Background to the case

The claimant was involved in a motor vehicle accident in November 2021, with his vehicle insured with NRMA. The other vehicle involved in the accident was insured with Allianz.

The claimant subsequently lodged his statutory benefits claim with Allianz, as he was of the view Allianz’s insured driver had caused the collision. 

A dispute arose between the two insurers as to who was the relevant insurer for the purposes of the statutory benefits claim. An application was subsequently made in the Personal Injury Commission (PIC) for a determination on the issue.

Issues in dispute

In considering the application, Member Cassidy observed:

• That the power of the PIC, in s 3.3(2) of the Motor Accident Injuries Act 2017 (‘the Act’), was limited to determining a dispute between insurers for the sole purpose of deciding which insurer will accept a claim for statutory benefits.
• That s 3.3(2) of the Act did not allow the Commission power to determine the relevant insurer for all purposes under the Act - including, specifically, whether one insurer can recover benefits paid by it from another insurer.
• It was therefore an issue of determining what was involved in an insurer ‘accepting’ the claim. In this respect, the legislative framework involves the following steps:
  1. The lodgement of the claim form.
  2. The subsequent requirement to acknowledge receipt of the claim by the insurer.
  3. The ability for the insurer to not ‘deal with’ the claim until the verification requirements are complete.
  4. For the insurer to then conduct appropriate investigations. Importantly, this would include enquiries as to whether the insurer was on risk for the vehicle involved in the accident.
  5. Additionally, under s 6.19(1) of the Act, the insurer must notify the claimant within four weeks following the statutory benefits claim being made, “whether or not the insurer accepts liability for the payment of statutory benefits during the first 26 weeks."

The Member also noted that under cl 4.26 of the Motor Accident Guidelines there were provisions for a received claim to be transferred from the ‘incorrect insurer’ to the ‘relevant insurer.’

Decision

The Member ultimately concluded that there was no dispute between the parties about which insurer would accept the claim for statutory benefits, within the meaning of s 3.3(1) of the Act. Rather, that Allianz had in fact accepted the claim for statutory benefits. On this basis, she dismissed the application.

The Member’s decision hinged on the initial liability notice issued, which accepted liability to pay statutory benefits for the initial 26-week period. In this respect, there had not been notification of any issue as to whether the insurer was the relevant insurer for the claim.

Essentially, in making the initial liability decision, it was considered that the insurer had:

• Accepted that the claimant was injured in a motor vehicle accident in NSW in accordance with s 3.1 of the Act, and
• Accepted, by implication, that it was the relevant insurer in accordance with s 3.2.

Going forward – important considerations for insurers

Firstly, when issuing a preliminary notice accepting liability to pay statutory benefits within the initial period, the insurer will be taken to have accepted the claim. The implication of the decision in this case is that the insurer cannot seek to recover those payments from another insurer at a later stage.

The Member suggested that in these circumstances insurers may consider the following courses of action:

• To not accept liability for the payment of statutory benefits, pursuant to s 6.19(1) or (2) of the Act and state the reason for denying liability on this basis.
• Alternatively, if there was some uncertainty as to the circumstances of the accident and liability, accept the claimant was injured in a motor vehicle accident, to which the legislation applies. However, that the insurer not accept that it was the relevant insurer, pending those further enquiries.

In terms of the second option, the insurer could continue to pay benefits, and seek recovery from the correct relevant insurer at a later date under s 3.2(8) of the Act.

Further information / assistance regarding the issues raised in this article is available from the authors, Frances Allen, Partner and Helene Tretheway, Special Counsel, or your usual contact at Moray & Agnew.