A long-running workers’ compensation dispute involving a former New South Wales Police officer has drawn attention to how psychological injuries and secondary conditions are scrutinised in the state’s scheme, particularly when insurers rely on file-based medical opinions.
According to ABC’s report, Adam Watts, 56, served as a general duties officer for 17 years before being medically discharged in 2012 with post-traumatic stress disorder (PTSD). NSW Police accepted liability for his psychological injury, and he has continued to receive compensation benefits.
Watts said traumatic duties early in his career had lasting effects. “One of the first jobs I did was [responding to] a young guy who gassed himself in the car and the mother wanted answers and I had no answers to give her. I lost everything from policing, I lost my career, my livelihood, my health,” he said.
According to reports from his treating psychologist, Watts has continued to struggle after leaving the force, including experiencing nightmares involving past incidents and exposure to deceased persons. In 2019, he was diagnosed with Graves’ disease, an autoimmune thyroid condition that can be associated with eye, neck, and anxiety-related symptoms. Medication did not resolve the condition, and in 2023 his treating specialists advised total thyroid removal. Following surgery, he lodged a workers’ compensation claim with Employers Mutual Limited (EML), the scheme agent for NSW Police, seeking reimbursement of the approximately $6,000 cost.
EML declined liability for the thyroid surgery, citing what it described as a strong family history of hyperthyroidism. The insurer did not accept his treating doctor’s opinion that it was “possible” the Graves’ disease and subsequent relapses were “triggered by severe stress and anxiety” linked to his policing service.
Watts challenged the decision in the Personal Injury Commission and represented himself during the proceedings. EML’s case relied on an expert opinion from a medical practitioner who had not met or examined Watts in person and instead reviewed only documentary material.
The doctor, referred to as “Dr X,” questioned whether Watts had experienced significant stress prior to the Graves’ disease diagnosis, stating there were no medical notes indicating he was “markedly stressed leading up to the diagnosis in 2019.” The commission examined the contemporaneous records and found the opinion did not reflect the full clinical history, noting several entries that recorded severe anxiety, lethargy, and depression during early 2019.
Dr X further stated that the “jury was still out” on whether stress could cause Graves’ disease, while acknowledging that medical literature had, over about 70 years, referred to stress as a “potential cause.” In response to EML’s emphasis on family history, Watts’s treating doctor clarified that “the severe stress that he experienced during his time in the police force that has triggered the presentation of Graves’ disease.”
In its April 2024 determination, the Personal Injury Commission found in favour of Watts, accepting what it described as “an unbroken chain of evidence” from treating practitioners linking his accepted PTSD and the onset of Graves’ disease. The commission’s disputes officer characterised Dr X’s submission as brief, unclear, and based on an unsupported assumption.
The decision required EML to reimburse the $6,000 cost of the thyroid surgery, more than a year after Watts first lodged his claim. Watts said the process exerted significant pressure on him and those close to him. “It’s been just a shocking experience for me and my family and my partner and my children, and I just don’t want anyone else to go through it,” he said.
In a statement sent to ABC, EML said it could not comment on individual matters for privacy reasons. icare, which administers the NSW workers’ compensation scheme, also declined to comment. Under existing arrangements overseen by the State Insurance Regulatory Authority (SIRA), doctors engaged by insurers are not required to conduct in‑person examinations when preparing expert opinions, and EML submitted to the commission that this practice was appropriate where the underlying diagnosis was not in dispute.
The case sits within a broader trend of psychological injury driving costs in NSW Police claims. A recent auditor-general report found that between mid-2019 and mid-2024, psychological injury claims accounted for 74% of the force’s total workers’ compensation costs, or about $1.75 billion, compared with 26% for physical injury claims over the same period.
Workers’ compensation lawyer and Australian Lawyers Alliance spokesperson Shane Butcher, who has acted for many former officers in disputes involving EML, said his clients frequently describe the current process as difficult and protracted. He added that many former officers felt the current compensation system “isn’t looking out for them” and that these types of disputes often “compound” their injuries. “They’re suffering psychologically, so they’re finding it challenging already, then they’re met with constant barriers, constantly having to retell their story, constantly asked questions,” he said, as reported by ABC.
Butcher said EML had in other cases relied on evidence from doctors who had not consulted the claimant in person and that, on that basis, the outcome in Watts’s matter was not unexpected. According to Butcher, the present scheme design does not consistently support injured police to re-enter the workforce in modified roles or alternative employment. “There's usually an assumption that they [officers] need to prove themselves … when it’s clearly stated from their treating doctors that these people are suffering significantly,” he said.
The decision comes as the NSW government progresses a workers’ compensation reform program, with psychological injury management and independent medical assessment identified as key areas of focus for insurers, employers, and regulators.
The government is pursuing passage of the Workers’ Compensation Legislation Amendment Bill 2025 and amendments to a broader Reform and Modernisation Bill, incorporating proposals from crossbench MPs. As part of the package, the state’s chief psychiatrist has been commissioned to develop new psychiatric assessment protocols for workers’ compensation claims. icare has been directed to notify policyholders of forthcoming premium changes and to remind employers of available hardship and support provisions.
For insurers, scheme agents, and brokers, the Watts decision has renewed scrutiny of how secondary conditions linked to psychological injury are evaluated, how file-review medical opinions are weighed against treating practitioners’ evidence, and how claim handling practices intersect with a rising mental injury burden in frontline workforces.
