Law change prompts judge to warn of ‘desperate people’ left with ‘no rights’

The head of the court tasked with dealing with workers’ compensation claims has warned staff to be ready to deal with desperate people with psychiatric injuries whom he said would have no rights under the scheme after a series of controversial cuts to the system.

A memo sent by the president of the Personal Injury Commission, Judge Gerard Phillips, to senior staff at the court in February tells them to prepare for potentially harrowing encounters with injured workers because of changes passed by the Minns government.

Phillips said the court would probably see an influx of injured workers seeking to represent themselves as a result of the changes. Some would not be receiving an income or medical treatment.

“They will probably be told by a lawyer … they have no rights but attempt in any event to pursue a case here,” he said.

“How we handle that circumstance without aggravating the injured person will be critical. They will have no weekly payments and may or may not be getting medical treatment. So, they may be desperate.

“What I am saying is we will probably from next year have a group of injured claimants with psychiatric problems trying to represent themselves. This could be harrowing for staff and members alike.”

The government passed significant changes to workers’ compensation laws last year after a months-long battle with the Greens and Coalition. The changes significantly increased the injury threshold at which a worker can receive long-term payments and introduced new barriers for accessing compensation by requiring people who make a workplace bullying claim to first prove it in the NSW Industrial Relations Court.

Despite opposition from unions and a pre-election pledge by most current Labor ministers to protect injured workers, the government insisted the changes were necessary to protect the financial viability of the system in the context of skyrocketing rates of psychological claims and pressure on business premiums.

In a statement, a spokesman for the NSW Industrial Relations Sophie Cotsis said: “The reality is, without reform, the workers compensation system was headed towards collapse, unable to provide income support for any injured workers.”

“The reforms are backed by the largest ever spend on improving workplace mental health in NSW history and new powers for the Industrial Relations Commission to intervene and resolve workplace disputes,” he said.

“Workers will continue to have a clear pathway to make psychological injury claims.”

However, the Phillips memo states that as a result of the changes, a large group of claimants who would previously have received compensation will be excluded. The higher bar for long-term support under the new scheme meant “very few will qualify” for payments, he wrote.

And, because some claimants will have to first prove their injury in the IRC, they may have spent a year or more already in the system.

“My concern is that by the time a claimant has been to the IRC and gets here, they may be very difficult to deal with,” he wrote.

Phillips’ memo was sent in the context of sector-wide concerns about the impact of the workers’ compensation scheme on claimants following a damning report into complaint handling by the NSW insurance regulator. The Sydney Morning Herald revealed last year the report, by the former Federal Court judge Alan Robertson SC, had recommended substantial financial payouts and personal apologies to a group of injured workers after finding it seriously mishandled their cases and added to their trauma.

“I think this is an issue right across the space,” Phillips wrote, noting agencies including iCare and the regulator SIRA needed to be aware of not “pushing people from pillar to post”.

A separate document obtained by the Herald also raises questions about oversight in the workers’ compensation scheme more broadly.

A transcript of a speech given by Phillips in September to a forum of medical assessors states he had convinced the Health Care Complaints Commission not to investigate complaints about them.

Medical assessors are charged with assessing the level of an injured worker’s permanent impairment to determine whether and for how long they will receive compensation.

The document, which metadata shows was created by Phillips, states he had been in ongoing discussions with the independent agency arguing it had “no power or jurisdiction over your activities”.

While the government’s reforms did not affect healthcare complaints or the regulation of medical assessors, it introduced a single-assessor model, meaning it is more difficult to appeal decisions made by assessors.

“The Personal Injury Commission is expected to have effective processes in place to manage psychosocial and other hazards in the workplace,” the spokesman for Cotsis said.