Last month, the Victorian Ombudsman released a damning report into WorkSafe’s handling of workers compensation claims. The Ombudsman’s observation that the Victorian scheme ‘needs a better safety net for the vulnerable’ [pg. 5] will come as no surprise to many injured workers trying to access fair compensation in the aftermath of workplace injury.
Lawyers across Victoria take distressed calls every week from workers and their families experiencing frustration, financial stress and genuine hardship in dealing with insurer red-tape, delay, and ineptitude by claims agents. As the Ombudsman notes, when injured workers, who have suffered injury often through no fault of their own, seek fundamental entitlements such as medical expenses and weekly payment, these are ‘…are not merely files, numbers or claims; they involve people’s lives, and the human cost should never be forgotten’. [pg. 5]
Enquiries received by lawyers
The Ombudsman has uncovered the types of conduct by insurers which often leads to workers seeking legal advice with regard to their rights. Such conduct includes:
- weekly payments being terminated for workers still unfit for work in spite of supportive medical evidence;
- delays in receiving crucial benefits because certificates of capacity are repeatedly misplaced or lost at the hands of agents;
- delays in approving critical surgery in spite of medical support;
- cancellation or denial of important rehabilitation assistance such as gym/swim programs to assist in recovery from injury; and
- denial of re-training when workers’ injuries prevent them from getting back to their pre-injury jobs.
Annual stats managed by WorkSafe
WorkSafe through its insurer agents manages around 90,000 claims every year and, as agents of WorkSafe, the insurers have a clear statutory obligation to act fairly. The handling of many of these claims is not controversial and it’s good news that 80% of all claims are finalised within 13 weeks of injury. Certainly, most of the cases focussed on by the Ombudsman were more complex in nature.
The five insurer agents highlighted in the report
However, what’s clear is that the report raises serious questions about the conduct of all five WorkSafe insurer agents which at the start of the investigation were: Allianz Workers’ Compensation; CGU Workers’ Compensation; Gallagher Bassett Workers Compensation; QBE Workers Compensation and Xchanging Workers Compensation. Notably, QBE was replaced effective 1 July 2016 by EML. The adequacy and extent of WorkSafe’s oversight has also been called into question by the Ombudsman. Having examined whether there has been ‘an undue focus on profits by the insurers at the expense of the rights and well-being of individuals ' [pg. 6] and whether benefits are being denied or terminated in order to obtain financial rewards under WorkSafe remuneration arrangements, the Ombudsman has called for action by WorkSafe to review its incentives and better target its oversight.
Evidence of unreasonable decision-making was uncovered in the report across all five of the then agents. Many of the individual case-studies make for horrifying reading. All Victorians should be appalled by the statistic that 75% of 130 week terminations are overturned by the Court. Other aspects of insurer decision-making slammed by the Ombudsman include: inadequate internal review processes; allowing employers to improperly influence decisions; making decisions contrary to binding Medical Panel Opinions; maintaining unreasonable decisions even after conciliation; and unreasonable use of evidence in the decision-making process.
Recommendations to WorkSafe
The Ombudsman concludes her report with 19 recommendations including 17 recommendations to WorkSafe which are directed to improving and enhancing both day to day claims management and overall WorkSafe oversight. It’s good news for Victorian workers that all 17 of these recommendations have been accepted by WorkSafe together with an undertaking to implement immediate change. Only time will tell whether WorkSafe’s stated commitment to ‘re-double … efforts to improve service delivery to injured workers’ [pg. 167] will result in genuine change across all four of the previously appointed agents and new appointee EML.
The Victorian workforce - and indeed the Victorian community - deserves better. Fundamentally, workers across all trades and professions have, in the unfortunate event of workplace injury, the right to have their claims for compensation dealt with appropriately, fairly and reasonably by the insurers appointed by WorkSafe to handle their claims.