The High Court has handed down its decision in the long awaited and anxiously anticipated case of ADCO Constructions Pty Ltd v Goudappel & Anor. The case dealt with important questions about the ramifications of the O’Farrell government’s sweeping changes to the Workers’ Compensation scheme in New South Wales. It specifically dealt with the question of whether the changes affected the right of a worker to specifically claim lump sum workers’ compensation where that worker had lodged a claim arising from the same injury prior to the changes taking effect.

Permanent impairment assessment

Ronald Goudappel, an employee of ADCO Constructions, was injured at work on 17 April 2010. He claimed compensation on 19 April 2010, seeking weekly payments and medical expenses, which were necessary to sustain him through his recovery. It was not until his injury had stabilised that he was able to obtain an assessment of the permanent impairment caused by his injury. That permanent impairment was assessed at 6%. He then made a claim for lump sum, permanent impairment compensation quantified according to that assessment. The claim was made in these terms on 20 June 2012.

The “savings and transitional provisions” of the amendments to the Workers’ Compensation Act stated that claims made prior to 19 June 2012 would not be affected. The amendments relevantly provided that no permanent impairment compensation was available to a claimant unless their permanent impairment exceeded 10%. The O’Farrell government created a further regulation under the savings and transitional provisions that stated that a person would not be entitled to permanent impairment compensation for impairment not exceeding 10% unless that claim was specifically made prior to 19 June 2012. ADCO’s workers’ compensation insurer declined liability for Mr. Goudappel’s claim on the basis that the amendments applied to his claim, because he had not specifically made the claim prior to the 19 June deadline. Mr Goudappel argued that his permanent impairment claim was on foot from the time that he first claimed compensation on 19 April 2010.

Accepting ADCO’s argument, the appeal from the Supreme Court of New South Wales was unanimously allowed by the High Court. It found that the regulation was validly made under the savings and transitional provisions of the Act, and that they had the effect of extinguishing Mr Goudappel’s entitlement to permanent impairment compensation. Although the High Court agreed that the claim for permanent impairment compensation was effectively on foot from 17 April 2010, it found that the claim had not been specifically made as required by the regulation. Specifically, Mr Goudappel had not provided an expert quantification of his permanent impairment and a formal claim for permanent impairment compensation prior to the 19 June deadline.

The result of the regulation, confirmed by this decision, is that workers who were injured prior to 19 June 2012, and who had commenced the claims process prior to that time but had not fulfilled the formal requirements of claiming permanent impairment compensation, are denied a right to compensation unless their level of impairment exceeds 10%. It means that many workers who did not have an opportunity to satisfy the legal technicalities of the permanent impairment claims process prior to the O’Farrell government’s deadline, but who had nevertheless suffered the permanent impairment prior to that deadline, are denied a right to compensation that they otherwise would have had. Workers like Ronald Goudappel, who had a legitimate expectation of compensation for their permanent impairment, have been left to permanently suffer without compensation. This is the latest of the regrettable policy outcomes of the 2012 amendments to the workers’ compensation scheme in this state.