A New South Wales Supreme Court ruling has put a spotlight on how insurers must handle post-surgery treatment costs under the state’s compulsory third party (CTP) motor accident scheme.
The case centres on Alexander Mayer, who was injured in a car accident in New South Wales on January 12, 2023. Insurance Australia Limited, trading as NRMA Insurance, was the CTP insurer for the vehicle Mayer considered at fault. Mayer applied for statutory benefits for injuries sustained in the accident, leading to a dispute over whether the insurer was required to pay for certain treatment expenses incurred after the statutory 26-week period.
NRMA Insurance paid $42,032.06 for surgery-related expenses received before July 13, 2023, marking the end of the 26-week period set by the Motor Accident Injuries Act 2017 (NSW). However, the insurer denied payment for an additional $3,023.12 in treatment expenses Mayer incurred after that deadline, including post-operation consultations, medication, travel to appointments, and a gym membership for rehabilitation. By the time of the judicial review, the insurer had paid all but $150 for the gym membership, but maintained it was not obliged to pay for expenses incurred after the 26-week period.
The dispute was brought before the Personal Injury Commission of New South Wales. Commission Member Elizabeth Medland determined that, under section 3.28 of the Act, the insurer was liable for treatment and care expenses directly related to, and reasonably contemplated at the time of, the surgery, regardless of whether the treatment occurred after the 26-week period. Medland focused on the statutory language, noting that section 3.28 refers to “expenses incurred” and not “treatment received,” and interpreted “incurred” as the point at which liability for an expense arises.
NRMA Insurance sought judicial review in the Supreme Court, arguing that the Commission Member erred in law and that the correct interpretation of “incurred” should limit liability to expenses for treatment actually received within the 26-week period. The insurer argued that a broader interpretation would expose insurers to ongoing liability for future expenses related to earlier treatment.
Justice Harrison dismissed the insurer’s application, finding that since the insurer had already paid the disputed expenses (except for the gym fees), there was no utility in remitting the matter for further determination. The Court did not provide a definitive ruling on the meaning of “incurred,” instead noting that the insurer had exercised its discretion to pay the treatment expenses under section 3.28(3) of the Act, which allows payment in “other appropriate circumstances.”
For insurance professionals, the case highlights the statutory and operational considerations in handling CTP claims under the Motor Accident Injuries Act 2017 (NSW). It underscores the importance of understanding statutory language and the implications of exercising discretion in claims management, especially in disputes over the timing and nature of treatment expenses.
