1. New Common Law Lodgements and Benefit Delivery Scheme Overview

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1 Legal Liaison Group Information Paper 10 April 2015 Key Issues Update Context and purpose To provide an update to LLG on litigation and related issues. Discussion/Issues 1. New Common Law Lodgements and Benefit Delivery Scheme Overview New Applications WorkSafe have received 2737 (an average of 228 new common law lodgements per month) for the 12 months to 31 March Of these applications, 4% are deemed (IB30+) and 25.8% are pain and suffering (PS) only. The following chart shows the lodgements to 31 March Page 1

2 Pre-Litigated Serious Injury Determination WorkSafe and panel firm focus has continued to be on the quality of initial decision making. The proportion of serious injury decisions resolved within 120 days is 62% (including deemed). On average, around 400 matters per quarter have the serious injury decision finalised within 120 days. However the last quarter has seen big increase in the serious injury decision finalised within 120 days because of the OM project undertaken by WorkSafe. The majority of these matters access common law via the narrative. Page 2

3 Pre-Litigated Statutory Conference (Damages) Resolution in the pre-litigated statutory conference (damages) phase also remains strong - at approximately 79% of resolutions during the last 12 months to 31 March Originating Motion The number of outstanding Originating Motions was 953 at 31 March 2015 (down from 1294 at the same time last year). Outstanding Damages Writs The number of outstanding damages writs was 628 at 31 March 2015 (down from 727 at the same time last year). Resolution Timeframes The following table shows the average time taken for matters to resolve depending on the different litigation phases required for resolution (months are from application received to case resolved). Average Months Taken For Resolution (Case Resolved Year) Proportion of matters Litigation Phases Where Matter Resolved 2012/ / / / Pre-Litigated Serious Injury and Pre-Litigated Damages % Originating Motion Serious Injury and Pre-Litigated Damages % Pre-Litigated Serious Injury and Damages Writ % Originating Motion Serious Injury and Damages Writ % 1 Note 2014/2015 represents resolutions for 2014Q3, 2014Q4, and 2015Q1 Page 3

4 2. New Common Law Liability Management Scheme Overview Serious Injury Decisions Finalised for the 12 months to 31 March 2015 The total number of serious injury (SI) decisions finalised in the last 12 months is (56.8%) matters had a serious injury decision finalised without the issue of an originating motion. Pre Litigated Serious Injury Decisions Application Type Both Heads PS Only Total Deemed (IB30+) 9.3 %. Both Heads 49.7 %. P&S Only 36.2 % 90.4 % Withdrawn or Not Issued 4.5 % 9.5 % A further 1076 (35.4%) matters finalised with either a concession or a withdrawal. Of the concessions where the application was for both heads, 52.4% accepted PS only. OM Concessions & Withdrawals Application Type Both Heads PS Only Total Both Heads 43.2 %. P&S Only 47.5 % 73.8 % Withdrawn or Not Served 9.2 % 26.1 % 240 (7.9%) matters were finalised with a Court judgement. OM Judgement Outcomes Application Type Both Heads PS Only Total Both Heads 64.1 %. P&S Only 14.8 % 69.5 % Denied 20.9 % 30.4 % Page 4

5 The following chart shows the overall grant rate trend and the proportion of cases with SI granted for either both heads (economic loss and pain and suffering) or pain and suffering only. These trends should be looked at in the context of the increase in common law applications. Average Damages Outcomes for the 12 months to 31 March 2015 Deemed (IB30+) 12 Months to 31 March 2015* WorkSafe Payments Number of Settlements 132 Total Payments Including Third Parties Average Damages $256,245 $281,214 Median Damages $220,000 $237,500 Both Heads Number of Settlements 1051 Average Damages $254,523 $277,757 Median Damages $250,000 $270,000 P&S Only Number of Settlements 1611 Average Damages $85,615 $93,073 Median Damages $81,576 $90,000 *Data includes zero settlements. Data based on settlement amounts and therefore implicitly allows for reductions due to contributory negligence. Deemed, Both Heads and P&S Only refer to the serious injury outcome. Around 58% of all new common law settlements have been for pain & suffering only. Page 5

6 3. Objective Assessment of Serious Injury Certificates WorkSafe undertakes an objective assessment of applications to assist with decision making, although each application is still considered on its individual merits. The assessment considers the injured worker s profile such as injury type and level of no-fault compensation received. This assists with ensuring the long term financial sustainability of common law by managing thresholds, balanced with ensuring timely delivery of settlements to the more obviously seriously injured workers. Further background information is available in previous key issues papers provided to the LLG. Considering just the impairment assessment, the following chart shows the number of applications with a greater than 10% assessment has remained reasonably stable. However, the growth has been in applications in the 5% to less than 10% range and less than 5% range. Since 1 January 2013, 63% of applications had an impairment assessment of <10% or have not gone through the impairment process. Page 6

7 Considering the weekly compensation, the following chart shows the number of applications: active on weekly with greater than 130 weeks compensation has reduced (black line); active on weekly but less than 130 weeks compensation has grown (green line); not active on weekly with more than 75 weeks of compensation in the past has grown (blue line); not active on weekly with less than 75 weeks of compensation in the past has grown (red line). Since 1 January 2013, 35% were in this category. Page 7

8 4. Pain and Suffering Only Under Fixed Cost Model (FCM) The FCM was introduced in October Since that time there has been a significant change in the proportion of applications received for pain and suffering only. This was expected as the FCM structure was designed to encourage earlier decision making on the potential success of the economic loss component of an application. However since 2013Q2, the proportion of lodgements for pain and sufferings only has reduced from the higher proportion in 2013Q1. The following chart shows the lodgements updated to 31 March The FCM structure also provided for the provision of a notice for pain and suffering only, where the defendant believes the injured worker meets the pain and suffering aspect of the serious injury threshold but not the economic loss component. The Notice has an impact on the plaintiff costs entitlements if they do not accept the offer of pain and suffering only. The following table provides information on the use of the Notice. Serious Injury Outcome Notice Quarter Both Heads PS Only Unresolved Total Judgement Other Judgement Other 2012Q Q Q Q Q Q Q Q Q Q Q Total Page 8

9 5. Plaintiff Costs Management The new Fixed Cost Model was introduced for plaintiff party-party costs for originating motions on 28 October This will apply to all applications lodged after this date. WorkSafe s costs consultants continue to add value where they are involved in the resolution of plaintiff legal costs with significant reductions from the claimed amounts. There are 280 outstanding invoices for originating motions that have been received but are yet to be paid. Out of 280 outstanding invoices, 64 invoices are for Pre FCM matters and 216 invoices for FCM matters. Page 9

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