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Tips for Defending Psychological Injury Claims A PAPER BY MICHELLE RIORDAN SEPTEMBER 2007


Tips for Defending Psychological Injury Claims by Michelle Riordan

The management of claims under the 2006 Guidelines presents the Insurer and Employer with a number of challenges. It is necessary to obtain required medical and\or factual evidence within the strict timeframes imposed by the Guidelines and to disclose the evidence to the worker in the context of a Dispute Notice under Section 74 WCA. The following comments and recommendations are made with a view to ensuring that the best possible outcome is achieved by the Employer and Insurer.

Psychological Injuries In the past, when a claim for psychological injury was received by an insurer, the insurer usually instructed a Clinical Psychologist to interview the worker and representatives of the employer and to conduct a psychological assessment of the worker. This investigation is usually described as either a “Stress Assessment” or a “Pre-Liability Assessment.” The advantage of that procedure was that it involved a psychological assessment of the allegedly injured worker and assisted the insurer in making a decision in relation to the medical dispute, namely whether or not the worker suffered a psychological injury (for the purposes of Section 4 WCA) and/or preliminary legal issues such as whether employment was a substantial contributing factor to that injury. However, the disadvantage was that the psychologist merely reported on the evidence obtained in the course of their interviews and that they did not set out that evidence in the First Person (i.e.; He said. She said). This meant that the “statements” contained within the report were in summary or précis form. This caused evidentiary problems, as statements in that form are effectively hearsay and are not admissible under the terms of the Evidence Act. This is a particular problem in courts of common law jurisdiction. It was also not unusual for these reports to be submitted to the Insurer before the persons interviewed had certified (by signing the “summary” of their evidence contained in the report) that the contents of the “summary” were true and correct. This meant that it was possible for an Insurer to rely upon the contents of an Investigation report to decline liability for a claim only to have a witness later refused to certify that the summary of their evidence was true and correct. While the Workers Compensation Commission is not bound by the rules of evidence, it is nevertheless a paper-driven jurisdiction that allows oral evidence to be called only in exceptional circumstances. In my experience, the absence of proper witness statements invariably weakens an insurer’s defence of a litigated compensation claim. In my view, it is essential that signed statements be obtained from relevant witnesses in all matters. These must be written in “First Person” (i.e. “He said. She said”) and should not be prepared in “Third Person” (i.e. “the witness told me” or “the witness said”) or represent a précis of the witness’ evidence. It may be possible, subject to discussion with the providers of psychological assessment services, for a hybrid-type assessment to be conducted.This would involve a clinical psychologist conducting the initial assessment, interviewing witnesses and preparing and obtaining signed statements and obtain relevant source documents from the Employer followed by a formal assessment by a psychiatrist. Failing this, I recommend that psychological/psychiatric assessment be deferred pending completion of a factual investigation by an Investigator instructed by the Insurer, as the psychologist\psychiatrist can then be properly briefed with signed statements and relevant source documents from the Employer (if appropriate) and can assess the worker in the light of that information. They can then provide an informed opinion in relation to the claim. These issues are of particular relevance where the Insurer seeks to rely upon a defence under Section 11A WCA. In my experience, the qualified Clinical Psychologist generally expresses an opinion as to whether or not the Employer’s action or proposed action was reasonable,

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Tips for Defending Psychological Injury Claims by Michelle Riordan

although in most cases they base this solely upon oral evidence obtained from an Employer’s representatives and it is only in rare cases that they are provided with any documentary evidence that supports that opinion. It must be remembered that the Employer bears the onus of proving that its actions or proposed actions were reasonable and a mere comment that is not supported by appropriate evidence will be insufficient to discharge that onus. In my experience, the Workers Compensation Commission has afforded little weight to opinions that actions or proposed actions were reasonable unless those views are based on documented evidence and are therefore soundly based. Whether a psychologist or an investigator is appointed, they should be instructed to interview all relevant witnesses, to prepare and obtain signed statements from those witnesses and to obtain relevant documentation and records from the Employer and to annexe them to their report.

Instructions to Investigators I recommend that the instructions to an investigator should be as specific as possible and restricted to the issues in dispute, unless the Insurer has insufficient information to determine what issues are disputed. However, in those cases, a Reasonable Excuse letter will probably have been issued to a worker and the Insurer will therefore have additional time in which to conduct investigations and make a decision in relation to liability. If there is no dispute regarding the alleged injury, there is no point in instructing an investigator to conduct enquiries to ascertain the circumstances of the injury, as this will only delay the completion of the investigation and add to the costs of the investigation. As far as possible, an investigator should be briefed with the names of persons to be interviewed. If these are not known to the Insurer, an Employer Liaison should be nominate who can identify relevant witnesses and/or assist the investigator to arrange those interviews. If an injured worker is legally represented, the investigator should be instructed not to interview the worker. The investigator should be told what documentation and\or records are required. This will vary depending on the nature of the claim and the issues in dispute. For example, a dispute as to whether a particular injury occurred in the course of a worker’s employment would require the investigator to obtain any entries in the Register of Injuries and to ascertain whether the worker was actually at work at the time that the alleged injury occurred. A statement of the worker’s duties would also be of assistance in such a case, as well as evidence of any prior claims and\or similar complaints or reports of injury made by the worker. Where Section 11A may apply, the investigator should also be instructed to ascertain what policies and procedures were in place at the time of the alleged injury and whether the Employer followed them in its dealings and\or proposed dealings with the worker. In that type of case, copies of published policies and procedures, personnel records and/or disciplinary files and leave records should be obtained and annexed to the report. Where there is no dispute in relation to weekly compensation or the appropriate rate of compensation, do not instruct the investigator to obtain wage records as this process can be time consuming (particularly in the case of Public Sector Employers), will delay completion of the report and add to its cost.

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Tips for Defending Psychological Injury Claims by Michelle Riordan

For more information, please contact:

Michelle Riordan Partner T: 02 8257 5738 michelle.riordan@turkslegal.com.au

Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922 Melbourne | Level 10 (North Tower) 459 Collins Street , Melbourne, VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099 Business & Property | Commercial Disputes | Insurance & Financial Services | Workers Compensation | Workplace Relations

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Tips for Defending Psychological Injury Claims  

The management of claims under the 2006 Guidelines presents the Insurer and Employer with a number of challenges. It is necessary to obtain...

Tips for Defending Psychological Injury Claims  

The management of claims under the 2006 Guidelines presents the Insurer and Employer with a number of challenges. It is necessary to obtain...

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