Denese Woods v Northern Territory of Australia [2023] NTWHC 08

Compensation for permanent impairment Northern Territory Return to Work Act

(The discussion below is for educational and information purposes only. It does not constitute legal advice. Professional legal advice should be sought before taking or not taking any action based on the below)

1. On 2 Nov 2023, in the case of Denese Woods, the Darwin Work Health Court (WHC) provided a written decision in relation to an aspect of permanent impairment compensation.
2. This is the latest Court decision on permanent impairment. There are other decisions, including:

• The NT Court of Appeal’s decision in Pengilly (you can claim additional permanent impairment compensation if there is a deterioration in the medical condition).
• Several Work Health Court decisions stemming to 1996, including the decision in Pointon (until compensability is resolved (ie in the case of a dispute of liability), it is normally premature to assess impairment).
• The NT Supreme Court’s decision in Kaefer Integrated Services Pty Ltd v Spohn, in the right circumstances, if the Panel explicitly leaves the door open to consider additional data, then the Panel can assess impairment in stages and revise its report (upwards or downwards).

3. Permanent Impairment compensation is one of the three primary benefits available to claimants under the Northern Territory Return to Work Act (RTWA) (the other two being weekly compensation and medical / rehabilitation costs).
4. Permanent impairment compensation is also important for the duration limits in the legislation (i.e., the duration limits do not apply where impairment is assessed at 15% or more WPI (Whole Person Impairment)).
5. A doctor assesses bodily impairment, and it must be done in accordance with certain medical guidelines (Guides).

 

 

6. The NT WorkSafe (NTWS) Guidelines for the evaluation of permanent impairment apply the methodology per the American Medical Association’s Guides to the Evaluation of Permanent Impairment, Fifth Edition (AMA5).
   • However, paragraph 1.11 of the NTWS Guides states “the AMA5 chapter on Mental and Behavioural Disorders (Chapter 14) is omitted. The Guidelines contain a substitute chapter on the assessment of psychiatric and psychological disorders (Chapter 11) which was written by a group of Australian psychiatrists.”
7. When the doctor’s report setting out the WPI is provided to the claimant or employer, anyone aggrieved can apply to NT WorkSafe (within a strict period of time) to refer it for “reassessment” by a panel of three doctors (one of whom must have specialist knowledge about the particular medical condition) (Panel).
8. The legislation states the Panel’s WPI assessment is “taken” to be the assessment of permanent impairment and it is “not subject to review”.
9. In Denese Woods, the claimant claimed compensation for work related mental injury in (i) 2017 and (ii) 2020. Two distinct incidents on separate occasions at different locations but for the same employer.
   • The first injury (2017) related to the Claimant’s perception of threatened violence and risk to her safety from students at Katherine High School.
   • The second injury (2020) related to the Claimant’s perception of threatened violence and risk to her safety from students at Palmerston College and additional perceptions of bullying and lack of peer support.
   • The Employer accepted liability for the 2017 mental injury. A doctor assessed permanent impairment for this injury at 11% WPI. That assessment was referred to a Panel. The Panel revised this to 5% WPI. The Employer paid the Claimant the amount of compensation per the table (Table) in s 71(3) RTWA (ie 2% of the benefit).
   • The Employer initially disputed liability for the 2020 mental injury. A doctor assessed impairment for this injury at 11% WPI. The Panel evaluated it at 12%. There was a problem with this assessment as the 2020 injury was disputed at the time of assessment (so any assessment had to wait until the liability question was resolved).
   • Later, the Employer accepted the claim for the 2020 injury [1]. The doctor prepared another report and assessed WPI for the 2020 injury at 13%. The Employer paid the amount of compensation per the Table (ie 8% of the benefit).

10. The Denese Woods case was mostly about whether the impairment assessor (i) can combine the impairments or (ii) is limited to assessing them independently.
11. This was important in the Denese Woods matter because WPI for the 2017 and 2020 mental injuries, combined, was 22%. At this level, not only is the compensation payable significantly greater, but the duration limits would also not apply.
12. The Claimant argued because both injuries occurred during the Claimant’s employment with the same Employer, you should combine the two impairment assessments.
    • The Judge disagreed and decided on a reading of the relevant sections of the Guides the (i) WPI assessment for the 2017 injury and (ii) WPI assessment for the 2020 injury, should not be combined.
    • The Judge relied on paragraphs 1.6.3, 1.7 and 1.28 of the Guides. These paragraphs are set out below:

1.6	The following is a basic summary of some key principles of permanent impairment assessments:
	1.6.3	In calculating the final level of impairment, the assessor needs to clarify the degree of impairment that results from the compensable injury/condition. Any deductions for pre-existing injuries/conditions are to be clearly identified in the report and calculated. If, in an unusual situation, a related injury/condition has not previously been identified, an assessor should record the nature of any previously unidentified injury/condition in their report and specify the causal connection to the relevant compensable injury or medical condition.
1.17	Impairments arising from the same injury are to be assessed together. Impairments that result from more than one injury arising out of the same incident are to be assessed together to calculate the degree of permanent impairment of the claimant.
1.28	In assessing the degree of permanent impairment resulting from the compensable injury/condition, the assessor is to indicate the degree of impairment due to any previous injury, pre-existing condition or abnormality. This proportion is known as “the deductible proportion” and should be deducted from the degree of permanent impairment determined by the assessor.
11.10	To measure the impairment caused by a work-related injury or incident, the psychiatrist must measure the proportion of WPI due to a pre-existing condition. Pre-existing impairment is calculated using the same method for calculating current impairment level. The assessing psychiatrist uses all available information to rate the injured worker’s pre-injury level of functioning in each of the areas of function. The percentage impairment is calculated using the aggregate score and median class score using the conversion table below. The injured worker’s current level of impairment is then assessed, and the pre-existing impairment level (%) is then subtracted from their current level to obtain the percentage of permanent impairment directly attributable to the work-related injury. If the percentage of pre-existing impairment cannot be assessed, the deduction is 1/10th of the assessed WPI.

13. The Claimant argued the reference to “pre-existing injuries/condition” in clause 1.6.3 was to “pre-existing non-compensable impairment” (emphasis added).
    • The Judge disagreed and considered the first injury (in 2017), albeit compensable, was a “pre-existing” injury to the second injury (in 2020).
    • At paragraph 51 of the WHC’s reasons, the Judge said in part, based on a reading of the Guides, the Judge considered “all impairments that were not caused by the “relevant compensable injury” are to be deducted when determining the level of permanent impairment that was caused by that compensable injury”.
14. AMA5 sets out a “Combined Values Chart” to “derive a % WPI that arises from multiple impairments” (see clause 1.18 of the NTWS Guides).
    • The doctor in Denese Woods prepared a report identifying the combined WPI of the two injuries at 22%, of which 13% was for the second injury (in 2020).
    • At paragraph 36 of the reasons, the Judge extrapolated “through simple arithmetic” the “permanent impairment attributable to the First Injury, was 9% WPI” ie 22% minus 13% = 9%.
    • According to AMA5, if the combined assessment was 22% WPI, and one injury was responsible for 13%, then, applying the AMA5 Combined Values Chart, the other would have been 10% WPI (and not 9%).
15. In Denese Woods, the Judge mentioned “notwithstanding the assessment of 5% the Worker’s WPI, pursuant to section 71(3) of the Act, the compensation payable to the Worker is reduced to 2%” (emphasis added).
    • The methodology to determine the amount of compensation to pay (for the assessed % WPI) is a sliding scale set out in s 71(3) RTWA.
    • Section 71(3) sets out a table where “column 1” is the “degree [in % terms] of permanent impairment” and the percentage of compensation payable (ie % of 208 x AWE) is set out in the corresponding “column 2”.
    • There is a minimum of 5% WPI and the table sets out a sliding scale of 2% – 12% of the compensation for WPI assessment between 5% – 14%.
16. The NTWS Guides are based on a template guide used by workers compensation insurers or entities in other parts of Australia. It is unclear whether the parties referred to any relevant case law in other jurisdictions on this topic.
17. It is important to note the actual application of the guidelines can be complex and requires a thorough understanding of both the Guides and the specifics of psychological injuries.