Case Summary – The Cerebral Palsy Association of WA v Papalia

The issue of compliance by an insurer with s57A(3) of the Workers Compensation and Injury Management Act came before Lemonis DCJ of the District Court in a recent appeal from an arbitrator’s determination.  Judgment was delivered on 19 December 2019.

Before His Honour was a preliminary point on which the arbitrator had ruled, namely whether a returned to work or medical certification of fitness for work (eg. a final medical certificate) was relevant to the consequences of a breach of s57A(3).  In other words, if an insurer was late giving the worker notice of whether the claim was accepted, disputed or pended and the worker was potentially entitled to weekly payments by default, would it make a difference if a final medical certificate had been issued, or if the worker had returned to work?

In a fairly lengthy and thoughtful decision, His Honour found that the certification of incapacity was not relevant, but that a return to work could be relevant.

In the course of developing his reasons for the decision, His Honour made observations in regard to 3 matters, namely:

  1. Whether an employer could accept liability for a closed period of weekly payments;
  2. Whether section 61 is activated only in circumstances where weekly payments are actually being made as opposed to a situation where they are simply liable to be made; and
  3. The meaning of the phrase “the weekly payments claim” in s57A(5).

In regard to the first and second questions, His Honour seemed to favour the conclusion that liability could be accepted for a closed period of weekly payments and that notwithstanding its literal terms, it would be consistent with the scheme of the Act if section 61 was capable of being activated in circumstances where payments were not actually being made.

As for the meaning of “the weekly payments claim”, His Honour considered submissions made on the part of the appellant to the effect that this should be regarded as limited to the payments corresponding the incapacity certified on the medical certificate, or otherwise as lease, limited by any final medical certificate.

However, His Honour did not accept this argument and concluded that the phrase should not be regarded as potentially constrained by a particular period of incapacity indicated on the first medical certificate or otherwise.

As to the particular issue for determination in this case, arbitrator Rutherford considered neither the certification of incapacity, nor a return to work were relevant to the liability of the employer by reason of breach of s57A(3).  However, His Honour allowed the appeal on the basis that if there had been a return to work, this would be relevant (and a cessation of weekly payments could be open to the appellant).

This result is reasonable as it allows double recovery by a worker to be avoided, or at least minimised.  On the other hand, it could be a non-issue if recovery is capable of being addressed by s59 in any event, and whether the decision is entirely immune from criticism on the basis of the reasoning employed is another matter.  Like many sections of the current Act, an application of strict rules of interpretation can produce unintended consequences, which insurers are aware of when looking at the application of the provisions of s57A.  If, as has been indicated in the press, there is to be a substantial re-write of the Act in the near future, this section would probably benefit from a review.

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