“Caulfield” and “Cram Fluids”

We confirm that among the changes to the law of workers compensation effected by the 2012 Legislative amendments, was a change to claims for lump sum permanent impairment compensation. In the case of injuries suffered on or after 19 June 2012, a worker can only make “one claim” for lump sum permanent impairment compensation, this can only be done if the permanent whole person impairment is in excess of 10% and there is no longer an entitlement to an additional lump sum compensation for pain and suffering (section 67 pain and suffering compensation has been abolished). There have been cases in the Workers Compensation Commission, New South Wales Court of Appeal and High Court of Australia, interpreting the Legislation to do with lump sum permanent impairment compensation including the definition of “one claim” and other matters. The Workers Compensation Commission case of “Caulfield” had the effect that workers who were injured prior to 19 June 2012, AND, made and recovered lump sum compensation prior to 19 June 2012, were not affected by the Legislative changes and could make further claims for increased permanent impairment on the basis of deterioration and pain and suffering subsequent to 19 June 2012. The pre-2012 law continued to apply to them. There was no greater than 10% threshold (impairment as low as 1% was sufficient), no “one claim rule” and pain and suffering compensation was payable in cases of at least 10% whole person impairment. Recently another case of “Cram Fluids” was before the Courts. The insurer’s legal representatives argued that the law as stated in the Caulfield case was incorrect and that case was incorrectly decided. The Workers Compensation Commission disagreed and dismissed the insurer’s arguments but the insurer appealed to the New South Wales Court of Appeal. Arguments were made before the Court of Appeal. A decision is still pending. The consequence of all of this is that the Legal Aid Service (WorkCover Legal Assistance and Review Service) has suspended funding those type of claims. ILARS is still funding claims for first applications for funding for lump sum permanent impairment compensation where it appears there are reasonable prospects of success.

We will provide an update as soon as the “Cram Fluids” Court of Appeal decision is published.