Case note – AFH v AAI Limited trading as GIO [2019] NSWDRS CA 134


On 28 August 2018 the Claimant was riding his motorbike with a group of other riders on the South Coast.

The Claimant’s version of events was that he indicated left and pulled off to the side of the road. The Claimant states his bike was stationary in the middle of the “fog lane” and outside the left lane when the insured driver, travelling in the same direction, collided with him.

Both vehicles burst into flames and the Claimant sustained serious injuries, remaining unfit for work.

The Insurer asserted that the Claimant had performed a U-turn in front of the insured motor vehicle. The Insurer therefore denied liability for statutory benefits beyond 26 weeks on the basis that the Claimant was “wholly or mostly at fault” for the accident.

Accordingly, the Claimant’s solicitors filed an application with the Dispute Resolution Service (DRS).

DRS Application

As a preliminary matter, Counsel for the Claimant asserted that the Insurer bore the onus of proof in establishing that the Claimant was “wholly or mostly at fault” for the accident. The nub of the argument was that the Insurer should bear this onus it was trying to strip the Claimant of his statutory benefits, to which he would otherwise be entitled.  This was ultimately conceded by the Insurer.

There were a number of deficiencies in the evidence relied upon by the Insurer. The Insurer did not serve a statement from its insured driver. The Insurer was unable to secure the attendance of a police witness to give evidence. There were significant delays in obtaining the police file and an investigator’s report.

The matter was listed for a face-to-face assessment conference.

Ten days before the assessment conference the Insurer issued a revised liability notice, conceding that it could not discharge its onus of proof. The Insurer therefore accepted liability for statutory benefits beyond 26 weeks from the accident.


Counsel for the Claimant sought an order for “exceptional costs”, arguing that the 2017 Act conferred upon the DRS Assessor a discretion to allow costs beyond the $1,633 permitted by the Regulation.

Counsel for the Claimant relied upon s 8.10, ss (4)(b) of the Act, which provides that the DRS can permit the payment of legal costs incurred by the Claimant where “exceptional circumstances” exist.  Counsel argued that this subsection acts as a “safety valve against any injustice in limiting costs to the regulated fee.

Given the complex factual and legal issues, Counsel submitted that “exceptional circumstances” existed to warrant an award of costs in excess of the regulated fee. Clearly, this was a matter where the regulated fee was inadequate.

The Insurer argued that 8.10(4)(b) did nothing more than allow the DRS Assessor to award the regulated fee.

The Assessor ultimately accepted the Claimant’s argument, awarding total costs of $20,807.16.


Where an insurer is seeking to disentitle a claimant to statutory benefits on the basis that they are “wholly or mostly at fault” for an accident, the solicitor for the Claimant should seek a concession or finding that the insurer bears the onus of proof. In this matter, this concession was key to the undoing of the Insurer’s case.

Where “exceptional circumstances” exist, the solicitor for the claimant should consider an application for costs beyond the regulated fee. This may represent an important step in improving access to justice under the 2017 Act, enabling solicitors to invest the appropriate time and resources into a complex DRS application. Time will tell how readily DRS Assessors will award costs beyond the regulated fee.  It is also noteworthy that exceptional costs have also been awarded by a different Assessor in AFG v GIO Limited [2019] NSWDRS CA 133, an unrelated matter also involving an injured motorbike rider. The Insurer also conceded that it bore the onus of proof in this matter.

This is an encouraging development for solicitors representing claimants in disputes under the 2017 Act.