Ms Jacobsen was involved in a work related motor vehicle accident in 2021 while employed by BHP Nickel West Pty Ltd (BHP). She sustained minor physical injuries, was not diagnosed with any psychiatric illness, and returned to work shortly afterwards. In 2022, while employed by Thiess Pty Ltd (Thiess), she was involved in a second accident. She then manifested psychiatric symptoms that led to a diagnosis of PTSD and brought a workers’ compensation claim against Thiess. Thiess argued that liability for the psychiatric injury should be apportioned with BHP.
The claim went to arbitration. The arbitrator had before him 3 psychiatrists’ reports, who all accepted that both accidents contributed to Ms Jacobsen’s PTSD (although they disagreed as to the extent of that contribution). BHP was ordered to reimburse Thiess for 50% of the income compensation and health expenses compensation payable to Ms Jacobsen.
BHP appealed and the District Court upheld the arbitrator’s findings that BHP was obliged to partially reimburse Thiess.
The appeal turned on the interpretation of sections 6 and 34 of the Workers Compensation and Injury Management Act 2023 (WA) (the Act).
Relevantly, s 6 of the Act states that “a disease… is an injury from employment if the disease is contracted… in the course of the employment…; and the employment contributed to a significant degree to the contraction of the disease…”.
Section 34 of the Act allows apportionment of liability where the previous employer “is wholly or partly liable to compensate the worker because the injury is or may be from the employment during a period with” that employer.
Notably his Honour:
The parties did not dispute that Ms Jacobsen contracted PTSD following the 2022 accident, or that she was entitled to compensation for that injury, but BHP argued she had not contracted PTSD in the course of her employment with BHP because the symptoms did not manifest and a diagnosis was not made until her employment with BHP had concluded. Further, the evidence suggested that Ms Jacobsen would not have been diagnosed with PTSD if the second accident had not occurred. As Staude DCJ summarised:
The real issue … is whether a previous employer is liable to contribute to compensation for an injury from employment in the form of a disease where the disease was not contracted in that employer’s employment and would not have been contracted but for a further event in the course of employment with a subsequent employer.
Judge Staude had regard to the arbitrator’s findings on the expert evidence. His Honour found that it was open to the arbitrator to conclude that Ms Jacobsen contracted PTSD in the course of her employment with BHP, “notwithstanding the fact that its expression was delayed and may not in fact have occurred but for the second accident” (our emphasis).
The appeal from the arbitrator was dismissed.
This case clarifies that contribution can be sought from prior employers for injuries that manifest during subsequent employment. This issue will most commonly apply to psychiatric illnesses, but could equally apply to gradual onset physical injuries.
Subsequent employers will need to consider whether a prior employer can be joined, and prior employers will no longer be able to simply deny liability on the basis the injury would not have manifested but for the later incident with a subsequent employer.
However, subsequent employers will need to bring evidence – likely expert evidence – that an earlier injury caused the contraction of an injury, and the earlier employment contributed to a significant degree to the contraction of that injury.
Importantly, under s 34, employers and insurers need to reserve the right to seek contribution from an earlier employer by raising a liability question in the liability decision notice. Failure to raise contribution as a liability question may procedurally bar an employer and insurer from obtaining an arbitrator’s decision on contribution. While expert evidence may not be available at that early stage, if there is evidence to suggest that a worker’s injury might even in part stem from an earlier work accident or employment circumstance, employers and insurers should make sure they reserve those rights. You can read our article on s 34 here.
Please note that this decision is on appeal. We will update you when the decision on the appeal is available.
This article was written by, James Bordi Lawyer Insurance.