the ISV in South Australia therefore takes on greater importance as it is the gateway to many other heads of damage and not just a method by which general damages are calculated.

Irrespective of the added importance of ISV assessments in South Australia, the Regulations determining how an ISV is to be assessed are generally very similar across both states.  There are fundamental principles and rules which have been applied in Queensland cases and which Courts in South Australia are also very likely to apply irrespective of some subtle differences in the Regulations.

Assessing the ISV – A 5 Step Process

The first ever Queensland decision that dealt with the application of the ISV scheme – Coop v Johnston & Suncorp [2005] QDC 079 is a good place to start when looking at the way in which Courts have undertaken the assessment and determination of ISVs in Queensland. From pages 10 to 20 of that judgment His Honor Judge G.T. Britton SC sets out the matters to consider when assessing an ISV.  In summary His Honor was able to set out the following step by step process when determining the ISV and assessing general damages:

Step 1   All injuries must be identified.

Step 2 -     Each injury must be assessed and considered. Each injury must be classified as either minor, moderate, severe, etc. according to the Schedule of Ranges of ISVs (‘the Schedule’).

Step 3 -    In the event that multiple injuries have been sustained, there must be a determination as to which of the multiple injuries has the highest possible ISV (as per the Schedule). That injury becomes the “dominant injury” and the injury which provides the basis for the general damages assessment.

Step 4 -    Once the dominant injury has been determined, that injury must be allocated an ISV within the range allowed for by the Schedule. If the maximum ISV for the dominant injury alone is insufficient to reflect the multiple injuries sustained, then consideration is to be given as to whether the ISV should be increased to a higher ISV within the range permitted for by the Schedule for the dominant injury. 

Step 5 -    If the maximum ISV for the dominant injury alone is insufficient to adequately compensate an injured person for the adverse impact of all injuries, then consideration is to be given as to whether there should be an ‘uplift’ of the ISV beyond the maximum ISV for the dominant injury. This uplift is to be applied in percentage terms. This requires a consideration of the ‘adverse impact’ of all the injuries on the injured person.

Summary

By applying this step by step process, the assessment and determination of an ISV should be made easier notwithstanding that every case should be considered on its own facts and some cases will involve complicating factors.

Whilst medical experts and ISV medical assessments may assist in the assessment of the ISV it should be noted that the ultimate determination of the ISV is made by the Court having regard to many factors. These factors include not only the medical evidence available but also an injured person’s particular circumstances including their age, whether they suffer any pre-existing medical conditions, any life expectancy issues and so on.

It is important to remember that the ‘adverse impact’ of multiple injuries may require the assessment of an ISV which is higher than the range that would otherwise be assessed for the ‘dominant injury’ alone.