Sweeping Changes to the Workers Compensation Scheme: The Controversial Goudappel v ADCO Constructions Pty Ltd

In 2012, the NSW Parliament introduced radical, sweeping changes to the Workers Compensation Scheme. This article discusses the high profile case of Mr Goudappel, an injured worker caught by retrospective amendments which sought to remove his right to lump sum compensation.

Mr Goudappel suffered crush injuries to his left foot and ankle during a workplace incident in April 2010. He made a claim for compensation shortly afterward and began receiving weekly benefits and payment of his medical expenses.

In August 2011, Mr Goudappel was assessed as having a 6% Whole Person Impairment (WPI), a standardised classification system for measuring injury and ongoing disability.

On 20 June 2012, Mr Goudappel made a claim for lump sum compensation against ADCO in respect of his WPI which at the time entitled him to a payment of $8,250.

Unfortunately for Mr Goudappel, on 27 June 2012, the Workers Compensation Legislation Amendment Act 2012 (NSW) was assented to with retrospective effect. Lump sum claims for a WPI of 10% or less were barred unless they had been brought before 19 June 2012, up from the 1% threshold.

The changes took Mr Goudappel, workers and solicitors by surprise, with the Bill passing barely two weeks after a Parliamentary Inquiry Report into the Scheme. The Report suggested cost cutting measures in the face of a $4.1 billion deficit, with some funds to be redistributed towards more seriously injured workers.

ADCO’s insurer, GIO, considered the amendments and concluded that Mr Goudappel was not entitled to lump sum compensation as he had not specifically claimed this prior to 19 June 2012. Clause 15, schedule 12, of the amendments provided:

Lump sum compensation

The amendments made by Schedule 2 extend to a claim for compensation made on or after 19 June 2012, but not to such a claim made before that date.

Mr Goudappel took the dispute to the Workers Compensation Commission, where it was heard by President Judge Keating. Workcover NSW appeared as an intervener.

Mr Goudappel argued that the words “claim for compensation” should be interpreted as a claim for compensation generally, as this would least interfere with his pre-existing rights. GIO argued that the absence of the words “lump sum” before “claim for compensation” in the body of the text was a mere drafting error and could be corrected by reference to the purposive approach to interpretation. Though tribunals and courts are traditionally loath to give effect to retrospective laws, in this case Judge Keating considered that the intention of Parliament was sufficiently clear and could not be ignored.

Mr Goudappel appealed to the NSW Supreme Court, where the case turned on the issue of when his right to compensation arose. Their Honours held that the relevant time was when the injury occurred. GIO argued that the legislation sought to introduce certainty by limiting the number of future claims, and therefore required a specific claim. However, the Court disagreed, concluding that as Mr Goudappels’ injury occurred in April 2010, his claim was not barred.

With respect to their Honours, this author prefers the finding of Judge Keating, on the basis that a WPI cannot be calculated until an injury has stabilised. Nor are insurers able to accurately factor in costs of future claims as they are not in the habit of proactively sending workers to have their WPI assessed. Finally, the wording of the Act refers to a “claim for compensation” rather than a “right to compensation”.  Despite agreeing with the decision at first instance, this author is critical of the retrospective nature of these amendments which are both contrary to the rule of law and caught workers such as Mr Goudappel by surprise.

The case has now progressed to the High Court of Australia, with leave to appeal being granted on 11 October 2013. Workers in Mr Goudappel’s situation are currently bringing lump sum claims but an overturn would change this once again. With significant financial interests at stake, insurers, workers, solicitors and employers await the final decision with bated breath.

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