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The Guthrie report.
The Guthrie report outlines the problems with the current system in WA.
It refers to the systems throughout Australia. Essential reading. |
Posted: 9:06 AM, 28/7/2007 |
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The Guthrie report
DISCUSSION PAPERS
TO ACCOMPANY THE
REPORT ON THE IMPLEMENTATION OF THE
LABOR PARTY DIRECTION STATEMENT
IN RELATION TO WORKERS’ COMPENSATION
Report to the
Workers’ Compensation and Rehabilitation Commission
For the
Hon Minister for Consumer and Employment Protection
PRESENTED BY
ROBERT GUTHRIE B JURIS LLB LLM
RESEARCH FELLOW
INSTITUTE FOR RESEARCH INTO INTERNATIONAL COMPETITIVENESS
CURTIN UNIVERSITY OF TECHNOLOGY
31 July 2001
Page: i
TABLE OF CONTENTS
Discussion Paper One
Negotiation and Power in Conciliation and Review
of Compensation Claims 1
Introduction 1
Conciliation Officers 2
Review Officers 4
Compensation Magistrates 4
The Supreme Court 5
“Repeat players” and “One shotters” in Workers’ Compensation Disputes 5
Power in compensation claims 7
Formal power 8
Expert /information power 8
Associated power 8
Resource power 8
Procedural power 8
Sanction power 8
Nuisance power 8
Habitual power 9
Moral power 9
Personal power 9
The exercise of power by Workers 9
Personal power, literacy and cultural diversity 16
Stress Claims 21
Gender 23
The exercise of power by Employers and Insurers 27
The exercise of power by Conciliation and Review Officers 31
Lawyers and exercise of power 32
The effect of power imbalances in compensation disputes 35
Observations 38
Conclusions 45
Discussion Paper Two
Return to Work Provisions and Unfair Dismissal
in Compensation Legislation in Australia 49
Return to work and Rehabilitation 50
The Interaction between Return to Work Provisions and Industrial Laws 51
Victorian Provisions 51
South Australia 57
Western Australia 60
Northern Territory 65
New South Wales 66
Queensland 71
Tasmania 74
Federal Industrial Provisions 75
Failure to Return to Work and Frustration of the contract of employment 76
Evidentiary Matters 83
Conclusions 85
Page: ii
Discussion Paper Three
Recent developments in Workers Compensation -
Problems with the concept of Disability and
the use of AMA Guides 87
Abstract 87
Introduction 87
Medical Terminologies and the Terminology of the
Workers’ Compensation and Rehabilitation Act 1981(WA) 88
Problems Identified by the Knowles Report 88
Terms used for medical purposes. 89
The Definition Of Disability Under The Workers’ Compensation And
Rehabilitation Act 1981(WA) 91
The Concept of Incapacity 96
The Distinction Between First Schedule and Second Schedule
Entitlements. 98
Permanent Loss and Impairment in Other States 99
The Second Schedule and the Assessment of Degrees of
Disability Under Section 93D of the Act 101
The 30% Disability Threshold 102
Disputes as to the degree of disability 103
Disabilities less than 30% 105
The AMA Guides 106
Causation 108
Different Uses of the Term Disability in the Act 109
Suggestions For Change 112
Discussion Paper Four
Compensation in the Sex Industry – Future Directions
in Western Australia 115
Abstract 115
Illegal contracts of employment 115
Compensation Cases 116
Immigration Cases 118
Sex Workers 120
Trends 122
Industrial Cases 124
Assessment of compensation for illegal contracts 125
Impairment and illegal contracts 127
Conclusions 130
Page: iii
CASES
Allman v Major Finance & Engineering Pty Ltd..............................................................................................92
Anderson v Princess Margaret Hospital ..........................................................................................................103
Andrews v Uniting Church in Australia Frontier Services..................................................................................74
Ansett Australia Ltd v The Medical Assessment Panel ....................................................................................92
Arnotts Snack Products Pty Ltd v Yacob............................................................................................................95
Arrowcrest Group Pty Ltd v Gill..........................................................................................................................57
Azzopardi v Workcover Queensland ...................................................................................................................72
Barac v Farnell .......................................................................................................................................................117
Bednarczk v Natcorp Investments Ltd (Formerly Wilcox Mofflin Ltd) ...........................................................5
Bell v Western Australian Fire Brigades Board ....................................................................................................81
Bilson v George Chapman Pty Ltd......................................................................................................................59
Bird v Commonwealth ..........................................................................................................................................54
Burazin v Blacktown City Guardian Pty Limited..............................................................................................66
Cansino v South Western Sydney Area Health Service....................................................................................69
Carrigan v Darwin City Council..........................................................................................................................64
Catholic Care v Wrafter........................................................................................................................................22
Chen v Allied Packaging Co Pty Ltd Limited..................................................................................................120
Clements v Norm Wrightson t/as Hairways.......................................................................................................31
Codelfa Construction Pty Ltd v State Rail Authority of New South Wales...................................................76
Courtaulds Northern Textiles v Andrew.............................................................................................................65
Curro v Beyond Productions Pty Ltd..................................................................................................................75
Davis Contractors Ltd v Fareham Urban District Council ...................................................................................76
Dean v Moore Paragon Australia Limited.........................................................................................................55
Denny, Mott and Dickson Ltd v James B Fraser and Co Ltd .........................................................................80
Department of Public Works v Morrow............................................................................................................124
Durham v Westrail.......................................................................................................................................... 62, 75
Dyet v Lake Macqurie City Council....................................................................................................................69
Dzonlagic v The Mattress Renovators Perth Pty Ltd .........................................................................................106
East Fremantle Town Council v Jakobson.........................................................................................................10
Egg Stores (Stamford Hill) Ltd v Lebibovici..............................................................................................................76
Emmerson v Housing Industry Association ............................................................................................................74
Erisir v Kellog (Australia) Pty Ltd ....................................................................................................................114
Ex Parte Juras.............................................................................................................................................104, 111
Ex Parte Rusich....................................................................................................................................................104
F C Shepherd and Co Ltd v Jerrom.....................................................................................................................76
Fazlic v Millingimbi Community Inc...................................................................................................................55
Fenton v J Thorley & Co Ltd...............................................................................................................................90
Fibrosa Spolka Akcyyina v Fairbairn Lawson Combe Barbour....................................................................77
Finch v Sayers...........................................................................................................................................76, 79, 80
Fisher v Edith Cowan University (No2).............................................................................................................78
Fitzgerald v F.J. Leonhardt Pty Ltd..................................................................................................................116
Gardiner v State of Victoria ................................................................................................................................53
Grigoletto v Myer Properties WA ........................................................................................................................30
Hall v Solo Waste Aust Pty Ltd............................................................................................................................68
Hart v A R Marshall & Sons (Bulwell) Ltd................................................................................................................77
Hebden v Forsey & Son........................................................................................................................................78
Heperi v Castaing..................................................................................................................................................35
Horberry v Yazaki Australia Pty Ltd (SA) Operations.........................................................................................59
Huang v Ford Motor Company of Australia......................................................................................................55
Innisfail District Health Service and Mitchell.....................................................................................................79
Jacob v BHP Iron Ore.........................................................................................................................................103
Johnston v Impala Kitchens Administration Pty Ltd........................................................................................67
Kaufusi v Supre Pty Ltd......................................................................................................................................122
Kavanagh v The Commonwealth........................................................................................................................90
Kemp v Lewis........................................................................................................................................................113
Kennedy Cleaning Services Pty Limited v Petkoska........................................................................................94
Kinsella v Seton Catholic College.....................................................................................................................105
Malcolm v Roads & Traffic Authority...............................................................................................................124
Page: iv
Malkoun v Australian liquor Marketers Pty Ltd ...............................................................................................69
Mansell v Bellorana Hostel ...............................................................................................................................124
Marshall v Harland and Wolff.............................................................................................................................77
Masters v Local Boys Pty Ltd...................................................................................................................................75
McNair v Press Offshore Limited and Another....................................................................................................81
Mercer v ANZ Banking Group .............................................................................................................................92
Mitchell v Raynep Pty Ltd..................................................................................................................................125
Monaco v Wilson Transformer Company Pty Ltd.............................................................................................51
Munro v Department of Fisheries & Wildlife ..................................................................................................100
National Mine Management Pty Ltd v Bowden...............................................................................................109
Needham v Shepparton Preserving Company Ltd............................................................................................68
Nguyen v Nissan Casting Australia Pty Ltd.......................................................................................................56
Noack v BGC (Australia) Pty Ltd ................................................................................................................. 62, 81
Non-Ferral (NSW) Pty Ltd v Taufia ..................................................................................................................116
Norfolk CC v Secretary of State for the Environment......................................................................................78
Notcutt v Universal Equipment co (London) Ltd..............................................................................................77
Pacey v Modular Masonry...................................................................................................................................63
Phillipa v Carmel........................................................................................................................................118, 123
Plastic Injection Company v Wohling...............................................................................................................100
Popovski v Ericsson Australian Pty Ltd .............................................................................................................92
R. J Brodie (Holdings) Pty Ltd v Pennell...........................................................................................................49
Rasmsussen v Kilpatrick Green Holdings Ltd.................................................................................................103
Ratnayake v Sir Charles Gardner Hospital ............................................................................................................78
Re McWilliam; Ex Parte Olsen..........................................................................................................................103
Re Monger v Ex Parte Ivey.................................................................................................................................101
Re Monger; Ex Parte Cargo Enterprises Pty Ltd ...........................................................................................100
Re O'Malley v Comcare........................................................................................................................................95
Rees v Australian Blue Asbestos Pty Ltd............................................................................................................91
Roberts v Dorothea Slate Quarries Co Ltd........................................................................................................90
Rodios v Trefle......................................................................................................................................................125
Skywest Airlines Pty Ltd v Barnett ...........................................................................................................104, 124
Spalding v Commissioner for Main Roads.........................................................................................................91
State Energy Commission v Van Zyl....................................................................................................................91
State Rail Authority v Bauer J and Tyrell ..........................................................................................................67
Stewart v Western Sydney Area Health Service................................................................................................68
Stockwin v Cablesands Pty Ltd............................................................................................................................63
Tasovac v New South Wales Police Service.......................................................................................................68
Thorp v Wanneroo City Council...............................................................................................................101, 108
Toolan v Metropolitan (Perth) Passenger Transport Trust ..........................................................................103
Tran v Calum Textiles Pty Ltd.............................................................................................................................56
Trigger v The Australian Telecommunications Commission..........................................................................80
Tsarkiroglou and Co Ltd v Noblee Thorl Gmbh................................................................................................76
Turner v Sawdon and Co......................................................................................................................................75
Tyrell v State Rail Authority ................................................................................................................................68
Viliami v National Springs, A Division of Hendersons Federal Spring Works Pty Ltd..............................................116
Waghorn v South Blackwater Coal Limited ..............................................................................................................75
Water Act 1992 (NT). ...........................................................................................................................................116
Waugh v Newcastle Mater Misericordiae Hospital........................................................................................125
Weeks v Harbourworks Clough ...........................................................................................................................14
Wilson v Wilson's Tile Works Pty Ltd..................................................................................................................54
Woods v WM Car Services (Peterborough) Limited ............................................................................................65
WorkCover Corporation v Liang Da Ping.......................................................................................................115
Zickar v MGH Plastic Industries Pty Ltd...........................................................................................................93
Page: v
STATUTES
Accident Compensation Act 1985 (Vic) ......................................................................................................passim
Accident Compensation Act 1987(Vic)...............................................................................................................97
Disability Discrimination Act 1992(Cth)............................................................................................................64
Freedom of Information Act 1992 (WA),...........................................................................................................10
Industrial Arbitration Act 1940 (NSW ...............................................................................................................67
Industrial Relations Act 1988 (Cth)...................................................................................................................118
Industrial Relations Act 1996(NSW)............................................................................................................ 67, 69
Migration Act 1958 (Cth). ..........................................................................................................................115, 116
Police Act (WA)...................................................................................................................................................118
Water Act 1992 (NT) ............................................................................................................................................116
Work Health Act (NT)..................................................................................................................................... 64, 66
WorkCover Queensland Act 1996(Qld).................................................................................................70, 71, 97
Workers Compensation Act 1926 (NSW).........................................................................................................114
Workers Compensation Act 1987 (NSW ................................................................................... 67, 98, 114, 123
Workers Rehabiliation and Compensation Act 1986 (SA) ......................................................................passim
Workers Rehabiliation and Compensation Act 1988 (Tas).............................................................................98
Workers Rehabilitation and Compensation Act 1988 (Tas) ...................................................................98, 114
Workers Rehabilitation and Compensation Act 1998 (Tas)............................................................................73
Workers’ Compensation Act 1912-1981(WA)..................................................................................................90
Workers’ Compensation and Rehabilitation Act 1981 (WA).................................................................60, 62, 63
Workplace Agreements Act 1993 (WA)..............................................................................................................22
Workplace Injury Management and Workers Compensation Act 1998 (NSW)...........................................66
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 1
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Discussion Paper One
Negotiation and Power in Conciliation and Review of Compensation
Claims
Introduction
In June 1993 the Western Australian Liberal Government (the Government) amended
the Act to inter alia:
1. Abolish the Workers’ Compensation Board and introduce a “non adversarial”
dispute resolution system;1
2. Limit the parties right to legal representation in disputed claims;
3. Modify the rules for legal costs, so that in general each party would bear their
own dispute costs.
4. Narrow the ability of workers to make claims for stress related disabilities and
abolish travel claims;
All of these changes had an effect on the resolution and management of disputed
compensation claims and will be discussed below.
At the time of its demise the system administered by the Board was portrayed in the
Chapman Report as a Kafkaesque legal and bureaucratic maze. The Report asserted;
Simple Chambers Applications, which deal with disputes of an urgent nature for commencement of
weekly payments, proceed by way of preparation of an Application and Affidavit to the (Workers’
Compensation) Board prior to the hearing.
Preparation of an Affidavit is beyond most workers, requiring, by necessity, to seek legal advice. In a
similar manner, formal legal procedures apply for Pre-Trial conferences and Callovers.2
1 In addition the Government provided for an increase in the amounts of compensation payable for the
first four weeks of incapacity. There was an increase in the "prescribed amount from $88,000 to
$100,000 and the creation of extra items in the second schedule of the Act which allowed for lump sum
payments. Compensation for disabilities sustained travelling to and from work was abolished. The
amendments in relation to dispute resolution took effect in March 1994.
2 The Chapman Report p 2 (emphasis added).
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 2
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
In order to modify the method of dispute resolution the Government established in
place of the Board the Conciliation and Review Directorate (the Directorate). The
creation of the Directorate was an explicit attempt to move away from the
“adversarial” mode of adjudication of disputes towards an "administrative" “nonadversarial
system."3 The directorate consists of a three stage dispute resolution
process, initially by Conciliation Officers, then to a Review Officer and finally to a
Compensation Magistrate. Appeals are allowed to the Supreme Court. The actual
processes are discussed in detail below.
Conciliation Officers
Conciliation Officers4 are required to resolve compensation disputes in a manner that
is fair, economical, informal and quick, without regard for legal technicalities.5 Once a
dispute has been notified to the Directorate (by a worker, employer or insurer) the
Conciliation Officer is required to act on the matter within 14 days. It is not always
possible to convene a conciliation meeting within that time and often the support staff
of the Directorate will contact the parties to discuss the parties’ availability for
conciliation as a means of commencing the process.
3 These terms will be discussed in more detail in chapter three, however the term "adversarial" was
probably used in the Chapman Report to denote the use of aggressive confrontationalist tactics by
lawyers rather than as a descriptor of any court processes. The terms "administrative" as used in the
Chapman Report denotes a system which limits any form of advocacy and involves a process of decision
making by reference to existing paper work and file information rather than via trial or hearing.
4 Conciliation Officers are appointed under section 104A(1) of the Act. Section 177 of the Act provides
that Conciliation Officers are officers of WorkCover and are subject to the Public Service Management
Act 1994. Under section 177 (3) the duties of the officers of WorkCover are as prescribed and directed
by WorkCover. However section 104B(2) provides that a Conciliation Officer is not subject to direction
as to a decision to be given in a particular matter. In relation to administrative matters the Director of
Conciliation and Review is responsible to the Executive Director of WorkCover. In relation to matters
concerning the resolution of disputes the Director is responsible directly to the Minister of Labour
Relations.
It follows that the Minister cannot directly affect the decisions of the Conciliation Officers but can
influence the procedures that are used to resolve disputes. Because the Executive Director of
WorkCover also has control of administrative matters in relation to the Directorate, the Executive
Director can affect the efficiency of the Directorate in relation to the supply of administrative staff.
Directorate staff are staff of WorkCover and therefore subject to direction by the Executive Director of
WorkCover.
5 See section 84P of the Act. For a discussion of the concept of fairness see Chapter two under Mediation.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 3
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Sometimes the Conciliation Officer may contact one or both parties by telephone to
explore whether the matter can be settled without a conciliation meeting or to see
whether some preliminary issue can be resolved.6 “Telephone Conciliation” have
become an integral part of the conciliation.
Conciliation Officers do not “hear” the matter or take evidence. The parties are not
put on oath and witnesses are not generally called. Notes made by the Conciliation
Officers during the conference are placed on the Directorate file. Formal reasons for
any orders made are not given although a conciliation certificate records the
proceedings.7
If a conciliation meeting is convened neither party is entitled to be legally represented
other than in exceptional circumstances, namely where the parties agree and where
the Conciliation Officer consents.8 Persons who do not hold legal qualifications may
represent parties at any time. No orders for costs can be made at a conciliation
meeting. The intention of the conciliation meeting is to attempt to resolve the matter
on an informal basis. “Mutual Agreement” is the key to the process.
Conciliation Officers have limited, but important, adjudicative powers. These include
the capacity to order weekly payments up to a maximum period of ten weeks and to
order payment of medical expenses of up to $2000. Significantly, Conciliation
Officers do not have power to cease or reduce payments under section 60, 61 or 62
and must rely on the process of conciliation to achieve an alteration to the quantum of
weekly payments. If agreement cannot be reached under these sections the matter is
referred to a Review Officer. Conciliation Officers can refer matters that raise a
conflict of medical opinion to a medical assessment panel.
6 The Chapman Report p 12. Those lawyers in this jurisdiction who have discussed these issues with the
writer have expressed concern that the Conciliation Officers who use the telephone as a means of
gathering information or for dispute resolution may not impart all of the information gathered to the
parties and, by failing to do so, may breach the rules of natural justice.
7 The parties can view these notes and other documents on file after conciliation.
8 See section 84Q of the Act. The writer appeared at a conciliation meeting where the worker was
suffering from severe anxiety and was unable to attend. The respondents to the claim agreed that
liability was not in issue, the only live issue being which insurer of the employer should pay. In that
case the disability occurred over a period in which the employer had changed insurers.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 4
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Conciliation under the Act is compulsory, regardless of the issues or complexity of
the claim.
Review Officers
Review Officers hear matters referred from the Conciliation Officers that have not
been settled or which were not subject to orders at conciliation.
The Review Officers are appointed in the same manner as the Conciliation Officers
and are subject to the same degree of control and direction. Review Officers need not
be legally qualified. They are public servants rather than judicial officers. Unlike
Conciliation Officers, they have unlimited power to make orders for payments under
the Act.
Parties to review hearings may not be legally represented unless there is a question of
law to be resolved and the Review Officer considers legal representation is
appropriate. Save in exceptional in circumstances the costs of review hearings (like
conciliation meetings) are borne by the parties.
Review Officers can hear evidence and can refer matters to medical assessment
panels. Although a Review Officer is required to proceed in a manner that is
informal, they are bound, to act according to natural justice. Review Officers have
greater formal procedural powers than do Conciliation Officers. They are able to
administer an oath or affirmation and are required to give reasons in writing for their
decisions if requested by the parties.9 Proceedings before the Review Officers are
recorded and then transcribed if required for appeals.
Compensation Magistrates
In contrast to Conciliation and Review Officers Compensation Magistrates must be
legally qualified,10 as they hear appeals from decisions of the Review Officers “where
a question of law is involved”. 11
9 See section 84ZB of the Act.
10 Compensation magistrates are Stipendiary Magistrates who are selected by the Chief Stipendiary
Magistrate to act as the Compensation Magistrates pursuant to section 113(4) of the Act.
11 See section 84ZN of the Act. There is some suggestion that this section may allow for questions of fact
associated with the question of law to be considered. See Bednarczk v Natcorp Investments Ltd
(Formerly Wilcox Mofflin Ltd) unreported SC (WA) SCL 970363S 38/96 23 July 1997 in particular
Franklyn J at 6.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 5
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Legal representation of the parties is permitted before the Compensation Magistrate
and most appeals do in fact involve lawyers. Generally no evidence is given on
appeal. The unsuccessful party pays the costs, except where the appeal is made by
the employer/insurer and the worker is unsuccessful. 12 Workers are liable for costs
when they instigate the appeal and are unsuccessful.
The Supreme Court
The Supreme Court is authorised to hear appeals “on a question of law” from the
Compensation Magistrate. This right of appeal is more circumscribed than an appeal
of Review Officer decision to a Compensation Magistrate.13
Since 1993 the numbers of compensation cases that are appealed to Supreme Court
has declined. There are a number of reasons for this. First, the costs of appeal to the
Supreme Court, when added to the cost of appeal to the Compensation Magistrate,
increases the financial burden to workers in particular. Second, “litigation fatigue"
arising from the two stage appeal process will test the endurance of individual
litigants. Third, because the right to appeal is contingent on an error of law, the
Supreme Court is generally concerned with whether the Review Officers or
Compensation Magistrates misdirected themselves rather than a consideration of the
merits of the case.14
“Repeat players” and “One shotters” in Workers’ Compensation
Disputes
Compensation insurers are “repeat players” in the system. Workers are often “one
shotters” who have little or infrequent contact with the system.
12 Amendments effective from 5th October 1999 provide that an unsuccessful worker is not required to pay
costs where the insurer appeals a decision of a review officer.
13 An appeal from Review Officer to the Magistrate is pursuant to section 84ZN of the Act which allows
for an appeal “where a question of law is involved” whereas the appeal to the Supreme Court under
section 84ZW can only be made “on a question of law”. A discussion of these issues appears in Guthrie,
R (1998) Workers’ Compensation Western Australia, Butterworths Sydney paras 2890-2891.
14 The writer has conducted a survey of approximately 80 of the 470 appeals made to date. Broadly this
confirms that limited nature of the matters canvassed. Details of the disposition rates of those appeals
are contained in appendix one.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 6
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Repeat players have experience of the process and know the procedures. They have
access to specialist advisers, and are able to develop informal networks with
Directorate officials.15
They are able to access the value of claims with greater certainty than one shot
players are, and so have a greater capacity to choose which claims to resist.16
Moreover, they have considerable political and financial resources.17
Galanter opines that repeat players can obtain better legal representation than oneshotters.
He asserts;
...There is also a massive difference in the range and quality of services provided: the professional is
organised to provide a wide range of services to Repeat players and a much narrower range to One
shotters.18
Early research for example, shows that there are likely to be differences in the
competence of lawyers engaged by insurers and workers.19 The legal representation
given to workers is often directed at dealing with a particular issue or problem and
therefore is remedial in nature. The services provided to insurers tend to be more
continuous and preventative. The comparison of the capacity of parties to cope with
litigation has given rise to some colourful analogies;
15 Galanter, M. (1974) ‘Why the “haves” come out ahead: Speculations on the limits of legal change’.
9(2)Law & Society 95 at 99.
16 For example, cases involving small amounts of medical expenses, arising out of some form of treatment
that is controversial often fit this category. An insurer may push these matters to review in order to
prevent overuse of this modality. The costs of the hearing may be out of proportion with the small
amount claimed but future claims may be prevented by this challenge.
17 Galanter reflected on the American position, noting that repeat players were larger, richer and more
powerful than one off players. As will be discussed below the Australian position in relation to
compensation insurers appears to be similar. The characteristics of repeat players correspond with the
features of expert/information power that will be discussed below. Foucault the French philosopher
noted the connection between knowledge, information and power. “We should admit …that power
produces knowledge and not simply by encouraging it because it serves power or by applying it because
it is useful; that power and knowledge directly imply one another; that there is no power relation without
correlative constitution of a field of knowledge, nor any knowledge that does not presuppose and
constitute at the same time power relations” Foucault, M. (1977) Discipline and Punish: The Birth of the
Prison, Allen Lane London p27.
18 Galanter, M. (1975) 'Afterword: Explaining Litigation' 9 Law and Society 347 at 361(emphasis added)
19 Carlin and Howard noted that the use of lawyers is considerably less prevalent among lower than upper
classes in the United States. Lawyers representing lower class persons tended to be least competent
members of the bar and were often opposed to large firms serving wealthy individuals and large
corporations who claimed a large share of the best legal talent. The former available to lower class
clients, almost exclusively those in smaller firms, consequently were at the lower end of the quality of
training and academic achievement. The non-repeating character of the matters they typically bring to
lawyers often affected the service rendered to poorer clients. Carlin, J. E. and Howard, J. (1965) 'Legal
Representation and Class Justice' 12, UCLA Law Review, 381 at 385.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 7
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
...this distinction is between the casual participant for whom the game is an emergency and the party
who is equipped to do it as part of his routine activity. The sailor overboard and the shark are both
swimmers, but only one is in the swimming business.20
Power in compensation claims
Power inequality between the worker, employer, insurer and those who are required to
facilitate negotiations and resolve and settle disputes under the Act are matters of
considerable importance. The roots of power imbalance lie in the employer -employee
relationship. As Kahn-Freund asserts that there is an inequality of bargaining power which
is inherent and must be inherent in the employment relationship.21
Power has been described as the “actual or perceived ability of one person to exert
influence upon another person’s behaviour or thoughts.”22 Wade laments that power
imbalance “is repeated ad nauseam as reason for alleging the ethical unsuitability of certain
types of negotiations or meditations.”23 If ignored however power imbalances can result in
injustice or unfairness.24 Boulle refers to the “power concern” as twofold, both of which are
relevant to the resolution of disputed compensation claims. On the one hand as a matter of
policy; whether certain relationships are mediatable. On the other hand as a matter of
practicality; whether mediator strategies can deal with situations where one party is
overpowering or disempowered.25
Power imbalances are always present. In 1993 the then Minister for Labour Relations
observed that a particular clause of the Act was necessary to "ensure that insurance
companies cannot use their superior negotiating powers and threat of additional legal
costs to beat people into submission.”26
20 Galanter, M. (1975) 'Afterword: Explaining Litigation' 9 Law and Society 347 at 363 (emphasis added).
21 Kahn-Freund, O. (1972) Labour and the Law, London Stevens & Sons p 8.
22 Wade, J. H. (1994) ‘Forms of Power in Family Mediation’ Australian Journal of Family Law, 41 A
similar definition is given by Weber cited in Acland, A.F (1990)A Sudden Outbreak of Common Sense.
Managing Conflict through Mediation. Hutchinson Business Books New York p85. Luks has defined
the concept of power by saying that A exercises power over B in a manner contrary to B’s interests. See
Luks, S (1974) Power : A radical view Macmillan Press Ltd London p34.
23 Wade, J. H. (1994) ‘Forms of Power in Family Mediation’ Australian Journal of Family Law. 40.
24 NADRAC Discussion Paper p 29.
25 Boulle, L. (1996) Mediation Principles Process and Practice Butterworths Sydney p 57.
26 Western Australia Legislative Assembly Debates 2 November 1993 p5958 (emphasis added).
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 8
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
During litigation and negotiation the balance of power may change and is influenced by
many factors. Mayer has identified ten sources/forms of power in negotiation. These are;
Formal power
This power derives from a particular position in a structure. The Act confers decisionmaking
prerogatives and formal powers on the Conciliation and Review Officers and
the Compensation Magistrate.
Expert /information power
Expertise in a particular area creates power and is usually related to the fact that one
party has more information than the other does.
Associated power
This power is derived from having an association with some one with power.
Associated power may be present in the relationship between employers and insurers
or between workers and their legal or union representatives.
Resource power
The control over valued resources. This power has positive and negative
connotations. Resource power can include the ability to deny resources, or to force
others to expend them, as well as to be able to distribute resources.
Procedural power
The control over procedure, by which decisions are made, separate from control over
those decisions themselves.
Sanction power
The ability to inflict harm or to interfere with a party’s ability to realise his or her
interests.
Nuisance power
The ability to cause discomfort to a party, falling short of the ability to apply direct
sanctions.27 Either party to a dispute can exercise nuisance power. Most often the
ability of workers to make small monetary claims with potentially disproportionate
administrative and legal costs to the insurer are referred to as “nuisance” claims.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 9
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Habitual power
This power follows from allowing a particular state of affairs to continue. Habitual
power may reside with a worker where the worker is in receipt of compensation
payments and who is resisting an attempt to reduce those payments. It may be
apparent where an insurer is maintaining a denial of liability.
Moral power
The power that comes from an appeal to commonly held values connected to the idea
that someone is right.
Personal power
Personal attributes carry power. Self-assurance, the ability to articulate one’s
thoughts and understand one’s situation, one’s determination and endurance are all
features of personal power.
Whilst parties may have various forms of power, these may not always be exercised.
As will be shown below, in some instances insurers will have potential to exert
considerable power over a worker but may chose not to do so as this would not be in
the insurer’s long term interests. It is therefore useful to distinguish between potential
power that once exercised becomes actual power. Actual power is the ability to bring
about a certain outcome by the use of certain resources. Possessing greater potential
power increases actual power and increases the ability to achieve desired outcomes.28
Mayer’s classification of power can usefully be applied to compensation claims.
The exercise of power by Workers
Workers appear at conciliation and review infrequently and have little knowledge of or
interest in the dispute resolution system until they make a claim. Therefore, few workers
possess expertise in this area unless they have had multiple exposures to the system.29
27 Insurers often use the phrase "nuisance claim".
28 Ellis, D. and Wright, L. (1998) 'Theorizing Power in Divorce Negotiation; Implications for practice'
15(3) Mediation Quarterly 227 at 229-32.
29 Multiple exposure for a worker may well occur in a single claim where the claim involves some novel
point or special complexity. In cases of added complexity or novelty additional conciliation meetings
may be required in order to make clear the issues in dispute. Often if the same matter goes to review
there may be numerous preliminary reviews. In these complex or novel cases the worker may gather
expertise from this repeat exposure. Repeat exposure may inturn give a worker more knowledge,
information and expertise.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 10
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Expert or information power seldom rests with the worker, although they do have some
access to information power through the use of section 84K(4) of the Act. This section
allows workers to obtain “relevant documents” before an application is commenced.
Relevant documents include a range of documents such as medical reports, claims forms
and employment contracts.30 If the worker does not obtain access to relevant documents
before proceedings commence then some form of discovery or disclosure must be sought at
conciliation, a procedure with which they will have little or no prior experience.
Workers are less likely than insurers to understand the concept of legal privilege and
are more likely to surrender documents that may be adverse to their interest.31 Given
that Conciliation Officers are not bound by the rules of evidence there will be
occasions when documents that are privileged are exchanged. Preliminary letters of
advice from lawyers and trade unions to workers may well be disclosed.32 An
appreciation of sophisticated rules such as privilege may even escape the Conciliation
and Review Officers.33
30 Workers are seldom in a position to take advantage of this provision simply because most workers are
unaware of its existence.
31 The writer has received instructions from a number of workers following conciliation, in circumstances
where documents not normally discovered have been provided to the employer/insurers. These
documents included letters of advice from trade unions and lawyers who had previously assisted the
workers.
32 On occasions insurers have made available investigators reports either because the documents are not
privileged or because there is no appreciation of the fact that the documents may be privileged. The
Freedom of Information Act 1992 (WA), provides, generally, that public authorities must disclose
documents that relate to a decision made by them that affects (in this context) workers. The Insurance
Commission of Western Australia the largest insurer in Western Australia, is subject to the legislation.
Even if a non-government employer is not covered by the Freedom of Information Act 1992 (WA)
documents can be obtained via the SGIC if the employer holds a workers compensation policy with that
insurer. The worker would, prima facie, be entitled to any documents used by the SGIC to make a
decision on the claim, and this would include the documents submitted by the employer. In the case of
the State Government Insurance Commission, the Freedom of Information Act 1992 (WA) may require
the in SGIC to deliver up all documents relevant to a decision, thus exposing the SGIC file to more
extensive discovery. Delivery of all documents relevant to a decision may go further than normal
discovery requirements, because it may include some investigator's reports or other opinions that
insurers do not as a matter of course disclose.
33 For example in East Fremantle Town Council v Jakobson unreported CM (WA) 98/97 7 April 1998 a
Review Officer referred a matter to the Compensation Magistrate who was asked to rule on the
admissibility of video evidence despite these types of cases having been the subject of much case law
and commonly in issue at the Directorate.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 11
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
However, in some cases workers may hold information exclusively.34 Occasionally,
where taxation or social security documents are relevant in order to verify earnings,
the employer/insurer will have to rely on the worker to consent to the release of these
documents.35 This power when exercised by the worker may be frustrating for the
insurer who has doubts about the workers credibility. It means that the worker’s
claim is either accepted on this point, or the insurer is put to the expense, of
(potentially fruitless) investigations. Although there is evidence that review hearings
are often adversarial, restrictions on interrogation at conciliation and review can make
it difficult to “put the worker to proof”.36
Lack of information diminishes expertise, whereas possession of expertise multiplies
information power.37 A worker who lacks information often also lacks expertise.
Maute has stressed that a party cannot evaluate the fairness of an option without
minimally adequate information about the law. A process that does not ensure that
each party has such information is likely to reinforce or aggravate existing power
imbalances.38 How is the worker to know what questions to ask, when to speak, when
to be silent or how to answer a difficult question? How is a worker to appreciate the
particular significance of some questions?
Having an association with those who have knowledge and expertise in the dispute
resolution process is an important means of gaining the skills to handle a claim.
Workers may derive some associated power through their connection with trade
unions, support groups and lawyers. As noted in the discussion in relation to costs in
chapter four, workers have to pay their own legal costs and medical report fees.39
34 For exa mple, details of the an unwitnessed accident or where the accident takes place outside the
employers premises and is witnessed by persons who are not co-workers. In these circumstances the
employer must rely on the worker to give information about the accident and details of witnesses.
35 See for example Summit Homes v Lucev unreported SC (WA) Full Court 67/95 3 April 1996 which case
discusses the relevance of taxation returns. Issuing a subpoena in time for a review hearing may not
provide the employer with sufficient time to investigate the information in these documents.
36 There is evidence that questioning during review is often aggressive.
37 Wade, J. H. (1994) 'Forms of Power in Family Mediation' Australian Journal of Family Law 40 at 46
38 Maute, J. (1990) 'Mediator Accountability: Responding to Fairness Concerns' Journal of Dispute
Resolution. 347 at 367.
39 These costs are often significant. Specialist reports regularly costs around $200.00 and sometimes up to
$500.00. In New South Wales it was noted that medical expenses associated with report fees averaged
$415.00, but these figures are probably conservative as the research obtained information from the
respondent insurers only. The cost to workers is likely to be higher, because often the worker will be
referred to more than two specialists. The survey assumed that only two specialists would be obtained.
Worthington, D. (1994) Compensation in an atmosphere of reduced legalism. Civil Justice Research
Centre Sydney pp 22-32.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 12
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
They generally have little resource power compared to most employers and insurers.
This lack of resource power may be partially offset in some cases by refusing to
negotiate, and threatening to go “all out” by single-mindedly putting all their energy
into pursuing a claim, especially where the insurer is seeking to reduce or terminate
payments (see “nuisance power” below).40 Insurers may not always be able (due to
workload) to give an equal amount of attention to each claim. Workers are also more
likely than insurers to make use of the media where an injustice is perceived.41
Resource power merges with procedural power. Those who have the resources
usually have knowledge of procedures to exploit those resources.
The unrepresented worker has little control over and is often unsure of procedure.42
Conciliation and review procedures may be informal but knowledge of the process is
still required to obtain the best strategic position. In this regard Wade observes that
one strategy may be;
to ensure that the ‘opposition’ spends more time, money and inconvenience on a war of attrition. The
opposition is well aware of the ploy, identifies it and refuses to co-operate.43
The “opposition” in the compensation context is the insurer or employer who is more
likely to recognise a ploy to slow down proceedings. A worker may attempt to slow
proceedings where reduction of payments is the issue, but will have to contend with
the insurers superior knowledge of procedure. A worker familiar with the conciliation
procedure may be able to exert some control over this process to gain vital strategic
information. For example, in an application to reduce or terminate payments; by
insisting that the insurer make out its “case”.
40 Galanter, M. (1974) ‘Why the “haves” come out ahead: Speculations on the limits of legal change’. 9 (2)
Law & Society 95at 99 in footnote 10 citing the work of Ross wherein Ross has suggested that an image
of irrationality may be a bargaining advantage. Ross dealt with negotiations in relation to automobile
claims. Ross, L. H. (1970) Settled out of Court: The Social Process of Insurance Claims Aldine Press
Chicago pp156 and 170.
41 Pollard, J. (1995)’Injured worker tests law.’ The West Australian 7 August p 14. highlights one case
where a worker obtained media coverage for his claim. Insurers usually only obtain media coverage
when premiums are an issue. For example Ruth, J. and O’Malley, S. (1993) ‘Business hit hard as
insurance fees soar’. The West Australian 24 August p 34.
42 1995 Review p 23.
43 Wade, J. H.(1994) 'Forms of Power in Family Mediation' Australian Journal of Family Law 40 at 48.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 13
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Workers have little sanction power over insured employers or self-insured employers.
There is no provision in the Act penalising the employer and insurer for slow decision
making and a worker cannot make any significant threats against them. However a
worker does have some sanction power over an uninsured employer.44
If an uninsured employer fails to pay the worker’s claim within 30 days of an order
for payments, the latter may apply to the General Fund for payment. When such a
claim is made WorkCover pays the worker’s claim but has a right to recover money
paid from the General Fund from the assets of the employer. Making a claim against
the General Fund alerts WorkCover to the employer’s failure to insure. WorkCover
can then prosecute the uninsured employer. In this respect slowness in payment by
the uninsured employer can be matched with the rights (power) given to a worker
under section 174 of the Act to make a claim against the General Fund. In this respect
an “all-out” approach by a worker in these circumstances gives the worker some
access to sanctions against the uninsured employer.
Nuisance power for a worker is the ability to be able to delay or defer proceedings,
seek adjournments, by seeking alternative medical opinion or changing rehabilitation
providers at the insurer’s expense. In addition a worker can also issue applications
(for review of payments or travel expenses often overlooked or neglected by insurers)
at every turn and delay any recovery sought by the insurer. These tactics may provoke
an insurer into making an offer to settle.45
Workers also exercise nuisance power in not accepting settlement proposals. The
limited ability to redeem/commute weekly payments makes it hard for an insurer who
wishes to “get a worker off their books”. By the same token insurers can also refuse
to redeem or settle a claim. They can then offer the less financially attractive option
of a Schedule 2 payment.46
44 There is a statutory obligation to insure under section 160 of the Act.
45 Most potently it is the ability to be able to resist an application under sections 60, 61, and 62 of the Act
at conciliation, relying on the fact that the Conciliation Officer does not have the power under the Act to
vary or review payments downwards without the consent of the parties.
46 Amendments to the Act in 1993 increased the benefits to workers under Schedule Two of the Act that
provides for payments of lump sums if a permanent disability is suffered. The range of disabilities
covered now extends to back, neck and pelvis injuries, disabilities not previous covered by Schedule 2.
Discussion Papers to Accompany Report on the Implementation of the Labor Party Direction Statement
Presented to the Workers’ Compensation & Rehabilitation Commission Page: 14
By Mr Robert Guthrie, Research Fellow, Institute for Research into International Competitiveness, Curtin University of Technology
Ironically, the Government’s attempt in 1993 to eliminate “nuisance” claims by
restricting redemptions has made it harder to finalise claims for small ongoing weekly
payments for partial incapacity. As a consequence workers and insurers have
frequently settled compensation claims by common law discharge. The end result is
to skew negotiation away from conciliation towards traditional forms of distributive
bargaining, the trademark of personal injury clams.47
In this regard Astor and Chinkin note;
The parties in a mediation (or conciliation) may be able to draw on several of these sources of power.
There may be an enormous imbalance in the level of power each holds, but it is unlikely that any
party will be totally powerless. The power to refuse to co-operate in mediation (and conciliation) at
least may be present...What appears to be intransigence may, in fact be desperation..48
Desperation combines with habitual power where a worker who is receiving payments
resists applications for review made under sections 61, 62 and 60. The party seeking
to change the |
Posted by Reader at 9:10 AM, 28/7/2007 |
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Very Important Re: Guthrie Report
| Please dont let the longevity of the Guthrie report make you skimp through reading it. Print it out and read it bit by bit if you have too. I have found it very positive and it will help you if you have any problems with the system. |
Posted by Me at 10:50 AM, 30/7/2007 |
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Doctor
It is a pleasure to introduce to you the members of your new Medical Board in this issue of the Newsletter. Many of you are no doubt aware that the new Medical Practice Act 2004 came into effect in August 2005. The Act brought with it a new composition of the Board and the then Minister chose not to reappoint any members of the previous Board. Neither did any previous Board members stand for the three positions elected by the profession.
So it is that the Board is on a steep learning curve. The challenges before the new Board are very great. The Board is charged under the Act with “Regulating the practice of medicine in South Australia. In doing so we are required by legislation to have as our primary regard “the public interest”.
However, it has always been my view that this is the modus operandi of all medical practitioners, who must always act in their patient’s best interest. This is not empty rhetoric – doctors must constantly successfully manage the innate conflict between personal interest and the patient interest. Were it not otherwise no surgeon would suggest conservative management. The cornerstone of good medical practice remains giving patients the advice that our families or we would wish to receive if it were us.
As society becomes less tolerant of professionalism and self-regulation it is very important that all doctors recognise that the administration of the Act by the Medical Board is still self-regulation. Complaints against doctors are being heard and judged by your peers. The expansion of the Board has brought with it more representation from the community. This has great potential to improve the accountability and transparency of the Board’s processes which will be essential to its survival. For continued self regulation cannot be depended upon.
The government’s StatutoryAuthorities Review Committee has reported its finding and the Board is currently preparing a comprehensive response to the recommendations. We look forward to sharing our response with the profession and public of South Australia in the near future. At one hearing the Committee commented on the possibility that the Medical Board be disbanded and its functions taken over by the Department of Health. Similarly the draft report of the Federal Productivity Commission suggests a federal administrative body administer registration processes for all of the health and allied health professions nationally. One would hope that the many arguments against such change will be heard.
To maintain public confidence in what we do we must not only be fair and transparent but be seen to be fair and transparent. Our primary areas of responsibility are the registration of doctors and the hearing of complaints against them.
The Board is keen to open a dialogue with its principle stakeholders. These are many but the primary ones are the profession, the public and the government. The Board is planning to hold a series of open forums to initiate a closer and more open relationship with these and other groups. Please support us in our obligations to register only doctors capable of maintaining the high standards of health care in South Australia and to speed up and improve the transparency and fairness of the complaints process. The pressures on us all are great. Your Board will work hard to do its part.
In closing, may I thank you for the trust that you have placed in me and my colleagues through the electoral process and I thank the Board for the confidence they have had in me by recommending to the Minister my appointment as Presiding Member.
Dr Trevor J Mudge, Presiding Member
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Posted by Anonymous at 2:28 PM, 23/12/2007 |
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Useful Links
SA Unions worker survey
Have your say
WCT Recent Decisions
Workcover Forum
workcover victims
Media Mikes Privatisation agreement
Federal Return to work Monitor report
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Courts Home Page
Liberal Party Media Page
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