MOTOR ACCIDENT INSURANCE ACT 1994 - SECT 51 Obligation to provide rehabilitation services

MOTOR ACCIDENT INSURANCE ACT 1994 - SECT 51

51 Obligation to provide rehabilitation services

(1) An insurer may make rehabilitation services available to a claimant on the insurer’s own initiative or at the claimant’s request.

(2) An insurer that makes rehabilitation services available to a claimant before admitting or denying liability on the claim must not be taken, for that reason, to have admitted liability.

(3) Once liability has been admitted on a claim, or the insurer has agreed to fund rehabilitation services without making an admission of liability, the insurer must, at the claimant’s request, ensure that reasonable and appropriate rehabilitation services are made available to the claimant.

(3A) However, the insurer is not required to make rehabilitation services available to the claimant in relation to the claimant’s treatment, care and support needs as a result of the claimant’s injury if—

(a) the claimant is, when the needs arise, a participant in the injury insurance scheme in relation to a serious personal injury resulting from the motor vehicle accident the subject of the claim; or

(b) the needs arise after an amount is paid to the claimant, or a person acting for the claimant, under the National Injury Act , section 44 (3) (a) in relation to a personal injury resulting from the motor vehicle accident the subject of the claim.

(3B) Subsection (3A) applies—

(a) whether or not the injury the subject of the claim is a serious personal injury; and

(b) whether or not the treatment, care and support needs are an approved service for the claimant under the National Injury Act ; and

(c) whether or not the insurance agency must, under that Act, make a payment in relation to the treatment, care and support needs; and

(d) whether or not the treatment, care and support is provided without charge.

(4) If the insurer intends to ask the court to take the cost of rehabilitation services into account in the assessment of damages, the insurer must, before providing the rehabilitation services, give the claimant a written estimate of the cost of the rehabilitation services and a statement explaining how, and to what extent, the assessment of damages is likely to be affected by the provision of the rehabilitation services.

(5) The claimant may, if not satisfied that the rehabilitation services made available under this section are reasonable and appropriate—

(a) apply to the commission to appoint a mediator to help resolve the questions between the claimant and the insurer; or

(b) apply to the court to decide what rehabilitation services are, in the circumstances of the case, reasonable and appropriate.

(5A) An application for appointment of a mediator under subsection (5) (a) must—

(a) be made in writing; and

(b) give details of any attempts made by the applicant to resolve the matter in dispute.

(5B) The fees and expenses of a mediator appointed under subsection (5) (a) are to be paid as agreed between the parties or, in the absence of agreement, by the parties in equal proportions.

(5C) An application may be made to the court under subsection (5) (b) whether or not there has been an earlier attempt to resolve the questions between the claimant and the insurer by mediation.

(5D) On an application under subsection (5) (b) , the court may decide what rehabilitation services are, in the circumstances of the case, reasonable and appropriate and make consequential orders and directions.

(6) The insurer must bear (or reimburse) the cost of providing rehabilitation services under this section unless the insurer’s liability is reduced—

(a) by agreement with the claimant; or

(b) by order of the court under subsection (8) .

(7) The insurer may, if of the opinion that the cost of rehabilitation services is unreasonable—

(a) apply to the commission to appoint a mediator to help resolve the questions between the claimant and the insurer; or

(b) apply to the court to decide what rehabilitation services are, in the circumstances of the case, reasonable and appropriate or to decide to what extent the insurer should contribute to the cost of rehabilitation services.

(7A) An application for appointment of a mediator under subsection (7) (a) must—

(a) be made in writing; and

(b) give details of any attempts made by the applicant to resolve the matter in dispute.

(7B) The fees and expenses of a mediator appointed under subsection (7) (a) are to be paid as agreed between the parties or, in the absence of agreement, by the parties in equal proportions.

(7C) An application may be made to the court under subsection (7) (b) whether or not there has been an earlier attempt to resolve the questions between the insurer and the claimant by mediation.

(8) On an application under subsection (7) (b) , the court may decide the questions raised on the application and make consequential orders and directions.

(9) The cost to the insurer of providing rehabilitation services under this section is to be taken into account in the assessment of damages on the claim if (and only if) the insurer gave a statement to the claimant, as required under subsection (4) , explaining how and to what extent the assessment of damages was likely to be affected by the provision of the rehabilitation services.

(9A) If the cost of rehabilitation services is to be taken into account in the assessment of damages, the cost is taken into account as follows—

(a) the claimant’s damages are first assessed (without reduction for contributory negligence) on the assumption that the claimant has incurred the cost of the rehabilitation services as a result of the injury suffered in the accident;

(b) any reduction to be made on account of contributory negligence is then made;

(c) the total cost of rehabilitation services is then set-off against the amount assessed.

Example—

Suppose that responsibility for a motor vehicle accident is apportioned equally between the claimant and the insurer. Damages (exclusive of the cost of rehabilitation) before apportionment are fixed at $20,000. The insurer has spent $5,000 on rehabilitation services. In this case, the claimant’s damages will be assessed under paragraph (a) at $25,000 (that is, as if the claimant had incurred the $5,000 rehabilitation expense) and reduced to $12,500 under paragraph (b) , and the $5,000 spent by the insurer on rehabilitation will be set off against this amount, resulting in a final award of $7,500.

(10) An insurer who is induced by a claimant’s fraud to provide rehabilitation services for the claimant may recover the cost to the insurer of providing the services, as a debt, from the claimant.