Liability decisions for mental health claims

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Liability decisions

Sound decision-making

Elements of a liability decision

How do we determine if the injury is work-related?

Special decision types on mental health claims

Defending claims under section 11A

What if I disagree with the liability decision?

Liability decisions

The workers compensation provisional liability phase is up to 12 weeks of weekly benefit payments or up to $10,000 in medical expenses.

When a liability decision is made, claims service providers (CSPs) must provide a formal notice to both worker and employer that clearly explains why the decision was made, including the evidence that was considered and the legislative provisions that were relied upon. The decision notice will also provide details of how to have the decision reviewed.

Both worker and employer will be contacted by the case manager and asked to provide information that helps to assess how the injury occurred and supports the liability decision. Case managers will also contact treatment providers such as the worker's Nominated Treating Doctor (NTD), psychologist or psychiatrist.

On mental health claims, your case manager will often commission other investigations to support the liability decision. In the event they require more medical information, they may make a referral to an Independent Medical Examiner (IME).

Because mental health claims often originate because of the interactions between people in the workplace, they may also commission a factual investigation to better understand the circumstances that led to the injury.

Learn more about type of investigations

All decisions made on a claim should be timely, be based on all available evidence and involve consultation with all relevant stakeholders.

Sound decision-making

Case managers are responsible for making claims liability decisions. In order to make sound decisions that are fair, transparent and timely, they're provided with substantial training and support from experts with both legal and medical knowledge.

The evidence they gather on a claim needs to be recent, relevant and credible, and when they make a liability decision, they're required to explain the evidence they've considered and how that supports the decision.

They're also required to observe the requirements of workers compensation legislation which sets out key considerations for liability such as causation, the relationship of the injury to the workplace, who is and isn't a worker and the nature of the injury itself.

Case managers need to ensure the decisions they make are objective and impartial, free of prejudice or bias. When making decisions, case managers are obliged to observe the requirements of the NSW Government's Model Litigant Policy which sets out the concepts of behaving ethically, fairly and honestly.

Elements of a liability decision

There are certain things that must be considered when making a liability decision that are universal considerations for all workers compensation claims. These elements are:

• that the injured person is a worker, as defined by the legislation
• that they have sustained an injury (a frank injury occurring on a specific day, a disease injury that develops over time or the aggravation or acceleration of an underlying condition)
• the injury satisfies the relevant contributing factor test, also known as causation.

Causation for mental health injuries can be complicated and the legislation sets out a range of considerations, some which apply for both mental health and physical injury claims and some which apply exclusively to mental health claims:

• For all claim types, the case manager needs to determine if the injury arose out of or in the course of employment
• If the injury is a disease injury (something that developed over time, or an aggravation) the workplace must be the main contributing factor
• If the injury is not a disease injury, say an injury incurred from a single traumatic event, then the workplace must be a substantial contributing factor
• If the injury was caused by the reasonable actions of the employer (for activities specified in the legislation), then then those activities must be the whole or predominant cause of the injury.

As you can see, considering all these elements in order to make a liability decision is a complicated process and case managers are supported by technical and legal specialists to help make the most appropriate decision.

How do we determine if the injury is work-related?

The question about whether an injury arose out of or in the course of employment is both a medical and a factual one. In order to address the question, case managers will make enquiries and commission investigations that respond to each of these key aspects.

The first medical indicator of work-relatedness is found on the Certificate of Capacity/certificate of fitness provided by the worker's Nominated Treating Doctor (NTD). The NTD is asked to indicate whether they consider the injury is work-related.

This decision is not always clear, because many mental health injuries occur as an aggravation to a condition the worker has already been living with or develop over a period of time. Where this is the case, case managers might also make contact with the worker's treating psychologist or psychiatrist to ask their opinion. If this aspect still remains unclear, case managers will refer the worker for an independent medical examination with a psychiatrist.

Case managers and treatment providers need to consider the circumstances in which the injury has occurred. As these circumstances can be complicated, case managers will often commission a factual investigation to explore the events leading to the injury and will sometimes share details of these investigations with treating practitioners or independent medical examiners to better inform their assessment.

Special decision types on mental health claims

There are two specialised types of liability decisions that occur only on mental health claims. These occur because of the unique nature of mental health injuries and the circumstances in which they occur.

Perception-based injuries

This type of injury occurs due to the worker's perception that events occurring in the workplace have caused an injury.

The legal criteria used to make this type of decision is now well-established. The following criteria applies:

• Employers take their employees as they find them, regardless of their predisposition to certain types of injury
• The events that took place must be real events, not external or imagined (arising out of or in the course of employment)
• The events that actually happened in the workplace, are perceived by the worker as creating an offensive or hostile working environment and a psychological injury followed (causation)
• So long as the events were real and not imaginary, it doesn't matter that they affect the worker's psyche because of a flawed perception of events or the worker's disordered mind
• There is no requirement at law that the worker's perception of events must have passed some qualitative test based on an "objective measure of reasonableness" and
• The worker's reaction to events does not need to be "rational, reasonable and proportionate".

Section 11A decisions

There are activities that employers need to undertake in order to conduct their business that can result in injury, despite their efforts to act reasonably while carrying out those activities. In these very specific circumstances, if the employer has acted reasonably throughout the process then the claim may be declined.

No compensation is payable if the injury was wholly or predominantly caused by the employer's reasonable actions while they undertake (or propose to undertake) activities in relation to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers. If injury has arisen from activities other than these specified in the legislation, then this defence becomes unavailable.

When case managers make this type of liability decision, they need to establish that the injury arose solely from the specific activities described in the legislation and that the employer acted reasonably throughout the course of that activity. This can be hard to determine if there is insufficient information available to assist the decision-maker.

Defending claims under section 11A

Decisions to decline a claim under section 11A can only succeed where there is sufficient evidence to demonstrate the events causing the mental health injury related solely to those activities prescribed under section 11A and that the employer acted reasonably in all interactions with the worker during the process.

Employers can assist the case manager considering this type of decision by providing as much documentary material relating to the process as they have available. Essentially, an employer is providing the evidence to prove that all aspects of the process were conducted reasonably. In the absence of clear information demonstrating how these activities were conducted, the case manager will likely need to accept the claim.

In addition to this documentary evidence, the other common element for these decisions will be a factual investigation, where the parties involved are invited to provide a statement that sets out their understanding of how events transpired.

It's important that employers and workers inform the case manager about all individuals who were involved and who have information to provide regarding the process that led to the injury so that each might be invited to provide a statement.

Lastly, it's important to understand that if the worker's injuries weren't solely caused by the specific events described in section 11A, then this defence becomes unavailable.

Because this type of decision is complicated, case managers will often seek legal advice before making the decision to ensure all the relevant elements have been objectively assessed.

What if I disagree with the liability decision?

Both employers and workers are entitled to have liability decisions reviewed if they think they are incorrect. In the first instance we encourage you to take the matter up with your claims service provider, who should be able to explain how and why the decision was made.

If you're still dissatisfied after discussing the decision with your CSP, then you can request a review of the decision made. This review will be conducted by an individual independent to those involved in the original decision.

You can find more information about how to lodge your request to dispute on our Types of workers insurance disputes page or via your case manager.