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Accident Compensation Cases

Albert v Accident Compensation Insurance Corporation (DC, 08/09/00)

Judgment Text

RESERVED JUDGMENT OF JUDGE A W MIDDLETON 
Judge A W Middleton
The issue in this appeal is whether the respondent was correct in ceasing further entitlements of weekly compensation on the grounds that the appellant had a capacity for work. 
The background to the appeal is that the respondent accepted the appellant's claim that he had suffered an injury to his back in the course of his employment by Dunlops. His work involved the building of large truck and tractor tyres. The injury arose through prolonged bending, twisting, heavy lifting and pulling in a stooped position. Following the injury the appellant's employment ceased and he was granted earnings related compensation. In 1992 the appellant suffered a further injury to his back when he slipped and twisted. He was then referred to Mr A Simmonds, an Orthopaedic Surgeon, who arranged for a CAT scan which revealed a prolapsed disc. As a result the appellant underwent a laminectomy and discetomy operation. However, the operations did not provide relief from the symptoms and the appellant continued to receive earnings related compensation. 
As it was required to do, the respondent provided vocational rehabilitation aimed at finding a job which would be within the appellant's then physical capacity. The file indicates that at all times the appellant was keen to get back to work but did not want to undertake further training. 
The file discloses that between 1988 and January 1995 the appellant had part time work as a Bartender in a local hotel. This work varied at between 6 and 13 hours per week. In June 1996 the appellant was employed full time at the Saratoga Goat Farm where the work involved milking and caring for goats. In July 1996 the respondent referred the appellant to a course under the name of “Be Your Own Boss” with a view to self-employment in pest control but the appellant did not complete that course. 
Between November 1996 and December 1997 the appellant was employed as a Caretaker Assistant at a school. The school Principal considered that the appellant performed the task satisfactorily although the appellant's evidence is that he took the job against his will because his Case Manager, Mr J Inkster, had required him to do so. However, that job was terminated after the New Zealand Employment Service ceased to subsidise the position. The appellant then obtained work as a Welder with JRV Engineering which lasted approximately five months during which time the appellant worked between 18 and 28 hours per week. 
An Individual Rehabilitation Plan completed on 24 July 1996 had as its overall outcome “Sonny returned to the maximum level of independence that is achievable within physical capabilities.” 
In April 1998 the appellant's Case Manager, Mr Inkster, considered that the appellant had received sufficient rehabilitation assistance to make it suitable for the Work Capacity Assessment Procedure to be commenced. This recommendation was approved by the respondent's Masterton Branch Work Capacity Panel. On 4 June 1998 the appellant was interviewed by his Case Manager when the intention to assess his capacity to work was discussed. 
Mr Garstang has raised doubts that such a meeting took place because in the course of the review hearing the appellant gave evidence that he could not remember the meeting and Mr Inkster was unable to produce evidence that it had occurred. However, an examination of the file discloses a letter dated 28 May 1998 from Mr Inkster to the respondent requesting his attendance at a meeting at 2.00 pm on Thursday 4 June 1998. The letter advised the appellant that in the event he was unable to attend he should telephone Mr Inkster to arrange for another appointment time. 
Mr Inkster's statement was that the appellant had attended that meeting when he was provided with the Work Capacity Claimant Questionnaire (WCAP3) for completion. That document was completed by the appellant and it is undated, but it is on the file with the date stamp of 2 July 1998 so that I conclude that the meeting did take place and that the appellant was made aware of its purpose. 
The appellant's General Practitioner, Dr C G Cherry, was then requested to complete the WCAP4 form in which he stated that the appellant had a capacity for work which was limited to light work and that he must avoid repetitive bending and he emphasised the fact that he must avoid any lifting. 
The appellant was then referred to the Occupational Assessor, Mr M J Ward at the Sedgley Family Centre, for an occupational assessment. As a result of his examination of the appellant, Mr Ward listed the following job options as being within the appellant's training and experience: 
“Caretaker 
Bar Person 
Welder/Light Engineer 
Farm Worker 
Lube Bay Mechanic 
Supervisor 
Shingle Plant Operator 
Assembly Worker 
Storeman 
Motel Worker 
Shop Assistant ”
When that recommendation was received the respondent referred the appellant to Dr R Seemann, a Physician Rehabilitationist, for a medical assessment. In a report dated 21 September 1998 Dr Seemann stated that he had discussed with the appellant the job requirements of the job options identified by Mr Ward and had made a clinical examination of the appellant as a result of which he considered that the appellant was capable of working as a Supervisor and as a Caretaker. He also noted that the positions of Shop Assistant and Motel Worker would be within the appellant's capacity, subject to further treatment or rehabilitation intervention. He did not consider that the appellant had capacity to work 30 or more hours per week in the following positions: 
“Bar Person 
Welder/Light Engineer 
Farm Worker 
Lube Bay Mechanic 
Supervisor 
Shingle Plant Operator 
Assembly Worker 
Storeman ”
While Mr Garstang submitted that Dr Seemann had not specifically stated that the appellant could work for 30 hours or more per week as a Supervisor or Caretaker, his assessment was flawed. I do not accept that submission because the manner in which the report was prepared makes it clear, particularly in relation to the positions for which he considered the appellant unfit that Dr Seemann clearly identified that the issue was whether or not he was able to work for 30 hours or more per week. 
On 1 October 1998 Mr Inkster met with the appellant and gave him a letter informing him that as a result of the assessments he had a capacity for work and that further weekly compensation would cease at the expiration of three months. 
The appellant then provided the respondent with a copy of a letter from his Orthopaedic Surgeon, Mr Simmonds dated 11 November 1998, in which he stated: 
“I will see him again in a couple of weeks or thereabouts once the xrays are through but it is my opinion that he is not fit for doing heavy manual work and probably hasn't been for many years. If light work is available, provided he uses the brace I am sure he will be up to doing that but so far the jobs that he has been doing have not been light and have been unsatisfactory. 
In that regard I concur with Dr Cherry's concerns about his fitness for work. I think it has to be very clearly stated that this man has got limitations in his lumbar spine and should not be involved in heavy manual work, otherwise he will simply go back onto Accident Compensation. I do note in Dr Seeman's [sic] report that there is a general concurrence with his views but in respect of caretaker I am afraid that there are some parts of that job which involve rather heavier work than is desirable including mowing lawns and chopping wood which has meant that during the course of the time when he was involved he was unable to cope with this. I therefore think that this is perhaps less suitable than has been assessed by Dr Seeman [sic]. In other respects I think the report was fair and useful. ”
On receipt of the x-ray reports, Mr Seemann issued a further letter of 25 November 1998 in which he stated: 
“In essence this man is severely back-injured and I don't believe is capable of doing much in the way of work and I think it important that this be clearly understood by ACC. Further deterioration should certainly be associated with a reassessment by a specialised spinal surgeon such as Chris Hoffman or Sud Rao and I will be happy to facilitate this should the desire or deterioration take place. ”
The respondent then referred Mr Simmonds' reports to Dr Seemann for his comment. In a letter dated 4 December 1998 Dr Seemann noted: 
“As you quite rightly comment, the report from Mr Simmonds is orthopaedically orientated with more emphasis on possible deterioration in his x-rays than on Mr Albert's functional capacity. 
The point I would make is that he had one whole year of work experience as a caretaker. I would have expected him to fail very early on in the piece if this job were indeed too physically heavy for him. Mr Albert did not describe a deterioration in his pain to me during that year's experience, but it is clear that the light engineering job that he has subsequently done did cause exacerbation of pain. Mr Albert describes a significant amount of bending and lifting that was required in that occupation. I would have thought it unlikely the trial as an engineer would succeed, because of the back movement required. 
Thank you for sending me the copy of Mr Simmonds' letter outlining the x-ray findings, which confirm a significant degree of degenerative change at several levels in the lumbar spine. This is clearly the cause of his back pain. 
You will be aware from your dealings with clients with back problems that a significant number with chronic low back pain have no discernable [sic] abnormalities with x-ray, CT or MRI scan. My experience is also that there are many people in the community with significant degenerative changes on x-ray, who appear to experience little back pain. 
The x-ray appearances are therefore no guide to the amount of pain an individual is experiencing. In Mr Albert's case they merely point to the fact that he should avoid occupations with a significant amount of lifting and bending. 
As a rehabilitation specialist, I am personally disappointed in Mr Simmonds' comments that ‘this man is severely back-injured and I don't believe is capable of doing much in the way of work’. This merely serves to underline disability rather than ability. 
Unfortunately the situation has arisen where significant antagonism between Mr Albert, his medical advisor and ACC has occurred. This will reduce the likely success of a rehabilitation programme. If my finding of capacity for work is turned down on appeal, then my suggestion with regard to further rehabilitation interventions is as follows: 
1.
That he be reviewed by a vocational therapist and potential forms of work or training (acceptable to him) be identified, with particular regard to the stated opinion of Mr Simmonds that he is fit only for very light work. To me this would imply office or supervisory work. 
2.
That one or more work trials of appropriate duration be set up, or that appropriate training be given. I would normally accept fairly brief work trials, but in Mr Albert's case I would suggest trials of several months duration, to ensure that he is coping. 
3.
That work capacity assessment be reassessed at the end of that time. 
4.
I would specifically not recommend ‘hands-on’ physio or other treatment. An aerobics fitness programme (swimming or exercycle or walking) is appropriate and should be encouraged rather than forced on Mr Albert. 
With regard to the issue of working as a supervisor, Mr Albert and I had some discussion around that and it was my impression that he had in fact had experience of supervising other workers as a leading hand. ”
After the various medical reports were considered by the respondent's Branch Medical Officer and the Team Case Manager, the respondent advised the appellant's Solicitors that it confirmed its original decision to cease further payments of weekly compensation. The appellant applied for a review of that decision. 
In the course of the review hearing the appellant gave evidence that he had undertaken the job of Caretaker at the school, notwithstanding that it caused him problems. He said that in spite of complaints to Mr Inkster about his problems with the job he was told he was required to carry on with it. He also stated that it had been made plain to him by Mr Inkster that it was the respondent's intention to get him “off the books”
It is quite clear from the evidence at that review hearing that there was antagonism between the appellant and his Case Manager. 
The appellant was represented by Mr Garstang at the review hearing where he raised the issue that the appellant did not receive natural justice in the handling of his case by the respondent and that the whole issue was overshadowed especially from politics. Mr Garstang also submitted to the Review Officer that the medical evidence especially from those who had been closely associated with the appellant demonstrated that at the very most he could do only light work and there was dispute as to whether he was fit for the position as a Caretaker. He submitted also that Dr Seemann could not have made a proper assessment of the appellant's ability to do that work because he did not have a job description. 
The Review Officer considered that the Work Capacity Assessment Procedure had been properly carried out and that on the evidence before him there were no breaches of natural justice. It is against that decision which the appellant now appeals. 
At the hearing of the appeal, Mr Garstang raised similar submissions to those which he raised before the Review Officer. In addition he was given leave to produce a copy of a document obtained under the Official Information Act, being a paper prepared by the respondent for the then Minister for Accident Insurance, the Honourable M McCully. The document is dated 16 November 1998. Mr Garstang submitted that this document supported his submission that there was bias on the part of the respondent in requiring the appellant to undergo the Work Capacity Assessment Procedure. Mr Garstang also raised issues as to the reliability of the transcript of evidence taken at the review hearing. He said the Review Officer had given permission to have a tape recorder available at the review hearing as a result of which he had a record of the proceedings which, in some cases, demonstrated that there were omissions and mistakes in the transcript which was provided to the Court. I accepted Mr Garstang's offer to have his tape transcribed and for him to note there on the differences in his transcript from that provided to the Court. The transcript of the record taken by Mr Garstang together with the copy of the Court transcript as amended by Mr Garstang is now part of the file. 
The evidence demonstrates that there has certainly been some hostility between the appellant and his Case Manager. The evidence showed that while the appellant had worked as a Caretaker at the school for some twelve months, he did so in spite of pain and problems in not being able to do part of the work only because complaints made to his Case Manager were rejected out of hand. 
As I have already explained I consider that the Work Capacity Assessment Procedure was correctly commenced by the meeting of 4 June 1998 and thereafter proceeded in accordance with the procedure outlined in the “final version” issued in October 1997 as subsequently gazetted. The result of the assessment was that the appellant has capacity to work for 30 hours or more as a Supervisor or as a Caretaker. 
While Mr Simmonds raised some doubts regarding the serious nature of the appellant's back injury, he did concede that basically Dr Seemann's report was “fair and useful”. I take it from Dr Seemann's report that he considers that provided the appellant is not required to stand for long periods or undertake heavy lifting, he is physically capable of doing the work of a Caretaker and has already demonstrated this. He also considered that having demonstrated that he had previous experience as a Supervisor this job would also be within his physical capacity. 
As the Court has held in numerous decisions, provided the correct procedure has been followed then the respondent and the Court must accept the assessments made by the duly qualified and appointed assessors. While Mr Simmonds has raised some doubts as to the appellant's capacity from an orthopaedic perspective, the overriding requirement of the legislation is that both assessors must have certain approved qualifications which places them in a superior position to carry out the requirements of the legislation. It is for this reason that the Court has been constrained from attempting to go behind the assessments. 
One problem which does concern me and that is a matter raised by Mr Garstang concerning the question of bias. The document dated 16 November 1998 prepared by the respondent for the Minister is headed “Tail Management”. It defines the “tail” as being claimants who have been receiving weekly compensation for more than twelve months. Under the heading of “Why does the residual tail exist?” the document states: 
“Until late 1997 essentially ACC's ability to exit claimants from the scheme was restricted to pressure and claimant agreement. The introduction of the Work Capacity assessment process has provided a vehicle to change that. ”
Under the heading “Residual Tail Makeup” the following statements are made: 
“Because in the past expectations have not been clearly set with claimants, and employers, the tail now includes people whose expectation is that they will receive ACC payments for extended periods. 
These include people who, following an injury, have developed a ‘victim mindset’ which is difficult for them to shake. In addition, we find there are people who have adjusted their lives to depend on ACC payments, where the gap between income support and weekly compensation is an incentive, and also those who see ACC as part of the welfare system. ”
Under the heading of “actions”, the document then states: 
1)
Objectives 
Branch KPI's are heavily weighted towards exit rate against target, the exit:entry ratio and duration on the scheme These objectives are constantly being reinforced at all levels in the organisation by senior management. 
2)
Branch structure 
Within each branch, Case and Claims Managers belong to one of four teams 
a)
New Claims 
This team manages claims that are expected to exit quickly — within 8 weeks. It handles about 75% of claims coming into the branch and has performance measures of duration, exit rate and payment timeliness. 
b)
Focused Rehabilitation 
This team manages the other 25% of new claims and these are expected to remain longer than 8 weeks on the scheme. The performance of this team is measured by duration, exit rate and payment timeliness. 
c)
Intensive Management 
This team manages those claims that are over a year old. Performance is measured on exit rate. 
d)
Serious Injury 
This team manages those claimants likely to be on the scheme for a long time, frequently a lifetime. Performance measures are rehabilitation and file quality which are peer reviewed and checked. 
In all of the above areas, comparative costs are measured in addition to the KPI's outlined. 
This team structure allows for clear objectives and measurements to be in place for staff which impacts on their remuneration. (my emphasis) 
The transfer of files from one team to the next as they age also provides an inbuilt audit check. 
3)
Reporting 
Branches now receive a fortnightly branch report on a 4-weekly stock and flow report. 
In addition, they are now receiving quarterly reports showing branch rankings, serious injury and payment accuracy reports. 
There is a strong emphasis in all these reports on tail exit rates. (my emphasis) 
4)
Work Capacity 
This assessment process was first available in November 1997 and the Corporation's approach was to start carefully and develop from there. Over the last three months, the number of claimants entering and moving through the process has increased significantly. ”
(my emphasis)
Later in the document it refers to the steps being taken and states: 
“a)
A major initiative is now being rolled out through the branches which will significantly increase the number of claimants entering the Work Capacity Process. 
b)
The implementation of normative tables early in 1999 will reduce entries to the tail. 
c)
The Referred Providers programme involves the obtaining of second opinions from appropriate providers where medical certificates are being unreasonable [sic] extended. (my emphasis) This will impact both entries and exits from the tail. 
d)
The education of the medical profession and employers in respect of brain injured claimants and the process of their management within ACC is undergoing significant change. ”
I have referred to this document because in a number of appeals in relation to capacity for work, submissions have been made to the Court that the respondent is anxious to reduce the “tail” at the expense of claimants. In a number of appeals I have indicated my concern that while the Court has to accept the assessments made by the assessors, provided the proper procedure has been followed, this can often result in what I consider to be an injustice to the claimant. I consider that the concept of the Work Capacity Assessment Procedure is in itself a derogation from the original concept of the accident compensation legislation. That concept was that an injured worker provided he or she continues to suffer from the effects of the personal injury was entitled to weekly compensation assessed at the rate of 80% of pre-accident earnings. In the event that the claimant obtained part time work, make-up weekly earnings was paid to bring up the total entitlement to 80% of pre-accident earnings. The Work Capacity Assessment Procedure diminishes the entitlements by ascribing to the “Capacity to Work” the limitation that if a claimant is able to work for 30 hours or more rather than the normal 40 hours per week then that requires disentitlement notwithstanding that the claimant may continue to suffer from the effects of the accident. This clearly amounts to a scheme for removal of what originally constituted legitimate entitlements. 
While I have had similar submissions made to me in the past, the production of this document is the first time that the Court has had some information as to what lies behind the scheme. 
In this appeal I am satisfied that there is insufficient evidence on which the Court could conclude that there has been bias either on the part of the respondent's staff or the assessors. However, the memorandum submitted by Mr Garstang does provide a hint that there may be some truth in the submissions which I have heard both in this case and in a number of others. 
For example: 
1.
What is meant when it is said that the “team structure allows for clear objectives and measurements to be in place for staff which impacts on their remuneration?” Does that mean that by creating a certain number of “exits” staff will receive a bonus? That would appear to be the implication. 
2.
What is meant by the statement “The Referred Providers programme involves the obtaining of second opinions from appropriate providers where medical certificates are being unreasonable [sic] extended?” Does that mean that a direction to a “tame” provider will produce the required report to enable an “exit” to be made? It certainly has that appearance and it would follow that the “appropriate provider” would be suitably recompensed. 
I have felt obliged to mention these matters because they have been expressly raised in this appeal and in many others. I have been aware of grave concern among a number of counsel that there have been suspicions of bias which have resulted in referral for work capacity assessment when claimants have really not demonstrated an ability to work a 30 hour week because of ongoing symptoms as a result of the personal injury for which they have cover. 
I hope that the proposals outlined in the document of 6 October 1999 are not being implemented in the manner in which I have interpreted them but because of the number of times this issue has been raised before me I have my doubts. These doubts have not been assisted by a recent public statement from the respondent claiming “success” in the reduction of the number of longstanding claimants. 
As I have already said, the Court must accept the assessments made by the duly qualified assessors but I have to do so with reluctance. The appropriate procedures were correctly carried out and the result recognised. 
The appeal is dismissed. 

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