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Accident Compensation Cases

Legal Aid Review Panel Decision No 199/07 (LARP, 11/05/07)

Judgment Text

Convenor GL Melvin
Two applicants for legal aid (the “Applicants”) have applied for a review of the decision of the Legal Services Agency (the “Agency”) dated 6 March 2007. By that decision the Agency confirmed its decision of 19 January 2007 to refuse civil legal aid. 
Grounds of the Application 
A decision may be reviewed on the grounds that it is either manifestly unreasonable or wrong in law. 
The Applicants submit the Agency's decision was both manifestly unreasonable and wrong in law. 
The Facts 
The Applicants both suffered post traumatic stress disorder as a result of witnessing violence to their mother over a sustained period during their childhood. They claimed entitlement to cover from the Accident Compensation Corporation (“ACC”), which was declined. They sought legal aid to undertake a review of the decision by ACC. 
The Agency referred the matter to a specialist adviser, who recommended that aid be declined on the ground that there were insufficient prospects of success. On 19 January 2007, the Agency advised the Applicants that aid had been refused under section 9(4)(d)(i) of the Legal Services Act 2000 (the “Act”). 
The Agency stated that the definition of accident in the Injury Prevention, Rehabilitation and Compensation Act 2001 (the “ACC legislation”) required the application of a physical force or resistance, and that the Applicants were not entitled to cover as spectator victims. 
On 5 February 2007, the Applicants sought reconsideration by the Agency, pointing out that they relied on new evidence demonstrating that post-traumatic stress disorder results from physical injury to the brain. They also claimed that spectator victims were not excluded under the accident compensation legislation. 
On 6 March 2007, the Agency advised that it had reconsidered the decision and reaffirmed its decision that aid would be declined. The Applicants applied to the Panel to review the Agency's decision. 
The Applicants' Submissions 
The Applicants submit: 
The Agency's decision was manifestly unreasonable because it prevents the ACC legislation being interpreted in a purposive manner to assist injured claimants. 
The Agency's decision was wrong in law because it takes a limited view of the ACC legislation. 
The interpretation of the ACC legislation contended for by the Applicants should be tested in the courts, otherwise the law would never be able to develop. 
The Agency's Submissions 
The Agency submits: 
It is not tasked with funding important test cases. It has to balance access to justice with public accountability. 
It assessed prospects of success based on current legislation and case law. The decision to refuse aid could not be said to be unreasonable, irrational or logically flawed. 
It made an informed decision on prospects of success in line with the law and on the information before it. 
Response Submissions 
In response, the Applicants submit: 
The Agency has misinterpreted the Act. 
There is an interpretation of the legislation which would allow the claim. 
The Issue 
The issue before the Panel is whether the Agency's decision to refuse aid was manifestly unreasonable or wrong in law. 
The Law 
A decision is “manifestly unreasonable” if it is shown “clearly and unmistakably” that the Agency's decision “went beyond what was reasonable or was irrational or logically flawed” (Legal Services Agency v Fainu (2002) 17 PRNZ 433). 
A decision may be wrong in law for a variety of reasons. It may be wrong in law, for example, if it derives from an inaccurate application or interpretation of a statute, or is wrong in principle. It may be wrong in law if a decision-maker has failed to take into account some relevant matter or takes into account some irrelevant matter, or if the decision depends on findings which are unsupported by the evidence (Legal Services Agency v Fainu (supra)). 
The approach to prospects of success was considered in Timmins v Legal Aid Review Panel [2004] 1 NZLR 708. Wild J proposed the following test (at paragraph 35): 
“What, if any, legal action would the applicant (assuming they were a reasonable individual) take in the circumstances if paying their own legal costs? ”
The ACC legislation provides that a person has cover for personal injury caused by accident to the person: section 20(2)(a). 
Personal injury is defined in section 26(1) of the ACC legislation: 
“Personal injury means— 
the death of a person; or 
physical injuries suffered by a person, including, for example, a strain or a sprain; or 
mental injury suffered by a person because of physical injuries suffered by the person; …  ”
Accident is defined in section 25(1) of the ACC legislation: 
“Accident means any of the following kinds of occurrences: 
a specific event or a series of events, other than a gradual process, that— 
involves the application of a force (including gravity), or resistance, external to the human body; or 
involves the sudden movement of the body to avoid a force (including gravity), or resistance, external to the body; or 
involves a twisting movement of the body: …  ”
In Queenstown Lakes District Council v Palmer [1999] 1 NZLR 549 (CA), the Court of Appeal held that a spectator victim was not covered by the accident compensation legislation because he had not suffered the accident. 
The Applicants have acknowledged that their case would be a test case on the interpretation of the ACC legislation. For the Applicants to succeed, the ACC legislation would have to be interpreted as providing cover to one person as a result of an accidental injury to another person. 
The Agency's specialist adviser took the view that the ACC legislation requires the application of a force or resistance to the person claiming compensation. As such, the Applicants were seen to be clearly ineligible, and their prospects of success insufficient to warrant the granting of aid. 
That is the standard interpretation of the ACC legislation. It requires an accident to the person claiming compensation, and that accident must involve physical injury as a result of the application of a force or resistance. An interpretation of the ACC legislation to allow claims by spectator victims would be directly in conflict with the reasoning of the Court of Appeal in Palmer (supra). Although that case was decided under the Accident Rehabilitation and Compensation Insurance Act 1992, the reasoning of the Court applies equally to the ACC legislation. 
The Agency's decision therefore cannot be described as manifestly unreasonable. 
In coming to the conclusion that the prospects of success are insufficient, the Agency has followed the advice of a specialist adviser. Although it has not expressly applied the test laid down in Timmins (supra), it appears to have taken the view that the prospects of success were so small that a self-funding person would not commit his or her own funds to the litigation. 
The Agency has therefore followed a proper process in reaching its decision. It cannot be said to have misinterpreted the ACC legislation, as it adopted the obvious interpretation in accordance with specialist advice. There was no error of law in the Agency's decision. 
For the reasons set out above, the Agency's decision is confirmed. 

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