Medical Panel ‘muddle’ resolved – Rosata decision set aside

The Court of Appeal’s decision effectively restored the status quo - a Medical Panel determination is not binding on a subsequent respondent who was not a party to the initial referral.

On 21 November 2023, the Court of Appeal handed down its widely awaited decision of Citywide Service Solutions Pty Ltd v Rosata^[1] (Rosata). The Court Appeal has set aside the County Court decision that the Medical Panel can only make one binding determination in a proceeding, the effect of which was that the first Medical Panel determination was binding on all respondents to the claim, even those who had not participated in the initial referral process.

The Court of Appeal’s decision effectively restored the status quo - a Medical Panel determination is not binding on a subsequent respondent who was not a party to the initial referral.

Background 

In Victoria, a claimant seeking pain and suffering damages must satisfy the significant injury threshold. As an initial step, claimants are required to serve potential respondents with a Certificate of Assessment and Prescribed Information Form pursuant to the Wrongs Act 1958 (Vic) (the Wrongs Act). Respondents can respond by referring a medical question in relation to the assessment to the Medical Panel for determination. Pursuant to s 28LZH of the Wrongs Act, the Medical Panel’s determination must be accepted by a Court.

After a Medical Panel Determination has been made and further respondents are joined to a proceeding, the potential for inconsistent determinations arise following a subsequent referral by the newly joined respondent. This is what happened in Rosata. The first Medical Panel determined Mr Rosata’s degree of impairment satisfied the threshold level prescribed by the Wrongs Act. The second Medical Panel found his level of impairment did not satisfy the significant injury threshold.

At first instance, Judge Fraatz held that the first Medical Panel Determination will be the relevant binding determination on all parties, even if a subsequent Medical Panel delivers a different determination on the same medical question. His Honor went further to say that Part VBA of the Wrongs Act imposes a threshold, and once that question has been determined by a Medical Panel, it was no longer necessary to serve another Certificate of Assessment. The decision raised significant questions for insurers. It meant that even if a Claimant’s level of impairment had been deemed to have met the significant injury threshold simply because their injuries had not stabilized, a subsequently joined respondent would be bound by that determination, notwithstanding any additional evidence which may have come to light since the initial determination. 

The question referred to the Court of Appeal in the matter of Samih Kabbout v Crown Melbourne Limited was heard alongside the Rosata appeal. In that matter the Medical Panel had determined Mr Kabbout’s level of impairment did not satisfy the significant injury threshold. Ikon Services were subsequently served with a Certificate of Assessment and failed to respond within the time period prescribed by the Wrongs Act. The failure by Ikon Services to respond resulted in a deemed acceptance of the Certificate. This meant that Mr Kabbout could claim general damages from Ikon but not Crown.

Decision of the Victorian Court of Appeal 

Two issues fell before the Court of Appeal for consideration, namely:

1. Whether there can be multiple Medical Panel Determinations or whether there can only be one determination (being the first in time); and
    
2. Whether a favorable Medical Panel Determination obtained by one respondent can be relied on by another respondent who has conceded the issue of significant injury.^[2]

Following a detailed examination of the provisions contained in Part VBA of the Wrongs Act, the Court of Appeal ruled in favor of Citywide, holding that a Medical Panel determination is only binding on the Court in respect of the referring respondent. In arriving at their decision, the Court of Appeal took into account the following considerations:

1. While Pt VBA does not specifically contain any provisions which state that the issue of significant injury can be resolved differently as between defendants to the proceeding, there are a number of provisions which contemplate this possibility.
    
2. The speedy resolution of the significant injury issue should not be at the expense of procedural fairness. A construction of Part VBA that there can only be one Medical Panel determination, results in a respondent being bound by a determination for which they have not been entitled to provide material or make submissions on, with the Court stating there is no basis for such construction of the Wrongs Act.
    
3. The provisions in Part VBA are not a hierarchy of gatekeepers. There is no foundation  in the text of Part VBA which permits or requires a Medical Panel determination (between a claimant and one respondent) to override the provisions contained in Part VBA as they apply to another respondent.
    
4. Section 28LE, when read in context of the other provisions in Part VBA, prohibits the recovery of pain and suffering damages unless the claimant has satisfied the requirements of the Part in relation to that respondent.
    
5. The requirement under s 28LT for a claimant to serve a Certificate of Assessment and Prescribed Information Form on each respondent, strongly suggested that Mr Rosata  was required to serve this material, notwithstanding that a Medical Panel had already issued a determination.

The Court acknowledged that their construction of the application of Part VBA may impact entitlements to contribution between defendants liable for the same damage (i.e. where a claimant is entitled to claim general damages against one respondent but not another). The Court however said that the text of Part VBA encompassed this possibility and that while additional costs and delays may occur, the Court was not permitted to construe those parts of the Act “in a way which makes them inapplicable because that is an easier outcome with which to deal.”^[3]

Implications

The effect of the Court of Appeal’s decision is that respondents who are served with a Certificate of Assessment and Prescribed Information are not bound by any previous Medical Panel determination made following a referral by a different respondent.

The decision provides clarity for respondents and ultimately places them in the position they were in prior to the County Court’s decision at first instance. Subsequent respondents will not have the benefit of an earlier favourable Medical Panel determination if they were not a party to the referral process. They will also have the opportunity to refer a question even if an earlier Medical Panel has determined the Claimant’s level of impairment meets the significant injury threshold.

The Medical Panel will now be required to deal with a back-log of referrals which were effectively on hold pending the outcome of the Rosata appeal. Although inconsistent Medical Panel Determinations may result, it is preferable that subsequent respondents not be bound by earlier determinations where they were not a referring party. 

[1] [2023] VSCA 281 

[2] At [82] 

[3] At [100]