On 26 October 2015, Minister for Innovation and Better Regulation Victor Dominello announced the Workers Compensation Amendment (Lump Sum Compensation Claims) Regulation 2015 (the “Regulation”), which came into force on 13 November 2015.

The new Regulation enables workers in NSW who made a claim for lump sum compensation for permanent impairment before 19 June 2012 to make one further claim if their work-related condition significantly deteriorates.

The commencement of the Regulation came about as a result of feedback from various stakeholders given to the NSW Government in relation to the impact of the decision handed down by the NSW Court of Appeal in Cram Fluid Power Pty Ltd v Green [2014] NSWCA 250 (Cram Fluid) on 27 August 2015.

Cram Fluid

Cram Fluid dealt with the application of amendments to the Workers Compensation Act made by the NSW O’Farrell Government effective from 19 June 2012, which provided that injured workers were only able to make one claim for lump sum compensation under section 66 of the Act.

Claim for lump sum compensation

Until Cram Fluid, it had been thought that the one claim limitation rule in the 19 June 2012 legislative changes only applied to claims that were made after 19 June 2012. Indeed, the Workers Compensation Commission had decided on numerous occasions, that if an injured worker had made a claim for lump sum compensation under section 66 prior to the 19 June 2012 amendments, the worker could still make additional claims for lump sum compensation under the section if their condition worsened.

In Cram Fluid, Mr Green suffered a back injury in the employ of Cram Fluid Power Pty Ltd on 24 May 2005 and settled a claim for lump sum compensation in respect of 7% whole person impairment on 14 December 2010. Over the years, Mr Green’s back condition deteriorated to the point he required further surgery in 2012. On 29 October 2013, he made a further claim for lump sum compensation in respect of 22% whole person impairment. The case proceeded from the Workers Compensation Commission to the NSW Court of Appeal, which ultimately decided that the one claim limitation introduced on 19 June 2012 did apply to Mr Green and he couldn’t bring the further claim.

Briefly stated, the effect of the decision in Cram Fluid was that all injured workers, were only allowed to make one lump sum compensation claim under section 66 regardless of when the claim was made. As a result, all cases before the Workers Compensation Commission for further lump sum claims for permanent impairment were discontinued or dismissed.

The decision produced one of the most unfair consequences of the O’Farrell Workers Compensation Act amendments. Injured workers who settled lump sum compensation claims prior to 19 June 2012 (often in circumstances where insurers promoted those settlements in order to close their claim files) did so with the knowledge that if their work-related conditions deteriorated, they could make additional lump sum compensation claims.  Many of those workers would not have settled their lump sum compensation claims had they known that they would not be able to make such additional lump sum compensation claims, if necessary.

The new Regulation effective from 13 November 2015 reversed the short-lived decision in Cram Fluid. The NSW Government has estimated that approximately 6000 pre-19 June 2012 injured claimants may be eligible to make a claim following the new Regulation. Injured workers who had a matter before the Workers Compensation Commission that was discontinued or dismissed following Cram Fluid can now either seek to restore the original proceeding or start fresh proceedings and where disputes have been determined inconsistent to the new Regulation, workers may now seek reconsideration of their case.

Have you been affected by this recent change?

If you believe that you may have been affected by the recent legislative changes to lump sum compensation entitlements, please contact your closest Turner Freeman Office on 13 43 63 to speak to one of our workers compensation experts.