Claim declined—decision overturned by Appeal Authority—legislative changes in interim—entitlement lump sum payments lost—claim for ‘wrongful action’—claim for backdating of independence allowance—no authority to backdate—delay in settling ‘wrongful action’ claim—apology and token payment made—Accident Rehabilitation and Compensation Insurance Act 1992, ss 54 and 135
In 1992 the complainant lodged a claim with ACC for medical misadventure arising from an accident in 1976. This was formerly the Accident Compensation Commission, also called the ACC. The claim was considered under section 135 of the Accident Rehabilitation and Compensation Insurance Act 1992 as a claim to be considered under the 1982 Act. However, it was declined later in 1992. Following an unsuccessful review of that decision, the Accident Compensation Appeal Authority upheld the claim some five years after it had first been lodged. In the interim, the legislation governing accident compensation had changed, and the complainant discovered he was no longer eligible for lump sum payments because he had failed to make the required election under section 147 of the Act within the statutory timeframe.
Although he had been granted an independence allowance in accordance with section 54 of the Act as a consequence of the Appeal Authority’s decision, the Corporation argued it had no legal authority to backdate the payment of the allowance. The complainant argued that the Corporation ought to have advised him of the timeframe for elections with respect to lump sum payments and its failure to do so had deprived him unreasonably of his entitlement. He therefore sought alternative compensation under the ‘wrongful action’ provisions.
The Corporation initially refused to accept there had been any ‘wrongful action’. The complainant then put forward evidence that a number of claimants in similar circumstances had been paid lump sums in the past and alleged he had been treated inconsistently. The Corporation acknowledged that it had made such payments. However, those payments had later been held by the Court to have been ultra vires (Taufua v ARCIC 259/97 and Willis v ARCIC 83/97). It was therefore not prepared to do something for which it believed it had no legislative authority.
After examining the issues and seeking further explanations from the Corporation, it advised that it was not able to backdate the independence allowance because section 54(1) provides that ‘every person who has cover under this Act is entitled to receive an independence allowance…’. The Corporation argued that the complainant did not have cover under the Act until the Appeal Authority ruled that he did. Accordingly, there could be no backdating beyond the Appeal Authority’s decision. In this respect it was noted that the amendment to section 54(7) of the Act did not come into force until after the decision on the complainant’s entitlement to the independence allowance was made. Section 54(7)(a) did not therefore apply in this case.
In the light of further representations, the Corporation agreed that it should accept some responsibility for the delay in settling the claim. It was not prepared to offer a payment based on the complainant’s estimate of the amount to which he believed he was entitled on the grounds that it had no legal authority to do so. However, in recognition of some of the delays which had occurred in the handling of the claim and which could be attributed to the Corporation, it agreed to offer an apology and a payment for ‘wrongful action’. In making this offer the Corporation made it clear that it was not conceding that it had a duty of care to inform the complainant about the timeframe for making elections for lump sum payments. Having regard to the general level of settlements of claims for ‘wrongful action’, the offer did not appear unreasonable and the investigation was concluded on this basis.
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