Federal public servants seeking workers’ compensation payouts face the biggest crackdown in decades.

A federal government review of the $1.2 billion Comcare insurance scheme has urged sweeping reform to reduce the number of dubious claims for psychological injuries, payouts for dodgy therapies, doctor shopping and outright fraud.

The review has made more than 147 recommendations to rewrite the legislation on Commonwealth public sector compensation claims, with the aim of getting injured bureaucrats back to work and ending their “passive” reliance on compensation.

The taxpayer-funded insurer lost more than $500 million in the 2011-2012 financial year as the number of claims for psychological injuries in the public sector – many related to accusations of bullying and harassment – increased.

According to the review’s two reports by Melbourne barrister Peter Hanks, QC, and former Defence Department boss Allan Hawke, the “long tail” of the Comcare scheme means an individual claim can exceed $2 million.

The review, ordered last year by Workplace Relations Minister Bill Shorten, cited a case of taxpayers paying nearly $30,000 for massage therapy that had “no curative effect” and another of a bureaucrat in Brisbane who was flown to a Buddhist meditation retreat in Alice Springs to treat his anxiety disorder.

The reports do not call for cuts to benefits for injured workers but urge a shift from a payout-oriented scheme to one that emphasises rehabilitation and a return to work.

The report says claims for psychological injuries have increased by 30 per cent in the past three years and are four times higher in the federal public service than for other employers.

Mr Hanks says compensation for these claims should not be paid for more than three months without a diagnosis by a properly qualified medical practitioner.

The senior barrister also wants an end to payouts for mental stress caused by imaginary factors.

“It is an unfair burden on employers to make them liable to pay compensation for a psychological injury that is caused by an employee’s fantasising rather than by any aspect of employment,” he wrote.

Among the recommendations is a no-fault, provisional liability that would cover injured workers for a three-month rehabilitation period and a shift in jurisdictions for workplace dispute resolution from the Administrative Appeals Tribunal to Fair Work Australia.

Mr Hanks wrote that Comcare’s legislative framework, the the Safety Rehabilitation and Compensation Act, was supposed to be beneficial to workers but the insurer had a duty to spend taxpayers’ money wisely.

He urged greater vigilance on doctors who supported compensation payouts, saying health practitioners should be ”held accountable for their conduct”, so ”they do not exploit what is, in effect, a publicly funded scheme by overcharging, overservicing or providing services that do not meet basic professional standards”.

Mr Shorten said he would consult ”stakeholders” about the reports.

“It is vital that the Comcare scheme is focused on early and effective intervention to promote recovery of injured workers. It is also critical that employers and Comcare are pro-active in supporting injured workers from the point of injury, during rehabilitation and when they return to work,” he said.

Recent cases

• Commonwealth public servant compensated, after a court appeal, for injuries sustained during a “vigorous” sex session in a motel room on a work trip.
• Underperforming Canberra public servant compensated after she claimed one-on-one counselling sessions constituted bullying.
• A public servant in Brisbane was flown to Alice Springs for a Buddhist meditation retreat to treat his anxiety disorder.
• Canberra government worker paid $29,000 for massage treatment that had “no curative effect’’.

(Source: Noel Towell, SMH, 30 March 2013)

The UK Court of Appeal is currently considering whether relatives of servicemen killed in Iraq can sue the MOD

The following article is reprinted from the BBK Blog in the UK. It describes developments in the UK’s Court of Appeal in relation to military compensation claims for servicemen killed in Iraq.

Three Court of Appeal judges are to make a decision in the next week about whether the relatives of soldiers killed in Iraq in unarmoured vehicles can pursue claims against the Government.

Private Phillip Hewett, 21, died in July 2005 when a Snatch Land Rover was blown up. The same accident also killed 2nd Lt Richard Shearer and Private Leon Spicer. Similar explosions also claimed the lives of Lance Corporal Kirk Redpath in August 2007, and Corporal Ivano Violino in September 2007.

The MOD has been accused of being negligent in failing to provide armoured vehicles. The relatives of the servicemen killed are arguing that the provision of armoured vehicles could have saved their lives.

The MOD have said that decisions about battlefield equipment are for politicians and military commanders and cannot be the subject of a negligence action.

It certainly seems a difficult case to argue against; our troops go to war and risk their lives every day; they work under tremendous pressure in extreme conditions. Is it too much to ask that the MOD protect them as far as they possibly can by providing them with sufficiently protected vehicles and armour so that the risks inherently associated with going to war are minimised? There are, of course, always going to be casualties in a war but is it not the MOD’s job to ensure that the number of these casualties is kept as low as possible and that the equipment being given to our troops does not contribute to producing them?

On the other hand, supporters of the MoD’s position will say we are fighting a war, the MOD has updated vehicles when weaknesses have been highlighted, and they have taken vehicles out of commission when they are deemed as too unsafe for our troops to use; we only need to look at the upgraded Snatch Land Rover vehicles for confirmation. Wars are inherently more dangerous now than they have ever been; can the MOD really be expected to cater for every eventuality?

There are perhaps arguments for both sides here but one thing is for certain; if the decision comes back saying that it IS possible to sue the MOD for a failure to provide armoured vehicles this may have far reaching effects on the number of military compensation claims being pursued by injured soldiers, and by relatives of those killed in service.

(Source: Vicki Reid, BBK, 26 June 2012)

About Rushmore Forensic

Andrew Firth is a forensic accountant who has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas. He specialises in economic loss and loss of earnings calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.