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Accident Compensation Cases

Reynolds v Accident Compensation Corporation (DC, 17/01/01)

Judgment Text

Judge P F Barber
This matter has much similarity to the costs issues covered in my ruling in Daly (No. 6/2001 — AI 233/99) also issued today. Generally, the submissions which counsel made with regard to Daly have been provided in this case together with supplementary submissions pertaining to this appellant's particular circumstances. Here again, as in Daly, the substantive matter of the appeal has been settled between the parties in favour of the appellant, but the parties have been unable to agree upon an appropriate contribution towards the appellant's legal costs. In this case also, the respondent offered $600 as contribution towards the appellant's costs. 
In this case also Mr Hlavac prepared a very helpful summation of the background which I now set out: 
On 26 February 1999 the Appellant suffered personal injury by accident. In his original claim form dated 2 March 1993 the Appellant claimed to have sprained the medial ligaments of his right knee when slipping on a wet floor. 
The Appellant subsequently sought and was granted entitlements in relation to that injury in the way of home help assistance and independence allowance payments. 
In November 1999, following a review of the Appellant's claim and on the basis of medical opinion obtained from Mr Theis, the Respondent withdrew the Appellant's ongoing entitlements on the basis that his condition was now no longer wholly or substantially caused by his accident for which cover had been granted in February 1993. 
On 11 February 2000 the Appellant lodged an application for review which was heard on 8 August 2000. At review, evidence was adduced relating to ongoing problems which the Appellant had with his back. The argument advanced on behalf of the Appellant was that at the time of the accident on 26 February 1993 the Appellant had also suffered injury to his back as well as to his knee and accordingly that he was entitled to cover and continuing entitlements in relation to that back injury. 
The decision of the Review Officer was that because the Appellant's claim had only ever been made in relation to his knee, issues relating to the Appellant's back could not be considered and accordingly because there was no evidence that the Appellant was still suffering the effect of the injury to his knee, his application for review must be dismissed. 
The Appellant subsequently filed a Notice of Appeal on 14 September 2000. 
On 30 October 2000 Mr Sara on behalf of the Appellant filed Practice Note submissions in relation to the Appeal. In his submissions he referred to a series of correspondence between himself and the Respondent between March and August 2000 leading up to the Review Hearing on 8 August 2000. In that correspondence Mr Sara queried whether, even if the Appellant was not entitled to continued entitlements in relation to his back injury, he was still entitled to home help assistance and independence payments as a result of other injuries to his neck, back, leg and shoulder for which cover had been accepted by the Corporation. 
In light of those arguments and following a further review of the file counsel wrote to Mr Sara on 8 November 2000 advising that the Respondent was prepared to concede that, at the time of his accident on 26 February 1993 when he injured his knee, the Appellant also suffered an injury to his back. Accordingly, the Respondent was prepared to accept that the Appellant has cover for an injury to his back on 26 February 1993. 
Mr Sara subsequently advised that the Appellant sought costs of $800.00. The Respondent subsequently offered the sum of $600.00. That offer was not accepted by the Appellant. ”
The general approach of Mr Sara for the appellant is to note that this Court has held in a number of accident compensation appeal cases that, as a matter of principle, an appellant should not be out of pocket in order to secure his or her proper entitlement and that the benefit of any successful outcome following an appeal should not be destroyed because of the legal costs involved to achieve that result — I respectfully query the extent of that approach. 
Mr Sara submitted that, in this case, the respondent's decision was plainly wrong from the beginning, as was the Reviewer's decision. He submitted that the respondent ought to have settled the appeal much sooner in view of the signal lack of merit of the stance of the Corporation and that the Reviewer completely ignored counsel's submissions and disposed of the Review by declining jurisdiction. Mr Sara noted the concession of counsel for the respondent that the submissions prepared for this appeal were largely based on those prepared for the Review Hearing. Mr Sara advised that his total time spent on this case from the date of the primary decision is 20 hours to fix his fees at $3,800 i.e. a charge-out rate of $190 per hour which is modest. The total amount of Mr Sara's time spent on preparation of submissions for the appellant was 3.5 hours including 2.5 hours for submissions prepared for the Review Hearing which, apparently, were ignored. 
Mr Hlavac submitted for the respondent that it is not a matter of principle that an ACC claimant should not be out of pocket to secure his or her proper entitlement because of legal costs. He submitted that such an approach is inconsistent with the general rule relating to costs in the District Court that an unsuccessful party should make a reasonable contribution towards the costs reasonably and properly incurred by a successful party. He submitted that solicitor/client costs will only be awarded in very rare situations. No-one would disagree with all that. 
Mr Hlavac referred to the composition of the $3,800 solicitor/client costs referred to above by Mr Sara. He submitted that I should focus on the content of those costs which relate to this appeal and not the total costs of pursuing the claim. I would have thought that there would be such an inter-relationship between the costs of the appeal and the costs of pursuing the claim, that that would not be a valid approach except for the factor of possible recovery of some costs at Review Hearing level. 
Mr Hlavac submitted that it would appear that the majority of the work undertaken by the appellant's counsel related to preparation for and conducting the Review Hearing. He pointed out that the issue of costs on a Review Hearing is specifically provided for under s 151(3) of the Accident Insurance Act 1998 and the Accident Insurance (Review Costs and Appeals) Regulations 1999. The latter set out a scale of costs which, pursuant to Regulation 3(2), are the maximum amounts which can be awarded in relation to a Review Hearing and include, inter alia, preparation and lodging of application for review $75, other preparation of case for review $145, and appearance at hearing for applicant $300. Mr Hlavac also stated: 
As has been recognised by this Court in Anderson (133/00) and Bennett (168/00), Regulation 3(2) sets out the maximum amounts which can be awarded for each of the steps provided for and accordingly ‘any action by the Corporation to make a payment of a sum in excess of the amount contained in the Regulations would be ultra vires its powers under the Act and there is therefore no legal authority whatsoever for the Corporation to make payment of any further sum towards the Appellant's legal costs within the framework of the Accident Insurance Act 1998 or its predecessor or the regulations made under either of those two Acts.’ (Anderson, page 3). ”
Although the appellant was unsuccessful in the Review Hearing with regard to this particular case, he was awarded costs of $315 together with the cost of obtaining Dr Burry's report. Mr Hlavac submitted that because the majority of the costs incurred by the appellant relate to preparation for and appearance at the Review Hearing, and because the appellant has already been awarded costs in accordance with the Regulations in relation to that work, there is no ability for me now to take any of that work into account in fixing costs for the purpose of this appeal. He also submitted that, in terms of the submissions of Mr Sara, the only time identified as relating specifically to this appeal is the one hour utilised in preparing the submissions for the appeal. Mr Hlavac also submitted that the issues involved in this appeal were not complex and that this is not a case where the respondent can be said to have acted unreasonably in initially revoking entitlements. 
In final reply, Mr Sara pointed out that the appellant had suffered a number of injuries prior to 26 February 1999 and that prompted Mr Sara (as counsel) to remonstrate with the respondent with a view to having the appellant's entitlements restored on the strength of these other claims. He submits that the respondent seemed to have closed its mind to these remonstrations for fiscal reasons so that the Review and Appeal process continued unnecessarily. He asserted that the respondent's decision to settle this appeal did not arise out of any new evidence supplied by the appellant. Of course, Mr Sara accepted that the quantum of Review costs cannot be exceeded by a Reviewer, but he submitted that my discretion is not fettered in any way and that I should have regard to the total lack of merit in the respondent's initial decision and (in his submission) in the Reviewer's decision which confirmed it. 
Mr Sara submitted that the amount of time spent in preparing the submissions for the appeal itself is but one consideration, and that the appellant has been put to unnecessary expense to restore his entitlements and this fact should be reflected in the quantum of costs awarded by this Court. 
It seems to be contemplated by both counsel that my decision in Daly will simply be applied to this case. Certainly, I adopt and incorporate into this ruling my reasoning in Daly. However, the essence of that is that I must formulate a figure for costs which is fair and reasonable in all the particular circumstances of the case; and of course, the circumstances of this case are not identical to those in Daly
It is a valid point that legal work for a Review Hearing is, prima facie, compensated for under the said Regulations but, of course, much of that work will have been undertaken with an eye to an appeal, if necessary, and will need to be restudied for an appeal to this Court and, if not, that would reflect the skill of counsel in being able to quickly reassimilate his or her earlier preparatory work, and that skill should be reflected in charge-out rates. 
In my view, I need to take a fairly broad brush approach to what is fair and just in all the circumstances, but endeavour to be conscious of proper factors such as those raised by counsel in this case. 
When I stand back and look at this particular situation overall, I think a fair figure for the respondent's contribution to the legal costs of this appellant is $1,100 plus any disbursements incurred by the appellant. 

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