The $1 billion judgment

Compo lawyers will be painting the town red ... NSW Court of Appeal wipes out 25 percent of the government's proposed savings from the 2012 workers comp reforms ... Lump sums are back - at the old rate  

Workers compensation black hole discovered by the Court of Appeal

The NSW Court of Appeal has blown a $1 billion black hole in the NSW workers compensation budget. 

In a decision handed down today (Monday, April 29) a beefy court, comprising Bathurst CJ, Beazley P and Basten JA found that last year's money-saving amendments to the Workers Compensation Act don't apply to those injured prior to June 19, 2012 who have a permanent impairment arising from a workplace injury and seek lump sum compensation.  

The amendments sought to save $4 billion in the workers comp system. Lump sum payments would only be available to workers with injuries causing greater than 10 percent impairment. 

Previously, claims for lump sums could be made with greater than one percent permanent impairment, plus top-ups if medical conditions deteriorated. 

Ronald Goudappel was injured at work when a bundle of steel purlins fell off a forklift, crushing his foot and ankle. 

His impairment was assessed at six percent. 

Under the previous workers comp regime he would have received a payment of $8,250.  

His entitlement to a lump sum depended on transitional provisions, which said that the amendments applied to claims made on or after June 19, 2012. 

The issue turned on whether "claim for compensation" in the provisions referred to a claim for compensation generally, or a claim specifically for lump sum compensation. 

The president of the WCC, Judge Greg Keating, applied the latter construction to  Goudapple's claim. 

In other words, he said the amendments denied a lump-sum payment to the worker. 

The CA, led by Basten, disagreed, finding that a "claim for compensation" referred to a claim for compensation generally, so his application for a lump-sum was not affected by the legislative change. 

That was because Goudappel made a claim for weekly benefits prior to June 19, 2012. 

The decision will wipe-out at least 25 percent of the savings the government planned to achieve. 

The only snag is that workers will have to pay their own costs. 

It is unlikely the the O'Farrell government has the political strength to tidy up its Act. 

This is one almighty stuff-up of a legislative reform. 

The responsibility most likely lies somewhere deep in WorkCover. Maybe, it's a case of being gripped by tunnel vision. 

See: Goudappel v ADCO Constructions