Threshold Injury – Peter Hunt

#54 – Supreme Court finds Consequential Surgery Constitutes “Injury”

Decision

Mandoukos v Allianz Australia Insurance Ltd [2026] NSWSC 911

Sixty-Second-Or-Less Summary

A motor accident causes a threshold injury to the Claimant’s cervical spine. The Claimant, however, subsequently undergoes cervical surgery which involves the removal of some bone.

Does the consequential surgery constitute a non-threshold injury?

In Mandoukos v Allianz, the Supreme Court concluded that bodily changes caused by consequential surgery can constitute a non-threshold injury if those changes fall outside the definition of “soft tissue injury” in s 1.6(2) of the Motor Accident Injuries Act 2017 (MAIA).

Importantly, however, the Supreme Court accepted that bodily changes caused by the consequential surgery constituted an “injury” as defined by section 1.4 of MAIA.

Principles

✅ A Claimant is not entitled to ongoing statutory benefits or common law damages if their only injuries are threshold injuries as defined by section 1.6 of the Motor Accident Injuries Act 2017 (MAIA).

✅ Bodily changes caused by consequential surgery constitute an “injury”, as defined by section 1.4 of MAIA.

✅ Bodily changes caused by consequential surgery will constitute a “non-threshold injury” if those changes fall outside the definition of “soft tissue injury” in section 1.6(2) of MAIA.

Facts

On 8 January 2019, the Claimant swerved to avoid a motor vehicle which made a turn in front of his vehicle and collided with a light post.

The accident caused a cervical strain and aggravation of pre-existing C5/6 degenerative disc disease.

The Claimant, however, subsequently underwent a C5/6 foraminotomy, which involved removing a segment of bone. There was no dispute that the surgery was related to the motor accident and was both reasonable and necessary.

The primary Medical Assessor concluded that the consequential surgery resulted in injury to bone and the partial or complete rupture of ligaments and tendons. The primary Medical Assessor proceeded to certify that the injuries sustained during the consequential surgery were not threshold injuries.

The Review Panel, however, determined that the changes to the Claimant’s body, caused by the surgery, did not constitute an “injury“, as defined in section 1.4 of MAIA. The substance of the Review Panel’s reasoning was that a change to a person’s body does not constitute an “injury” unless the person suffers some detriment. In this dispute, the surgical procedure was voluntarily undertaken and was to the Claimant’s overall benefit.

Given the Review Panel finding that the changes caused to the Claimant’s body by the surgery did not constitute an “injury”, the question of whether those changes constituted a threshold injury did not even arise.

The Claimant sought Judicial Review in the Supreme Court.

The Supreme Court’s Decision

The Supreme Court found that the Review Panel erred for the following reasons:

🟪 The Review Panel focussed, unduly, on the purpose of the surgical procedure and focussed too little on the changes to the Claimant body caused by the surgery.

🟪 The dispute required the Review Panel to consider the physical results of the surgery which included an incision to allow access to the bone which had to be removed.

🟪 The Review Panel also erred by concentrating on the difference between the Claimant’s condition before and after the surgical procedure. In assessing whether the accident caused the Claimant an injury, the Review Panel should have concentrated on the difference between the Claimant’s condition post-surgery with the Claimant’s condition before the motor accident.

🟪 The definition of “injury” in section 1.4 of MAIA is not concerned with whether the injured person has consented to surgery or whether the surgery caused further harm or damage to the injured person’s body.

🟪 The definition of “injury” in section 1.4 captures all bodily injuries caused by a motor accident, including those which result from surgery pursued for a therapeutic purpose.

🟪 The fact that the surgery had some success in alleviating the Claimant’s symptoms is irrelevant to the question of whether the surgery itself caused further bodily injury.

My Perspective

Subject to any appeal, the Supreme Court’s decision in Mandoukos resolves the doubt created by obiter remarks made by the Supreme Court and the Court of Appeal regarding whether bodily changes wrought by consequential surgery can constitute an “injury” in the absence of detriment.

That issue was squarely before the Supreme Court, on this occasion, and the Court has confidently concluded that any bodily change caused by consequential surgery falls within the definition of “injury” in section 1.4 of MAIA. It follows that it is not necessary to find detriment. The bodily change caused by the surgery is, itself, sufficient to constitute “injury”.

Whether that injury constitutes a non-threshold injury turns on whether it falls within the definition of “soft tissue injury” in section 1.6(2) of MAIA.

Given the removal of bone from this Claimant’s spine, the injury arising from his consequential surgery was clearly a non-threshold injury.

This decision should also put to an end the speculative argument that aggravation of a pre-existing injury does not constitute an “injury” for the purpose of section 1.4 and is, therefore, not compensable under the CTP scheme.

PJH

#50 – Review Panel Finds Aggravated Radiculopathy is a Non-Threshold Injury

Decision

AAI Limited t/as GIO v Lee [2026] NSWPICMP 422

Sixty-Second-Or-Less Summary

A Claimant suffers from intermittent radiculopathy before their motor accident. Their radiculopathy increases in intensity and frequency post-accident.

Has the motor accident caused the Claimant a non-threshold physical injury?

In GIO v Lee, the Medical Review Panel accepted that the Claimant sustained a non-threshold injury because the increased radicular signs demonstrated either a new injury compressing the spinal nerve root or additional compression of that spinal nerve root.

Principles

✅ Pursuant to clause 4(1) of the Motor Accident Injuries Regulation 2017, an injury to a spinal nerve root that manifests in radiculopathy is a non-threshold injury.

✅ Increased or new signs of radiculopathy suggests a new injury causing compression of the spinal nerve root or additional compression of an already compressed spinal nerve root.

✅ Increased or new signs of radiculopathy are sufficient to demonstrate a non-threshold injury.

Facts

The Claimant was involved in a motor accident on 9 April 2024. He proceeded to make a claim for statutory benefits. A dispute arose, however, over whether the Claimant only sustained threshold injuries.

The Claimant accepted that he suffered from intermittent right C6 radiculopathy before his motor accident. He said, however, that it always recovered with conservative treatment and he was not suffering from any radiculopathy immediately before the MVA. He alleged that his right C6 radiculopathy symptoms recurred, with greater intensity, following the motor accident and that his radiculopathy was now resistant to treatment.

The Insurer argued that the Claimant suffered from radiculopathy before and after his accident and that the accident had not caused any new injury.

The primary Medical Assessor determined that the Claimant sustained an aggravation of prior disc disease, particularly in relation to C5/6, with overt C6 radiculopathy. The primary Medical Assessor determined that this was not a threshold injury.

The Insurer successfully sought referral to the Review Panel.

The Review Panel’s Decision

The Review Panel agreed that the Claimant had sustained a non-threshold injury for the following reasons:

🟪 The evidence established that there was a clear escalating pattern of symptoms, post-accident, and a new symptom in the form of muscle atrophy.

🟪 The escalating pattern of symptoms indicated that the motor accident had caused further injury to the Claimant’s C6 nerve root.

The Insurer argued that to demonstrate a non-threshold injury, the Claimant had to demonstrate a new “distinct physical injury” and that an aggravation or recurrence of a previous injury is not enough.

The Review Panel rejected the Insurer’s argument for the following reasons:

🟪 The C6 nerve root is about 20 mm long and about 6 mm wide. A disc bulge can affect one side of the nerve root and an osteophyte can affect the other side of the nerve root.

🟪 Either a new injury or an aggravation of an existing injury could further compress a section of the nerve root which is already partially compressed or the compression could affect a slightly different section of nerve root.

🟪 Both the emergence of new signs of radiculopathy or the worsening of existing signs indicate that there has either been a new injury to a different part of the nerve root or there has been an aggravation causing additional compression of the same part of the nerve root.

🟪 A worsening of existing signs of radiculopathy is sufficient to demonstrate a non-threshold injury.

My Perspective

The decision in Lee confirms that a claimant demonstrates a non-threshold injury if a pre-existing condition has been aggravated.

In prior PIC decisions the Review Panel has accepted that:

🟪 The lengthening of a pre-existing annular tear is a non-threshold injury, to the extent of the new length of tearing. My Case Note can be found here.

🟪 Aggravation (even temporary) of a pre-existing PTSD is a non-threshold injury, to the extent of the increased symptoms. My Case Note can be found here.

This decision appears to simply apply the same thinking to the aggravation of pre-existing radiculopathy.

PJH

#46 – Medical Review Panel Addresses Bone (Bruising) of Contention

Decision

Fahim v Insurance Australia Limited t/as NRMA Insurance [2026] NSWPICMP 355

Sixty-Second-Or-Less Read

A Claimant suffers a right tibia contusion in a motor accident. The Insurer denies liability for ongoing statutory benefits on the grounds that the Claimant’s only injuries are threshold injuries.

Is a bone contusion a threshold injury?

In Fahim v IAG, the Medical Review Panel concluded that any injury to bone – whether a fracture or a contusion – was an injury to hard tissue which fell outside the definition of “soft tissue injury” in section 1.6(2) of MAIA.

Principles

✅ Pursuant to the definition in section 1.6 of the Motor Accident Injuries Act 2017 (MAIA) a soft tissue injury is a threshold injury.

✅ Any injury to bone – whether a fracture or a contusion – is an injury to hard tissue which falls outside the definition of soft tissue in section 1.6(2) of MAIA.

Facts

The Claimant was injured on 16 May 2024 when a car hit either her or her shopping trolley as she walked in a shopping centre car park.

Amongst other injuries, the Claimant sustained a contusion to her right tibia.

A dispute arose, between the parties, whether the right tibia contusion constituted a threshold injury or not.

If the Claimant’s only injuries were threshold injuries, she would not be entitled to either ongoing statutory benefits or common law damages.

Relevant Definitions

Section 1.6(1) of MAIA provides that a “soft tissue injury” is a threshold injury.

Section 1.6(2) of MAIA defines a “soft tissue injury” to be ” an injury to tissue that connects, supports or surrounds other structures or organs of the body (such as muscles, tendons, ligaments, menisci, cartilage, fascia, fibrous tissues, fat, blood vessels and synovial membranes), but not an injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage”.

The Review Panel Decision

The Review Panel found that the contusion to the Claimant’s right tibia was a non-threshold injury for the following reasons:

🟪 A bone contusion represents bruising to the bone.

🟪 A bone contusion results in microfractures and the build-up of blood and fluid within the bone.

🟪 Whilst not a serious as a fracture, a bone contusion is an injury to the bone.

🟪 Medically, bones (like teeth) are not soft tissue because they are hard tissue.

🟪 In Abawi, the Court of Appeal concluded that, pursuant to the definition in 1.6(2), soft tissue has the significant and characteristic function of connecting, supporting or surrounding organs of the body or other structures. Bones do not have this function. Bones are one of the structures that are themselves connected, supported or surrounded by soft tissue.

🟪 It follows that any injury to bone – whether a fracture or a contusion – is a non-threshold injury.

My Perspective

The decision in Fahim confirms that any injury to hard tissue, like bone or teeth, falls outside the definition of “soft tissue injury” in s 1.6(2) of MAIA and is, therefore, a non-threshold injury. The nature of the injury is unimportant. All that matters is that the injury is to hard tissue.

Whilst not specifically addressed in the Review Panel’s reasoning, it is worth noting that the Court of Appeal made the following obiter comments in Abawi at [42]:

“His Honour further reasoned that “the common trait or theme of the parenthesised examples (ie, muscles, tendons, ligaments etc) is that each is a connective tissue which has a unique and important role to play in orthopaedic injuries” (J [58], see also [60]). Allianz submitted that one thing that the definition of soft tissue certainly does not involve is bones and the skeletal system. The estate did not seek to defend this aspect of his Honour’s reasons.”

It is noteworthy that both parties in Abawi accepted that “soft tissue certainly does not involve…bones and the skeletal system” and that the primary judge was wrong to (indirectly) find otherwise. Furthermore, the Court of Appeal proceeded on the assumption that the parties were correct in their understanding that bones are not soft tissue, either medically or pursuant to the definition in s 1.6(2) of MAIA.

PJH

#44 – Court of Appeal Finds no Error in Delegate’s Decision Refusing to Refer Threshold Injury Dispute for Assessment

Decision

Kewin v AAI Ltd t/as GIO Insurance [2026] NSWCA 86

Sixty-Second-Or-Less Read

A claimant alleges a non-threshold psychiatric illness as a consequence of a motor accident. They lodge a threshold injury dispute in the Commission but include no evidence of a recognised psychiatric illness.

Can the President’s Delegate refuse to refer the dispute to a medical assessor.

In Kewin v GIO, the Court of Appeal determined that it was open to the President’s Delegate to invoke clause 17 of PIC 6 and request evidence of a non-threshold psychiatric injury. When no such evidence was provided, it was open to the Delegate to refuse to refer the dispute for assessment.

Principles

✅ Section 7.20 of the Motor Accident Injuries Act 2017 (MAIA) sets out the procedure to refer a medical dispute for assessment.

✅ Clause 17 of the Personal Injury Commission Procedural Direction 6 (PIC 6) provides that, in threshold injury disputes, the party applying for an assessment must produce evidence in support of their position.

✅ If the claimant is the applicant in a threshold injury dispute, they must include in their application evidence that they have a non-threshold injury.

✅ If the claimant is asserting a non-threshold psychiatric injury, they must include in their application evidence of a diagnosed recognised psychiatric illness, other than an acute stress disorder or an adjustment disorder.

Facts

The Claimant alleged both physical and psychiatric injuries following a motor accident on 23 November 2018. All parties accepted that the Claimant’s physical injuries were threshold injuries. A dispute arose, however, over whether the Claimant’s psychiatric injury was threshold or non-threshold.

The issue was important because if the Claimant only sustained threshold physical and psychiatric injuries he would not be entitled to either ongoing statutory benefits or damages under common law.

In asserting a non-threshold psychiatric injury, the Claimant produced no report by either a treating doctor or a qualified expert which diagnosed a recognised psychiatric illness.

The Claimant initiated a threshold injury dispute in the Commission. The President’s Delegate, however, dismissed the application on the grounds that the Claimant had not produced any evidence that his psychiatric injuries were non-threshold.

The Claimant’s application for judicial review of that decision was dismissed. The Claimant sought leave to appeal to the Court of Appeal.

Personal Injury Commission Procedural Direction 6 (PIC 6)

Relevantly, clause of PIC 6 provides:

“For an application for assessment of whether the injury caused by the motor accident is a threshold injury (as defined in section 1.6 of the 2017 Act) for the purposes of the 2017 Act (see Schedule 2, clause 2(e)), the applicant party must produce with the application the evidence that demonstrates the injury status as asserted by them, namely that the claimant has suffered a threshold injury or has not suffered a threshold injury within the meaning of section 1.6 of the 2017 Act.”

The Court of Appeal’s Decision

The Court of Appeal dismissed the appeal on the following grounds:

🟪 Characterisation of Delegate’s Decision

The Claimant argued that the President’s Delegate improperly concluded that there was no medical dispute between the parties. This is not what the Delegate did. Rather, the Delegate accepted that there was a dispute but declined to allow the dispute to proceed to the next step in the absence of supporting evidence.

It was open to the Delegate to give the Claimant a further opportunity to provide supporting evidence, which is what the Delegate did. When the Claimant failed to provide the supporting evidence, it was open to the Delegate to determine that clause 17 of PIC 6 had not been satisfied.

🟪 The President’s Powers

The Claimant argued that s 7.20(2) obligated the President to arrange a medical assessment given the words “is to arrange”. This argument failed to distinguish between the verbs “accept” and arrange”. Before a medical assessment can be arranged, it must be accepted. In his matter, it was open to the Delegate to refuse to accept the dispute for failure to comply with clause 17 of PIC 6.

For these reasons, the Court of Appeal found no error in the decision made by the President’s Delegate. It followed that the decision to refuse to refer the threshold injury dispute for assessment was confirmed.

My Perspective

The Court of Appeal’s decision in Kewin is important because it confirms that a President’s Delegate may refuse to refer a threshold injury dispute for assessment when the applicant has failed to obtain evidence in support to their position.

In most cases, the claimant is the applicant. It follows that the claimant’s application may be dismissed, pursuant to clause 17 of PIC 6, if they failed to obtain evidence they have sustained a non-threshold injury.

PJH

#34 – Threshold Injury Found Not to Apply to Public Transport Accidents

Decision

Russell v Allianz Australia Insurance Limited [2026] NSWPIC 129

Sixty-Second-Or-Less Read

A Claimant is injured whilst riding a bus. The bus route in question was part of the public bus network. The bus, however, was privately owned and was deployed by Transport for NSW pursuant to a contract.

Are the Claimant’s damages regulated by Chapter 5 of Motor Accidents Compensation Act 1999 (MACA) or by Part 4 of the Motor Accident Injuries Act 2017 (MAIA)?

In Russell v Allianz, a PIC Member found that an accident is a “public transport accident” within the meaning of s 121(3) of the Transport Administration Act 1988 (TAA) even where the bus is privately owned. The key question was whether the bus was being used for public transport. It followed that the Claimant’s damages were regulated by Chapter 5 of MACA, pursuant to s 121(1) of the TAA. The whole of Part 4 of MAIA was displaced, including s 4.4 which normally precludes damages were the only injuries are threshold injuries.

Principles

✅ Part 4 of the Motor Accident Injuries Act 2017 (MAIA) and Chapter 5 of the Motor Accidents Compensation Act 1999 (MACA) provide for alternative regimes for the assessment of damages.

✅ Section 121(1) of the Transport Administration Act 1988 (the TAA) effectively provides that Chapter 5 of MACA governs a claim for damages arising from a “public transport accident” and displaces the damages regime in Part 4 of MAIA.

✅ Section 121(3) of the TAA includes a definition of “public transport accident” which contemplates transport services available for use by members of the public, as part of an ordinary passenger transport system, even where a privately owned vehicle is deployed pursuant to a contractual arrangement with Transport for NSW.

✅ Section 4.4 of MAIA, which precludes damages for a claimant who has only sustained threshold injuries, is found in Part 4 of MAIA and, therefore, has no application in a claim for damages arising from a “public transport accident”.

Facts

On 19 August 2019, the Claimant was riding on a public bus from Campbelltown to Liverpool.

The owner and operator of the bus provided bus services pursuant to a contractual arrangement with Transport for NSW as part of the State’s metropolitan bus network.

An issue arose between the parties as to whether the Claimant’s claim for damages was governed by Part 4 of the MAIA or Chapter 5 of MACA. The question turned on the operation of section 121 of the TAA.

The outcome of this dispute was critical because it was agreed, between the parties, that the Claimant only sustained threshold injuries, as defined by s 1.6 of MAIA.

Putting it bluntly, if the damages claim was governed by Part 4 of MAIA, the Claimant was not entitled to damages by virtue of section 4.4. That prohibition might not apply, however, if the damages claim was governed by Chapter 5 of MACA.

The Member’s Decision

The Member found that the damages claim was governed by Chapter 5 of MACA for the following reasons:

🟪 As a matter of statutory construction, s 121(3) of the TAA denotes transport services available for use by members of the public, forming part of an ordinary passenger transport system, as distinct from transport used privately or for a restricted or specialised purpose.

🟪 The key factor is whether the transport is part of a public system, not whether the vehicles in question are privately owned.

🟪 In this claim, the bus may have been privately owned, but it was deployed, pursuant to a contractual arrangement, as part of a network of public transport.

🟪 The claimant was, therefore, injured in a “public transport accident” within the meaning of s 121(3) of the TAA.

🟪 By operation of s 121(1) of the TAA, the Claimant’s damages are governed by Chapter 5 of MACA.

🟪 Section 4.4 of MAIA is confined to the damages regime established by Part 4 of MAIA.

🟪 Section 4.4, therefore, does not bar an award of damages governed by Chapter 5 of MACA.

My Perspective

McTye v Chang

The Court of Appeal decided in McTye v Chang [2025] NSWCA 3 that an accident involving a public bus constituted a “public transport accident” within the meaning of section 121(3) of the TAA. Putting that another way, the Court of Appeal decided that an accident involving a bus was not absorbed by the prevailing motor accidents legislative scheme merely because the accident involved a motor vehicle.

The practical consequence of the McTye decision was that a claim for damages arising from the use or operation of a public bus was – in accord with section 121(1) of the TAA – governed by Chapter 5 of MACA even where the accident occurred after the commencement of MAIA.

The Court of Appeal, however, was not called upon to determine whether an accident on a public bus network was still a “public transport accident” where the bus in question was provided by a private company for use by Transport for NSW pursuant to a contractual arrangement.

The decision in Russell is important because it purports to fill that gap. The Member decided the key question was whether the bus route was part of a public bus network rather than whether the bus was State-owned or privately owned.

Precedent Value

It is important to note, however, that this is a decision of a single Member and holds no greater precedent value than the decision of any other Member. It will be interesting to see whether a Court is called upon to resolve this discrete question.

Availability of Statutory Benefits

It is equally important to note that this decision only impacts the assessment of damages in public transport accident claims.

Pursuant to the Court of Appeal’s decision in McTye – as expanded by this decision – damages are assessed pursuant to Chapter 5 of MACA where a claimant is injured by a bus on a public bus network (irrespective of who owns the bus).

If the bus accident occurred after 1 December 2017, however, the hypothetical claimant may still recover statutory benefits pursuant to Part 3 of MAIA because they have been injured in a motor accident in NSW (thereby satisfying section 3.1 of MAIA).

How Part 3 of MAIA interplays with Chapter 5 of MACA remains a matter for conjecture.

PJH

#33 – Extension to Annular Tear Found to be Non-Threshold

Decision

Jung v Allianz Australia Insurance Limited [2026] NSWPICMP 128

Sixty-Second-Or-Less Read

A Claimant is involved in a rear end collision. The Claimant suffered from pre-existing annular tears in her cervical spine. An MRI scan, post-accident, demonstrated marrow oedema and a punctate area of high signal at C6/7.

Did the accident cause the Claimant a non-threshold physical injury?

In Jung v Allianz, the Medical Review Panel found that the post-accident MRI findings demonstrated an extension to the Claimant’s pre-existing annular tears. Given that this involved partial rupture of cartilage, the Review Panel accepted that the injury fell outside the definition of “soft tissue injury” in s 1.6(2) of MAIA and was, therefore, a non-threshold injury.

Principles

✅ A claimant is not entitled to ongoing statutory benefits and/or common law damages if their motor accident only causes them threshold injuries.

✅ Section 1.6(1) of the Motor Accident Injuries Act 2017 (MAIA) says that a threshold physical injury is a “soft tissue injury”.

✅ Section 1.6(2) of MAIA defines what is and what is not a “soft tissue injury” and says, inter alia, that a complete or partial rupture of cartilage is not a “soft tissue injury”.

✅ An accident-related extension to an annular tear constitutes a non-threshold injury because it involves a partial rupture of cartilage.

Facts

On 10 December 2022, the Claimant was riding in the back seat of a vehicle which was stationary at traffic lights when the vehicle was rear-ended by the insured. The impact allegedly caused injuries to the length of the Claimant’s spine, chest and right shoulder.

The Insured denied liability for ongoing statutory benefits on the grounds that the only injuries sustained by the Claimant were threshold injuries. A primary PIC Assessor found that none of the injuries alleged by the Claimant were caused by the accident. The Claimant successfully sought referral to a Review Panel.

The Review Panel Decision

The Review Panel found a non-threshold injury to the Claimant’s cervical spine for the following reasons:

🟪 An MRI scan in June 2019 – some 3.5 years prior to the MVA – revealed pre-existing annular tears at C4/5 and C6/7.

🟪 The Claimant experienced neck pain on the night of the MVA.

🟪 Hospital records prepared four days post-accident verify neck complaints.

🟪 The rear-end collision was capable of causing the alleged injury to the Claimant’s cervical spine.

🟪 An MRI scan in March 2023 showed marrow oedema and a punctate area of high signal at C6/7, which indicated an acute injury.

🟪 The MVA made a more than negligible contribution to the extension of the Claimant’s pre-existing annual tears.

🟪 The MVA, therefore, caused a partial rupture of cartilage which falls outside the definition of “soft tissue injury” in section 1.6(2) of MAIA.

My Perspective

The decision in Jung confirms that a claimant can demonstrate a non-threshold injury if they can satisfy a Medical Assessor that an MVA caused an extension in their pre-existing annular tear. The extension represents an additional rupture to cartilage, caused by the accident, which falls within the list of exceptions in the definition of “soft tissue” injury in section 1.6(2) of MAIA.

PJH

#26 – Defining the Scope of a Threshold Psychiatric Dispute

Decision

Allianz Australia Insurance Limited v Meilak [2025] NSWPICMP 980

Sixty-Second-Or-Less Read

A Claimant alleges he sustained PTSD as a consequence of a motor accident. On a threshold injury dispute, the primary Medical Assessor agrees. The Review Panel, however, diagnoses a Persistent Depressive Illness.

Is the Review Panel permitted to find a diagnosis not listed by the parties?

In Allianz v Meilak, a Review Panel found that the Court of Appeal’s decision in Mandoukos did not prevent it from selecting its own psychiatric diagnosis, even if that diagnosis fell outside the list of diagnoses advanced by the parties to the dispute.

Principles

✅ The ambit of a threshold psychological injury dispute is whether the Claimant suffered a psychological injury as a result of the accident and, if so, whether that injury was a threshold injury.

✅ It is the role of the Medical Assessor / Review Panel to decide whether the accident caused a recognised psychiatric illness by reference to DSM-V.

✅ The Medical Assessor / Review Panel is not restricted to the list of psychiatric diagnoses provided by the parties.

Facts

The Claimant was injured in a motor accident on 2 June 2023. His vehicle was stationary when the Insured ran into the rear of his vehicle. The Claimant alleged injuries to his neck and lower back, together with a psychiatric injury.

The Insurer denied liability on the grounds that the only injuries the Claimant sustained in the accident were threshold injuries. The primary Medical Assessor diagnosed PTSD, which is a non-threshold injury, entitling the Claimant to ongoing statutory benefits and common law damages.

The Insurer sought a review of the Medical Assessor’s psychiatric diagnosis.

The Review Panel Decision

The Review Panel concluded that:

🟪 The accident did not cause the Claimant PTSD because the minor nature of the impact was not a “traumatic event” resulting in “actual or threatened injury” as required by Criterion A of the DSM-V diagnostic criteria for a PTSD diagnosis.

🟪 The accident most likely caused the Claimant an initial Adjustment Disorder and his symptoms progressed to meet the criteria of Persistent Depressive Disorder.

The Review Panel made the following observations regarding the scope of the dispute before it:

🟪 The Court of Appeal found in Mandoukos v Allianz Australia Insurance Limited [2024] NSWCA 71 that “…the medical dispute ‘about a medical assessment matter’ will, in each case, be a question of fact depending upon the ambit of the dispute between the parties at the relevant time having regard to the competing claims made.”

🟪 In this claim, the dispute referred for assessment was whether the accident caused the Claimant PTSD.

🟪 It is the Review Panel’s experience, however that “psychiatric diagnoses may not remain static throughout the lifecycle of the claim and may change depending on various factors including treatment received, the claimant’s fortitude/ vulnerabilities or the general progression of the initial illness”.

🟪 The Review Panel may, therefore, diagnose a condition that is the same as, or different to, the diagnoses made by the primary Medical Assessor and/or the treating experts and/or the medico-legal experts.

🟪 For the same reason, the Review Panel may make a diagnosis which is the same as, or different from, the injuries listed in the PIC application and reply forms.

On this basis, the Review Panel revoked the primary Medical Assessor’s Certificate before proceeding to issue a new Certificate which confirmed the Claimant sustained a non-threshold psychiatric injury in the accident, albeit with a different psychiatric diagnosis.

My Perspective

The decision in Meilak is interesting because the Review Panel sidestepped what the Court of Appeal said in Mandoukos about the scope of a medical dispute and resolved the threshold injury dispute by selecting a psychiatric diagnosis which differed from that advanced by the Claimant (not to mention the diagnosis found by the primary Medical Assessor).

The Review Panel justified its departure from Mandoukos by noting that psychiatric diagnoses may change over time with treatment and as a consequence of the general progression of the condition. That justification is problematic, however, because the Claimant advanced PTSD as his non-threshold psychiatric injury and the Review Panel concluded that he never suffered from that specific psychiatric condition because the nature of the accident did not satisfy Criterion A. This was not a case where the Claimant initially suffered from PTSD but the Claimant’s psychiatric illness progressed to a different psychiatric condition over time.

The Review Panel in this case took a similar approach to the Review Panel in IAG v Kavakci.

Compare, however, the decision of a differently constituted Review Panel in Elammar v AAMI. In that dispute, the Review Panel diagnosed an Opioid Abuse Disorder but declined to certify a non-threshold psychiatric disorder because the Claimant did not list an Opioid Abuse Disorder in the list of conditions he wanted assessed.

PJH

#25 – Frivolous & Vexatious Medical Assessment Dismissed

Decision

Contarino v Insurance Australia Limited t/as NRMA Insurance [2025] NSWPIC 636

Sixty-Second-Or-Less Read

A Claimant suffers a threshold injury to their right shoulder. They subsequently seek the cost of a total right shoulder replacement with the express intention of arguing that the surgery renders the right shoulder injury non-threshold. The Insurer denies liability for the surgery because more than 52 weeks have passed since the accident and the Claimant’s only injuries are threshold injuries.

Can the Claimant’s application for a medical assessment of the treatment dispute proceed?

In Contarino v IAG, a PIC Member dismissed the Claimant’s medical assessment application, pursuant to s 54 of the PIC Act, on the grounds that it was frivolous and vexatious because the outcome did not affect the Claimant’s entitlements. The Insurer could not be liable for the treatment given the Claimant’s threshold injuries. The PIC Member also observed that the dispute could not be pursued for an ulterior purpose.

Principals

✅ Section 54 of the Personal Injury Commission Act 2020 provides that PIC proceedings – including medical assessments – may be dismissed if they are frivolous and vexatious and otherwise misconceived.

✅ Proceedings which have no potential to impact the Claimant’s entitlements are frivolous and vexatious should be dismissed.

✅ Proceedings, which cannot affect the Claimant’s entitlements, cannot be maintained for an ulterior purpose.

Facts

The Claimant was injured on 8 February 2024 when he was rear-ended whilst stationary at a set of lights.

A Medical Assessor subsequently certified that the only injuries the Claimant sustained in the accident were threshold injuries; namely soft tissue injuries to the spine and the right shoulder. The injury to the right shoulder exacerbated pain associated with a pre-existing rotator cuff repair but did not cause any new tear.

The Claimant subsequently sought approval of a right shoulder replacement procedure. The Insurer declined liability on the grounds that, pursuant to section 3.28(1)(b) of MAIA, the Claimant was not entitled to treatment and care beyond 52 weeks, from the date of the motor accident, given the uncontested finding that the only injuries were threshold injuries.

The Claimant subsequently lodged a medical dispute in the Commission.

The Insurer sought to have the medical dispute dismissed on the grounds that it could not be liable for the cost of the surgery even if a finding were made that it was reasonable and necessary and related to the motor accident.

There was no secret that the Claimant intended to use the advent of surgery to support an argument that the surgery transformed the threshold injury to her right shoulder into a non-threshold injury. That intention was openly stated in her submissions.

The Member’s Decision

The PIC Member agreed that the Claimant’s application should be summarily dismissed.

The Member stated, at the outset, that:

“This is another example of a party seeking a medical assessment where the determination will not impact on the rights and an attempt to use the determination for another purpose”.

Having made that observation, the Member provided the following reasons:

🟪 Section 54 of the Personal Injury Commission Act 2020 applies to medical assessments.

🟪 Section 54 specifically states that proceedings may be dismissed if they are “frivolous or vexatious or otherwise misconceived or lacking in substance“.

🟪 A strike out application should be exercised sparingly and in circumstances were the Claimant’s case is taken at its highest – see Insurance Australia Limited t/as NRMA Insurance v Fayed [2023] NSWPICMP 413

🟪 Pursuant to s 3.28(1)(b), the Insurer is not liable to pay for the proposed treatment in any circumstances.

🟪 The Claimant’s request for a medical assessment is frivolous and vexatious, or otherwise misconceived, in circumstances where the Insurer cannot be liable, irrespective of the outcome.

🟪 The ongoing maintenance of the proceedings, where there is no entitlement to relief, wastes costly and scarce resources where the Medical Assessor could be otherwise deployed to determine a dispute which affects a Claimant’s entitlements.

🟪 Even if allowed to proceed, the Medical Assessors findings on causation are not binding in any subsequent threshold injury dispute.

The PIC Member, therefore, dismissed the Claimant’s application for medical assessment.

My Perspective

The decision in Contarino makes it clear that the PIC will not waste its precious resources on disputes which do not affect the Claimant’s entitlements.

Furthermore, to put it bluntly, a treatment dispute relating to a threshold injury cannot be pursued with the ulterior motive of setting up an argument that the treatment renders the threshold injury non-threshold.

The Claimant’s gambit, in this case, was misguided in any event. If the shoulder replacement went to plan, the changes to the Claimant’s body resulting from the surgery would not constitute an “injury”, in the absence of detriment, pursuant to the definition in s 1.4 of MAIA. Without an “injury”, the question of threshold versus non-threshold injury does not arise. For more information see Allianz Australia Insurance Limited v Mandoukos [2025] NSWPICMP 844.

PJH

#20 – Consequential Surgery is not an “Injury” in the Absence of Harm

Decision

Allianz Australia Insurance Limited v Mandoukos [2025] NSWPICMP 844

Sixty-Second-Or-Less-Read

A motor accident causes a threshold injury to the Claimant’s cervical spine. The Claimant, however, subsequently undergoes cervical surgery which involves the removal of some bone.

Does the consequential surgery constitute a non-threshold injury?

In Allianz v Mandoukos, the Review Panel concluded that, in general terms, consequential surgery does not constitute an “injury“, as defined by s 1.4 of the Motor Accident Injuries Act 2017 in the absence of some detriment to the Claimant. In this dispute, the surgery was not an “injury” because the Claimant consented to the procedure and it resulted in a reduction of pain and an increase in function. The surgery was to the Claimant’s benefit rather than his detriment.

Principles

✅ Physiological changes caused by consequential surgery cannot constitute an “injury”, as defined by section 1.4 of MAIA, in the absence of some detriment to the Claimant.

Facts

On 8 January 2019, the Claimant swerved to avoid a motor vehicle which made a turn in front of his vehicle and collided with a light post.

The accident caused a cervical strain and aggravation of pre-existing C5/6 degenerative disc disease.

The Claimant, however, subsequently underwent a C5/6 foraminotomy, which involved removing a segment of bone.

The Insurer successfully sought referral of the threshold injury dispute to the Review Panel.

The Review Panel’s Reasons

The Review Panel accepted that the foraminotomy procedure was reasonable and necessary and caused by the injuries sustained in the motor accident.

The Review Panel, however, concluded that the changes to the Claimant’s body, caused by the surgery, did not constitute an “injury“, as defined in section 1.4 of MAIA, for the following reasons:

🟪 Section 1.4 of MAIA defines “injury” to mean “personal or bodily injury” before proceeding to include psychological injuries, pre-natal injuries and injuries to artificial members, aids and equipment.

🟪 The Court of Appeal made obiter comments in Mandoukos v Allianz Australia Insurance Limited [2024] NSWCA 71 that it is doubtful that consequential surgery could constitute an “injury” in the absence of any detrimental impact on the Claimant’s symptoms or functioning.

🟪 Whilst clause 6.113 of the Motor Accident Guidelines provides that the effect of surgery is to be included in the assessment of permanent impairment, “impairment” and “injury” are not the same thing. “Impairment” is a consequence of “injury“.

🟪 The outcome might be different if the surgery is performed negligently or causes an additional injury. In this case, the surgery was performed competently and improved the Claimant’s symptoms.

The Review Panel, therefore, certified that the surgery did not constitute an “injury” as defined by s 1.4 of MAIA.

If followed that whether the surgery constituted a threshold injury or not did not arise.

Pete’s Perspective

The Scope of the Dispute

At the outset, it is critical to understand that the decision in Mandoukos is not about causation.

The Review Panel specifically accepted that the Claimant’s foraminotomy procedure was caused by the accident.

If the Claimant ultimately demonstrated a non-threshold injury, the defendant would be liable for the full consequences of the surgery in the normal way (absent grossly negligent medical treatment). Those consequences might include, depending on the evidence, an increased WPI assessment and additional economic loss.

The issue in dispute, in Mandoukos, however, related the statutory interpretation of the gateway provisions to ongoing statutory benefits and common law damages.

Namely, whether the Claimant’s surgery constituted an “injury” as defined by s 1.4 of the MAIA. This was critical to the Claimant’s entitlements because the Claimant could not demonstrate a non-threshold injury if the surgery did not even amount to an injury in the first place. And, without a non-threshold injury, the Claimant could not proceed through the statutory gateway and recover ongoing statutory benefits or any common law damages.

So, When Does a Physiological Change Constitute an “Injury”?

At paragraph 131 of its Reasons, the Review Panel helpfully set out indicia of physiological change which might constitute an “injury“:

🟪 The change was unintentional.

🟪 The change was caused by an external force outside the control of the affected person.

🟪 The change is neither planned nor deliberate.

🟪 The change would have an adverse effect on the individual.

🟪 A reasonably minded individual would not consent to the change.

In this dispute:

🟪 The Claimant’s decision to undergo the surgery was deliberate and considered.

🟪 The aim of the surgery was to provide relief to the Claimant’s cervical spine symptoms.

🟪 The surgery did, in fact, improve the Claimant’s pain and function.

What About Treatment Which Goes Wrong?

The Review Panel’s decision in Mandoukos deals with a case where the Claimant’s surgery went to plan.

The outcome is likely to be different if the surgery (or other treatment) does not go to plan and the Claimant suffers further harm, either because the existing injury is exacerbated or a new injury is caused.

There have been some recent Review Panel decisions which concluded that additional harm caused by consequential treatment can constitute a non-threshold injury.

🟪 In Gibbin v AAI Ltd t/as GIO [2025] NSWPICMP 523, the Claimant sustained a rotator cuff tear during a manipulation under anaesthetic procedure. The Review Panel found that the tear was a non-threshold injury caused by the motor accident. My Case Note on Gibbin can be found here.

🟪 In Allianz Australia Insurance Limited v Miles (No 3) [2025] NSWPICMP 565, the Claimant suffered leg weakness following a cortisone injection. The leg weakness caused a fall which caused a right rotator cuff tear. The Review Panel found that the rotator cuff tear was a non-threshold injury caused by the motor accident. My Case Note on Miles can be found here.

What distinguishes these decisions from Mandoukos is that the consequential treatment resulted in detriment to the Claimant. It followed, in each case, that the detrimental physiological change caused by the treatment constituted an “injury” as defined by s 1.4 of MAIA. In these two examples, the injuries in question – rotator cuff tears – fell outside the definition of “threshold injury” in s 1.6.

What About WPI Assessments?

The decision in Mandoukos only relates to whether consequential surgery constitutes an “injury” pursuant to the definition in s 1.4 of MAIA.

As the Review Panel correctly pointed out, when it comes to the assessment of permanent impairment, clause 6.113 of the Motor Accident Guidelines provides that the effect of surgery is to be included in the assessment.

So, this is (yet another) potential anomaly in the legislation.

Consequential surgery which goes to plan and does not cause any additional detriment to the Claimant is not an “injury” pursuant to the definition in s 1.4.

If, however, the Claimant has a non-threshold injury, the effects of surgery related to that injury does count when assessing the Claimant’s permanent impairment.

PJH

#6 – Can Injury Sustained During Consequential Treatment be a “Non-Threshold” Injury?

Decision

Allianz Australia Insurance Limited v Miles (No 3) [2025] NSWPICMP 565

Principles

✅ At Common Law, injury sustained during the application of reasonable and necessary treatment may have been caused by the motor accident unless the treatment is grossly negligent.

✅ A right shoulder injury sustained as a consequence of a fall caused by leg weakness following a cortisone injection was, therefore, caused by the accident.

✅ The Court of Appeal has previously doubted, however, whether injury sustained during consequential treatment is an “injury” for the purpose of section 1.4 of the Motor Accident Injuries Act 2017 (MAIA) – see Mandoukos v Allianz Australia Insurance Limited [2024] NSWCA 71.

Sixty-Second-Or-Less Read

A Claimant sustains a soft tissue injury to her lumbar spine in a motor accident. She subsequently gets a cortisone injection which causes left leg weakness and she sustains a fall. The fall causes a right rotator cuff tear.

Does the Claimant’s right rotator cuff tear satisfy the threshold injury test and entitle her to ongoing statutory benefits and common law damages?

In Allianz v Miles, the Medical Review Panel determined that there was a causal chain linking the rotator cuff tear to the accident. The Panel also concluded that the rotator cuff tear was an “injury” for the purpose of s 1.4 of the Motor Accident Injuries Act. The accident, therefore, caused a non-threshold injury to the right shoulder.

Facts

On 30 April 2022, the Claimant approached a roundabout with the intention of turning left. Before she could do so, however, the Insured vehicle collided with her vehicle from behind.

The Claimant asserted that she sustained various non-threshold physical and psychiatric injuries which would entitle her to ongoing statutory benefits and common law damages.

Given that the various injuries were raised at different times, there were multiple applications for assessment and further assessment.

This dispute, however, related to whether the accident caused a non-threshold injury to her right shoulder. The original PIC Medical Assessor certified that the motor accident caused a non-threshold injury to the Claimant’s right shoulder in the form of a right rotator cuff tear.

The Insurer submitted that the right rotator cuff tear was caused by a subsequent fall on 18 October 2022, some six months post-accident, and that the motor accident made no causative contribution to the fall.

The Insurer successfully sought referral to the Medical Review Panel.

The Review Panel’s Decision

Was the Right Rotator Cuff Tear Caused by the Accident?

The Review Panel accepted the following chain of causation between the motor accident and the Claimant’s non-threshold, right shoulder injury:

✅ The motor accident caused a threshold injury to the Claimant’s lumbar spine.

✅ The lumbar spine injury necessitated a cortisone injection.

✅ The cortisone injection caused the Claimant’s left leg to give way.

✅ The Claimant’s fall caused a non-threshold injury to the right shoulder in the form of a high-grade partial thickness supraspinatus rotator cuff tear.

The Review Panel therefore concluded that the motor accident could have medically caused the rotator cuff tear and did, in fact, cause that tear.

In coming to this conclusion, the Review Panel applied the High Court’s decision in Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522, which remains the leading authority for the proposition that the original tortfeasor remains liable for any additional injury caused during treatment for an accident-related injury unless the treatment can be characterised as grossly negligent.

Was the Right Rotator Cuff Tear an “Injury”?

Having found that causation was established, the Review Panel proceeded to consider whether the right rotator cuff tear was an “injury” within the meaning of section 1.4 of MAIA.

The Review Panel had regard to doubts expressed by the Court of Appeal, albeit in obiter remarks, regarding whether injury sustained via consequential surgery fell within the definition of “injury” in s 1.4.

The Review Panel concluded, however, that the Claimant’s right shoulder injury fell within the section 1.4 definition of “injury” given the causal connection between the lumbar spine injury, the cortisone injection, the left leg weakness and the fall, together with fact that the fall caused the Claimant harm.

Conclusion

Given its conclusion that the right shoulder injury was an “injury” for the purpose of section 1.4, it followed that it was a non-threshold injury caused by the motor accident.

Pete’s Perspective

The question of whether the Claimant can satisfy the threshold injury test – and become entitled to ongoing statutory benefits and common law damages – by relying, solely, on an injury sustained during consequential treatment remains unresolved.

The Court of Appeal in Mandoukos v Allianz Australia Insurance Limited [2024] NSWCA 71 expressed doubts on this question, at [99], as follows:

“In any event, even on the assumption that the removal of bone during the foraminotomy procedure could be a personal or bodily injury as defined in the Act (a question which, as set out at [54] above, it is unnecessary and inappropriate for this Court to determine) my provisional view is that that would be a “different” injury from the injury to Mr Mandoukos’ cervical spine sustained at the time of the motor accident. The foraminotomy procedure occurred some 18 months after the motor accident. It involved a mechanism, consensual surgical removal of bone, entirely separate from the impact of the motor accident. That is so even though it was performed by reason of Mr Mandoukos’ symptoms resulting from the motor accident. It is also of a different character from an assault or impact upon the body consequent upon the forces of the motor accident. Ultimately, however, if Mr Mandoukos seeks referral of a medical dispute as to whether the foraminotomy procedure has the consequence that the cervical spine injury he sustained in the motor accident is a minor injury, that question can be assessed by a medical assessor.”

The Review Panel in Miles sidestepped Mandoukos by stressing that the Claimant’s lumbar spine injury caused the need for cortisone treatment, which caused the left leg weakness, which caused the fall, which caused the right shoulder injury. A similar approach was recently adopted in Gibbin v AAI Ltd t/as GIO [2025] NSWPICMP 523, albeit without reference to Mandoukos.

The difficulty is that the same reasoning process could have been applied to Mr Mandoukos’ foraminotomy procedure. His accident caused a neck injury, which caused the need for a foraminotomy, which caused the removal of bone.

Yet the Court of Appeal still expressed doubts over whether the removal of bone was an “injury” pursuant to section 1.4 of MAIA.

The distinction appears to be that the foraminotomy procedure which Mr Mandoukos underwent did not cause him any additional detriment or harm. It was designed to improve his physical condition. It followed that the removal of bone was not an “injury“.

By contrast, the cortisone injection, in this claim, caused a fall which resulted in additional harm to the Claimant, by way of a rotator cuff tear.

Ultimately, however, there will still be confusion over whether injury sustained during consequential treatment can produce a non-threshold injury until a higher court is called upon to determine the issue.

My full case note on Mandoukos can be found here.

My full case note on Gibbin can be found here.

#4 – Review Panel finds Rotator Cuff Tear Sustained During Treatment is a Non-Threshold Injury

Decision

Gibbin v AAI Ltd t/as GIO [2025] NSWPICMP 523

Principles

✅ At Common Law, injury sustained during the application of reasonable and necessary treatment may have been caused by the motor accident unless the application of the treatment is grossly negligent.

✅ A rotator cuff tear sustained during treatment for a frozen shoulder was, therefore, found to be a non-threshold injury.

✅ The Court of Appeal has previously doubted, however, whether consequential surgery constitutes an “injury” – see Mandoukos v Allianz Australia Insurance Limited [2024] NSWCA 71.

Sixty-Second-Or-Less Summary

A Claimant suffers a frozen left shoulder as a consequence of a motor accident. She subsequently undergoes manipulation of her shoulder under anaesthetic which, on the balance of probabilities, causes a right rotator cuff tear.

Has the Claimant sustained a non-threshold injury?

In Gibbin v GIO, the Medical Review Panel noted that the original accident caused any injury sustained during reasonable and necessary treatment unless the treatment was grossly negligent because a mishap during treatment is a foreseeable consequence of the original accident. The Panel, therefore, concluded that the motor accident caused the rotator cuff tear which is, of course, a non-threshold injury.

Query, however, whether the Review Panel overlooked the Court of Appeal’s decision in Mandoukos v Allianz.

Facts

The Claimant was injured in a motor accident on 21 March 2019 when the vehicle she was driving was struck from behind at 80 kph.

The Insured denied liability for ongoing statutory benefits (and, effectively, for common law damages) on the grounds that the only injuries sustained by the Claimant were threshold injuries.

The threshold injury dispute proceeded to the Commission for assessment. A Medical Assessor subsequently found that the accident caused soft tissue injuries to the cervical spine and left shoulder, which were both threshold injuries.

The Medical Assessor noted a left rotator cuff tear, revealed by an MRI in November 2020, but concluded that the tear was age-related and not caused by the motor accident.

The Claimant successfully applied for referral to the Review Panel.

The Review Panel’s Decision

The Review Panel determined that the motor accident caused a non-threshold injury to the Claimant’s left shoulder for the following reasons:

🟪 Whilst there was no history of any direct impact to the Claimant’s left shoulder, she was holding the steering wheel when the rear-end impact occurred.

🟪 The forces involved in the accident were capable, from a medical perspective, of causing a left shoulder injury.

🟪 The Claimant made complaints of left shoulder pain to her GP seven days post-accident.

🟪 The Claimant subsequently developed a frozen left shoulder.

🟪 On the balance of probabilities, the accident caused an injury to the Claimant’s left shoulder which developed into a frozen shoulder.

🟪 The Claimant underwent manipulation of her left shoulder under anaesthetic on 15 November 2019.

🟪 A subsequent MRI scan on 26 November 2020 revealed a full thickness left rotator cuff tear.

🟪 The manipulation under anaesthetic procedure was a reasonable and necessary treatment measure to address the Claimant’s frozen left shoulder.

🟪 A torn rotator cuff is a known risk associated with manipulation under anaesthetic.

🟪 The High Court held in Mahony v J Kruschich (Demolitions) Pty Ltd [1985] HCA 37; (1985) 156 CLR 522 that the original tortfeasor remains liable for injury caused by any subsequent treatment unless the conduct of the subsequent treatment provider can be categorised as grossly negligent.

🟪 It followed that the accident caused a frozen left shoulder, necessitating manipulation under anaesthetic, which caused a rotator cuff tear which is a non-threshold injury.

Pete’s Perspective

The Review Panel in Gibbin applied the common law principle that an adverse treatment outcome, even if the result of negligence, is a foreseeable consequence of the original tortfeasor’s negligence in causing the original accident. Only gross negligence breaks the causal chain between the original accident and the adverse treatment outcome.

The Review Panel, therefore, concluded that the motor accident caused the left rotator cuff tear which resulted from the manipulation under anaesthetic designed to alleviate the Claimant’s frozen shoulder. There was no suggestion that the rotator cuff tear was the result of gross negligence. It was a foreseeable risk of the manipulation under anaesthetic.

The Review Panel appears to have overlooked, however, the doubts expressed by the Court of Appeal in Mandoukos v Allianz, at [99], re whether consequential surgery can transform a threshold injury into a non-threshold injury. My full McCabes Lawyers Case Note on Mandoukos can be found here.

PJH

#3 – Review Panel Wrong-Footed by Wingfoot

Decision

Insurance Australia Ltd trading as NRMA Insurance v Cahill [2025] NSWSC 828

Principles

✅ A decision-maker fails to provide a proper path of reasoning if it states a conclusion without explaining how they came to that conclusion by reference to the evidence before them.

✅ A decision-maker denies a party procedural fairness if it decides a dispute on a basis not put by the parties without giving the parties a chance to be heard.

Sixty-Second-Or-Less Summary

A Review Panel finds a lumbar cartilage tear and concludes that the motor accident caused a non-threshold injury.

The Insurer seeks Judicial Review in the Supreme Court.

Is the Review Panel’s decision afflicted by administrative error?

In IAG v Cahill, the Supreme Court found that the Review Panel failed to explain how it came to a random conclusion which was not addressed by either party and that the Review Panel denied the Insurer procedural fairness by not giving it a chance to address the random conclusion it proposed reaching.

Facts

The Claimant was injured in a motor accident on 9 July 2020.

The Insurer subsequently determined that the Claimant was not entitled to ongoing statutory benefits (or common law damages) because the injury to this lumbar spine was a threshold injury.

The threshold injury dispute proceeded to a PIC Medical Assessment. The original Medical Assessor determined that the accident did not cause any injury to the Claimant’s lumbar spine and that any lumbar complaints were caused by pre-existing multiple sclerosis.

The Claimant successfully sought a referral to the Review Panel. The Review Panel disagreed with the original Medical Assessor and found that the accident caused a non-threshold injury to the lumbar spine based on a tear of the lumbar disc cartilage.

The Insurer sought Judicial Review in the Supreme Court.

The Supreme Court’s Decision

Justice Adamson allowed the Insurer’s application for two reasons:

🟪 Failure to Give Reasons – the Review Panel failed to include any information in its reasons to explain its finding that the accident caused a lumbar disc cartilage. As such, the Panel failed to meet the standard required by Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 because the Panel failed to set out the actual path of reasoning which led to its conclusion.

🟪 Denial of Procedural Fairness – the Review Panel found a lumbar cartilage tear in circumstances where neither party presented any evidence or submissions with regard to the presence of a lumbar cartilage tear and neither party could have contemplated that the Review Panel would resolve the dispute on the grounds of a lumbar cartilage tear. The Panel denied the Insurer procedural fairness because it failed to alert the Insurer to its thinking and give the Insurer an opportunity to be heard on the cartilage tear issue.

Pete’s Perspective

The Supreme Court’s decision in Cahill confirms the high onus on a PIC Medical Assessor or a PIC Review Panel to give proper reasons for their decision. In this dispute, the Review Panel fell short of the required standard by making an apparently random decision without either explaining their thinking of giving the parties a chance to be heard on the random conclusion it reached.

PJH