CERTIFICATE OF DETERMINATION OF MEMBER  	
	
Citation:	Insurance Australia Limited t/as NRMA Insurance v Mwangi [2024] NSWPIC 410	
		
Claimant:	Michael Mwangi	
		
insurer:	NRMA	
		
Member:	Maurice Castagnet	
		
DATE OF DECISION:	25 July 2024	
		
CATCHWORDS:	MOTOR ACCIDENTS - Motor Accident Injuries Act 2017 (MAI Act); settlement approval; section 6.23; claim for damages for past and future economic loss; claimant sustained a right midshaft humerus fracture, assessed at 1% whole person impairment; contributory negligence assessed by insurer at 35%; whether a buffer allowance for future economic loss is appropriate in the circumstances; Held – proposed settlement approved; deduction under 3.40(1)(b) of the MAI Act calculated accordingly to be made by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3 of the MAI Act.
	
determinations made:	CERTIFICATE
Settlement Approval
Issued under section 6.23 of the Motor Accident Injuries Act 2017
Determination
1.	The proposed settlement sum of $27,750.18 is approved under sub-s 6.23(2)(b) of the Motor Accident Injuries Act 2017.
2.	Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $10,353.53 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3.

STATEMENT OF REASONS
INTRODUCTION
1.	On 30 November 2022, the claimant, Michael Mwangi, made a claim for common law damages for the injuries he sustained in a motor accident on 13 February 2021.  
2.	The insurer and the claimant have now agreed to settle the claimant’s claim for the sum of $42,692.58 less 35% ($14,942.40) for contributory negligence on the part of the claimant (the proposed settlement).
3.	The claimant is not legally represented.
4.	Section 6.23(2) of the Motor Accident Injuries Act 2017 (MAI Act) provides that a claim for damages by a claimant who is not represented in respect of the claim by an Australian legal practitioner, cannot be settled unless the proposed settlement is approved by Personal Injury Commission (Commission).
5.	On 24 November 2023, the insurer lodged an application with the Commission to have the proposed settlement approved.
6.	The matter was referred to me to consider approval of the proposed settlement.
DOCUMENTS CONSIDERED
7.	In making my decision, I considered the following documents:
(a)	the insurer’s bundle of documents lodged with the application marked A-1 to A-24, which included the insurer’s submissions (85 pages);
(b)	the insurer’s supplementary bundle of documents lodged on 9 February 2024 (22 pages);
(c)	the report of orthopaedic surgeon Dr Todd Gothelf dated 6 May 2024, in regard to the permanent impairment assessment of the claimant, lodged by the insurer on 7 May 2024 (11 pages), and
(d)	the clinical records of John Hunter Hospital, lodged by the insurer on 
19 June 2024.
LEGISLATION
8.	In making my decision, I considered the following legislation, rules and guidelines:
•	the MAI Act;
•	Motor Accident Injuries Regulation 2017 (Regulation);
•	Personal Injury Commission Rules 2021 (PIC Rules), and
•	the Motor Accident Guidelines, Version 9.1 (Guidelines).
COMPLIANCE WITH THE PIC RULES
9.	Rule 95 (1) of the PIC Rules requires the insurer to lodge the application for approval with the Commission within seven days of reaching an agreement with the claimant about the proposed settlement.
10.	The material before me showed that the claimant accepted the settlement on 
16 November 2023. 
11.	Accordingly, the application was lodged in compliance with rule 95(1).
SUMMARY OF THE EVIDENCE
The motor accident
12.	The claimant was injured in the subject motor accident on 13 February 2021, when the vehicle in which he was travelling as a front seat passenger failed to give way and collided with another vehicle.
13.	The driver of the claimant’s vehicle recorded a blood alcohol reading of 0.241, following a breath analysis test at the scene of the accident.
14.	On that basis, the insurer contended there was an element of contributory negligence on the part of the claimant in causing his injury by travelling in a motor vehicle driven by the insured driver who was under the influence of alcohol. In its liability notice issued on 
20 February 2023, the insurer notified the claimant that it had assessed such contributory negligence at 35%. 
Medical evidence
15.	The claimant was taken by ambulance from the scene of the accident to John Hunter Hospital where he was admitted for treatment. 
16.	At the hospital, the claimant was diagnosed with a right midshaft humerus fracture and left axillary nerve neuroplaxia.
17.	The claimant was discharged on 17 February 2021, in a cast to remain in situ for six weeks and to be followed up in the fracture clinic. 
18.	The claimant was seen by orthopaedic surgeon, Dr Benjamin McGrath on 6 May 2021. In his report of the same date, Dr McGrath indicated that the humerus fracture was appropriately managed in the cast for about six weeks and this has led to the fracture healing adequately. Following his examination, Dr McGrath recommended a course of physiotherapy.
19.	The claimant attended for physiotherapy sessions on 7 May 2021, 14 May 2021, 
28 May 2021 and 10 June 2021.
20.	On 17 June 2021, the claimant was seen for a follow up by Dr McGrath. On examination, Dr McGrath noted that he had made considerable improvement, and that he had regained full range of motion. From a strength perspective, Dr McGrath thought the arm had recovered by about 67%. At the request of the claimant, Dr McGrath approved clearance for resumption of his pre-injury work duties. 
21.	On 13 September 2021, the claimant was seen for a further follow up by Dr McGrath. The claimant reported to Dr McGrath that he had been back at work for some months without any problems. 
22.	In his final report dated 5 April 2022, provided at the request of the insurer, Dr McGrath indicated that the claimant had responded well to treatment and that he had not seen the claimant since 13 September 2021. He was of the opinion that the claimant did not require any further additional treatment and believed that the claimant had achieved maximal capacity and should be back at his pre-injury level. 
23.	Orthopaedic surgeon, Dr Todd Gothelf, was qualified by the insurer to provide an assessment of permanent impairment. In his report dated 6 May 2024, Dr Gothelf assessed a whole person impairment of 1% for loss of range of motion of the right shoulder arising from the humerous fracture. Dr Gothelf noted that there was no evidence of any pre-existing condition that warranted any deduction. 
CONSIDERATION
24.	In conformity with s 6.23(3) of the MAI Act, before I approve the settlement, I must be satisfied that that it complies with the applicable requirements of the MAI Act and the Guidelines.
The claimant’s understanding of the proposed settlement
25.	According to cls 7.37 (c) and (d) of the Guidelines, I must be satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner and understands the nature and effect of the proposed settlement and is willing to accept it.
26.	I conducted several teleconferences with the parties to explore the evidence and to question the claimant about these issues. At the teleconference, the claimant appeared for himself, and Ms Natalie Baladi appeared for the insurer.
27.	The claimant indicated to me that he is aware that he was entitled to be represented by a lawyer with respect to his claim. He thought that it was not necessary to engage a lawyer and that he has chosen to represent himself.  The claimant said that he was astute about the claims process. 
28.	In answer to my questions about the impact his injuries and disabilities have had on his life and capacity to work, the claimant stated that:
(a)	his right arm and shoulder have regained full movement, and he does not have any problems with the use of his right arm or shoulder at work or for daily activities of living;
(b)	he had numbness in his left arm for a few days after the accident but since leaving the hospital, he has not had any problems with it, and
(c)	he suffered cuts and bruises in the accident and these injuries have all resolved.
29.	I explained to the claimant that the insurer will be deducting 35% (equating to the amount of $14,842.40) from the proposed settlement sum of $42,692.58 because the insurer has assessed contributory negligence on his part for causing his injury, in the circumstances of the accident.
30.	I explained to the claimant that these circumstances were that he was a voluntary passenger in a vehicle being driven by a driver who was impaired as a consequence of the consumption of alcohol and that he was aware or ought to have been aware of the driver’s impairment. The claimant said he was aware of the deduction on that basis, and that he accepted the reason for the deduction.  
31.	I explained to the claimant that according to paragraph 3.2 of the proposed Settlement Agreement, the insurer is required to deduct any amount repayable to Centrelink for any benefits received by the claimant after the accident. The claimant stated that he has not received any Centrelink benefits after the accident. I further explained to the claimant that regardless of that fact, the insurer must still proceed to obtain a clearance notice from Centrelink before any settlement funds are paid to him.
32.	I explained to the claimant that according to the MAI Act, the insurer is entitled to be repaid all the weekly payments of statutory benefits that have been made to him and according to paragraph 3.1 of the proposed Settlement Agreement, the insurer will be deducting the sum of $10,353.53 for that purpose. The claimant stated that he was aware that this deduction will be made.
33.	I indicated to the claimant that the net result of the proposed settlement is that he will receive the sum of $17,396.65 once the above deductions are made and subject to any charge by Centrelink. 
34.	I explained to the claimant that once he accepts the proposed settlement, this would end any entitlement to any further claim for damages of any kind.
35.	The claimant reconfirmed his wish to accept the proposed settlement.
36.	I explained to the claimant that because he has sustained a non-threshold injury, he is entitled to claim reasonable and necessary treatment and care expenses for life. I explained to the claimant that these claims will be managed by the insurer until 
13 February 2026 and thereafter by the Lifetime Care and Support Authority. The treatment and care benefits include the costs such as medical treatment, medication, home assistance such as lawnmowing and future surgery.
37.	I am satisfied that the claimant understands that he is entitled to be represented in respect of the claim by an Australian legal practitioner, but he has chosen not to do so.
38.	I am satisfied that the claimant understands the binding nature and effect of the proposed settlement and that he will be precluded from making any further claim for damages arising from the motor accident.
39.	I am satisfied that the claimant understands that following the settlement of his claim for damages, he has ongoing rights to claim future treatment and care.
40.	I am satisfied that the claimant is willing to accept the proposed settlement.
Is the proposed settlement just, fair and reasonable?
41.	According to cl 7.37 (b) of the Guidelines, before I approve the proposed settlement under s 6.23(3) of the MAI Act, I must be satisfied that it is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, disabilities, impairments and losses sustained by the claimant, and taking into account any proposed reductions or deductions in the proposed settlement.
42.	The proposed settlement is in the sum of $42,692.58 which represents damages for past and future economic loss. 
43.	Considering the relevant caselaw and the circumstances of the accident, I am satisfied that a deduction from the proposed settlement of 35% for contributory negligence on the part of the claimant for causing his injury, is in a percentage range that is likely to be applied by a Member of the Commission were the matter to be assessed by the Commission. 
Past economic loss
44.	In the proposed settlement, the insurer has made an allowance of $15,000 for past economic loss.
45.	At the time of the accident, the claimant was working as a Pick Packer with Bills Organic Bakery on a full-time basis, earning about $637 net week. 
46.	As a result of the accident the claimant was off work for about 18 weeks. The claimant received weekly payments of statutory benefits from the insurer during that period.
47.	His loss of earnings during that period equates to about $11,466.
48.	The insurer has made an allowance for past economic loss including loss of superannuation and Fox v Wood damages in the amount of $15,000.
49.	I am satisfied that this sum represents an appropriate allowance for past economic loss.
Future economic loss
50.	In the proposed settlement, the insurer has made an allowance of $27,692.58 as a buffer for future economic loss. 
51.	That figure is somewhat odd. The insurer explained it had originally intended to make an offer by way of a buffer in the sum of $20,000. However, due to a mathematical error, the sum of $27,692.58 was instead offered to the claimant. 
52.	The insurer submitted that the buffer was appropriate in the circumstances. The claimant has returned to full-time employment since June 2021 and continues to work on that basis without any report of any difficulty performing his work duties.
53.	Section 4.5(1)(a) of the MAI Act provides that damages may be awarded for past or future economic loss due to loss of earnings or the deprivation or impairment of earning capacity.
54.	In cases such as Medlin v State Government Insurance Commission [1995] HCA 5 and Husher v Husher [1999] HCA 47, the High Court of Australia confirmed that the issue to be determined is whether the claimant has sustained a loss or diminution of his earning capacity and if so, whether that loss or diminution will result in economic loss.
55.	In calculating any economic loss into the future, I must have regard to the provisions of 
s 4.7 of the MAI Act.
56.	Section 4.7(1) of the MAI Act provides that damages may not be awarded for future economic loss unless the claimant first satisfies the court or Commission that the assumptions about future earning capacity or other events on which the award is to be based, accorded with the claimant’s most likely future circumstances but for the injury.
57.	Section 4.7(2) of the MAI Act provides that the amount of damages for future economic loss that would have been sustained on those assumptions is to be adjusted by reference to the percentage possibility that the events concerned might have occurred but for the injury.
58.	Section 4.7(3) of the MAI Act provides that if an award for future economic loss is made, the Court or Commission is required to state the assumptions on which the award was based and the relevant percentage by which damages were adjusted.
59.	Section 4.9(1) of the MAI Act provides that where an award of damages is to include compensation, assessed as a lump sum, in respect of damages for future economic loss which is referrable to deprivation or impairment of earning capacity, the present value of the future economic loss is to be qualified by adopting the prescribed discount rate. Section 4.9(2) of the MAI Act prescribes a discount rate of 5%.
60.	Section 4.7 of the MAI Act does not preclude the awarding of a buffer for future economic loss. The occasion for a buffer in accordance with the principles enunciated in Penrith City Council v Parks [2004] NSWCA 201 is when the impact of the injury on the economic benefit from exercising earning capacity after injury is difficult to determine.
61.	The claimant is 34 years of age. He completed high school in Kenya and studied business and information technology at university. He migrated to Australia in 2019. He is studying for a master’s degree in creative industries.
62.	Following the accident in June 2021, the claimant commenced work as a Graphic Designer. He has since obtained employment as an Art Director with Oliver Marketing Australia Pty Ltd. He is currently on an annual salary of $130,000.
63.	I consider that the claimant’s most likely future circumstances, but for the injuries is that he would continue to pursue a career in the creative field using his information technology skills on a full-time basis.
64.	I accept the claimant’s evidence that he has made a good recovery from his right arm injury and this is supported by the medical evidence. 
65.	In the circumstances, I am satisfied that an allowance by way of a buffer in the amount of $27,692.58 is an adequate allowance to cater for any temporary periods of absence in the foreseeable future that may occur as a result of the right arm injury. 
CONCLUSION
66.	Having regard to all of the above matters, I am satisfied that the proposed settlement is just, fair and reasonable and within the range of likely potential damages assessments for the claim were the matter to be assessed by the Commission, taking into account the nature and extent of the claim and the injuries, the disabilities and the impairments sustained by the claimant.
67.	The proposed settlement of the claimant’s claim for damages, in the sum of $27,750.18 after a deduction for contributory negligence, is approved under sub-s 6.23(2)(b) of the MAI Act.
68.	Pursuant to sub-s 3.40(1)(b) of the Act, the insurer is entitled to deduct the sum of $10,353.53 from the proposed settlement sum by way of recovery for weekly payments of statutory benefits paid to the claimant under Division 3.3.