TPD: Can Employability Assessments address whether a member meets the TPD definition?

The question of whether or not an Employability Assessment can, or should, provide an opinion on whether an individual member meets a specific TPD definition arises regularly.

Opinion evidence – expert opinion exception

Opinion evidence is prima facie not admissible (s76 Uniform Evidence Acts) because it is unreliable and potentially usurps the Judicial decision making role of interpreting facts.

An exception to the general opinion rule is expert opinion evidence (s79). Where there is a field of specialised knowledge (field of expertise) and the person has that specialised knowledge because of their training, study and experience (an expert) and provides an opinion within their expertise (expert opinion) it is likely to be sufficiently reliable to assist the Court and is therefore admissible.

Ultimate Issue Rule

There is a long history of argument that an expert should not comment on the ultimate issue for determination because that goes further than just providing an opinion within their field of expertise and, at that point, becomes inadmissible because it usurps the Judicial role.

Because of that view of the Ultimate Issue Rule expert opinions often went right up to the point where it was (hopefully) obvious what the expert thought the answer to the question for the Court was, but they did not write the concluding sentence or paragraph.

However, a proper analysis of the law relating to the Ultimate Issue Rule shows that it was always more accurately characterised as an example of the requirement that an opinion not be a mere ipsa dixit (because I say so!) statement. As the Full Federal Court stated in Arnotts v TPC:

“It is often said that an expert cannot give an opinion as to the ultimate fact that the court has to decide. This is inaccurate, as experts, especially valuers, often give evidence as to the ultimate fact, and in many cases the question whether that fact exists can be answered only by experts … What the rule really means is that an expert must not express an opinion if to do so would involve unstated assumptions as to either disputed facts or propositions of law.” (See: Arnotts Limited v Trade Practices Commission (1990) 24 FCR 313, 350 (Lockhart, Wilcox and Gummow JJ) quoting R Eggleston, Evidence, Proof and Probability (2nd ed, 1983), 147–148.)

Given the above understanding the ultimate issue rule was specifically abolished (s80) in 1995 in NSW and in other jurisdictions which apply the Uniform Evidence Act. In jurisdictions which technically retain the rule it’s proper application should not constrain an expert in the way it was so often suggested it did.

Ultimate Issue Rule – Dead but Not Buried

Despite it’s abolition, and the fact that it didn’t actually mean what it was so often cited to mean, the principles underlying the Ultimate Issue Rule are often cited to seek to constrain experts from applying a legal standard to facts, including facts which are established by their opinion.

To be clear, the expert who provides an opinion may apply a stated legal standard to facts founded on their opinion in order to fully explain their opinion, but is not entitled to purport to apply the law to the facts generally. (See Allstate Life Insurance Co v ANZ Banking Group Ltd (No 6) (1996) 64 FCR 79, esp at 83-84.)

So can an Employability Assessment provide an opinion on whether or not a member is TPD?

Yes. So long as the opinion fully expresses all of their assumptions and the reasoning process by which they have applied their expertise to those assumed facts, and how they have applied the explicitly stated legal standard to the facts reached by their opinion.

The complicating factor is that the application of the legal test of TPD to the facts of any given case usually requires opinions on at least 3 of the 4 different factual elements to be proved by expert opinion evidence (medical and physical functional capacity, psychological functional capacity, vocational / employability capacity, labour market factors), which no single expert is likely to be in a position to address.

However, this can be overcome by the application of the principle of transparency and statement of assumptions. While it will of course be far easier to do this in a multi-disciplinary assessment, it can still be done by each expert commenting on one of the elements of an Employability Assessment so long as they make clear the assumptions they are relying upon in relation to each other element when expressing that ultimate opinion.

General Application

This note is of general application to Expert Evidence, but the issue does seem to arise most often in the context of Employability Assessments.

Bruce Smith

Questions or feedback welcome to: or

This is not legal advice.  I regularly conduct discussion groups on discrete issues in different areas of expert evidence to promote thinking amongst expert witnesses and those who retain them.  It’s been suggested my short synopses might be of interest to others.  If they are I’ll post more.

Seminars: I regularly present seminars on different areas of expert evidence for the Law Society of NSW, sometimes with experts in those fields.  I am open to presenting these seminars in-house to larger firms and insurers for whom sending large numbers of people to the Law Society seminars is not practical.

Next Law Society seminar is 12 September 2017:

Dealing with clients with (possible) impaired mental capacity: with Therese Catazariti of 13 Wentworth, Professor Coyle and Alicia Tyler psychologists.


TPD: “Labour Markets” v “Reasonably Accessible” – Part 2

Thank you for all of the email feedback.  A number of people asked whether any labour market evidence was required if the “reasonably accessible” labour market test does not apply.


“Employability” is invariably stated to involve the existence of “real” and not “hypothetical” “jobs”.  A review of the Authorities suggests that the key factors the Courts consider when asking whether or not proposed work options are “real” and not “hypothetical” are whether they are jobs:

  1. which are within the member’s physical capacity; and
  2. which are within the member’s psychological capacity; and
  3. which have tasks requirements which are within the members transferable skills based on their education, training and/or experience (ETE); and
  4. which actually exist in practice; and
  5. which the member would have a real prospect of obtaining, performing and holding in the open labour market;
    1. given their capacity as above, and,
    2. given where the jobs are located relative to them (reasonably accessible).

Real Jobs (Existence) and Real Prospects

Labour market evidence goes principally to the issues of the “existence” of real jobs which the member can safely perform physically, psychologically and within their transferable skills, and to the “prospect” that they can actually obtain such a job, including both the assessment of their prospect as a job seeker for a job which exists and the investigation of whether those jobs exist where they live.

A person may be capable of obtaining and performing work as a miner, but if they live in the middle of a capital city it may not be a reasonably accessible job.

Viewed in that light the “reasonably accessible” element is an additional limiting factor on the “labour market” tests of existence and prospects, and severable from it.

Evidence of existence and prospects required

Given that the Insurer bears a reversed evidentiary onus to establish “employability” after the member makes a prima facie case by reference to their pre-injury or illness job I would suggest that labour market evidence establishing existence and prospects is still required.

Relevant Labour Market map-of-australia-3d-model-max-obj-3ds

That raises the question of what labour market may be considered to establish existence and prospects.

Given that an insurance contract should be given a business like interpretation considering the language, commercial circumstances and objects of the contract, if the “reasonably accessible” test based on home address is excluded that would arguably encompass a labour market including at least the State or Territory of the member’s current residence, possibly any State or Territory of residence since the date for assessment, and once the concept of moving for work is accepted then arguably all of Australia.

Bruce Smith

Questions or feedback welcome to: or

This is not legal advice.  I regularly conduct discussion groups on discrete issues in different areas of expert evidence to promote thinking amongst expert witnesses.  It’s been suggested my synopses might be of interest to others.  If they are I’ll post more.

Seminars: I regularly present seminars on different areas of expert evidence for the Law Society of NSW, sometimes with experts in those fields.  I am open to presenting these seminars in-house to larger firms and insurers for whom sending large numbers of people to the Law Society seminars is not practical.

Next Law Society seminar is 12 September 2017:

Dealing with clients with (possible) impaired mental capacity: with Therese Catazariti of 13 Wentworth, Professor Coyle and Alicia Tyler psychologists.




TPD: Reasonably Accessible Labour Markets

lma picThe assessment of the reasonably accessible labour market arises in employability assessments in TPD, as well as in earning capacity assessments at common law or in workers compensation.

However, because the substantive legal principles and issues for determination in TPD are different to those at common law the application of the vocational assessor’s expertise to the TPD problem must also be different for the opinion to be relevant, reliable and admissible.  Merely adopting the standard rehabilitation style report is clearly inadequate in a TPD case. (see Justice’s Ball’s interlocutory decision rejecting such a report in Erzurumlu v Kellogg Superannuation).

While a reasonably accessible labour market test always applies in common law cases it may apply in TPD cases.

“Unable to”: The issue is highlighted by Hannover Life Re of Australia v Cesario Collella [2014] VSCA 205 at [34].   The policy term was “unable to do any work”.  Overturning the Judgment at first instance the Victorian Court of Appeal found that imposing a test of “the existence of work ‘which is reasonably accessible  in the market place and in an area in which it could be expected an insured in the position of the claimant could reasonably apply’ … went too far”.

The legal test was “unable to” which did not require a job in a reasonably accessible labour market.

This means that the question of a reasonably accessible labour market is not necessarily inherent to the definition of TPD, as it is at common law, but may or may not be a requirement depending on the terms of each policy.  It also suggests that the specific labour market factors which must be considered may vary from policy to policy.

“Unlikely ever to”: The Courts generally apply a reasonably accessible labour market test to “unlikely ever to” definitions.  However, unlike common law cases in which the reasons for applying a reasonably accessible labour market test are clear, in many TPD cases it is just assumed.

The Courts have (apparently) adopted and applied the common law view by way of an implicit argument that a reasonable interpretation of the policy does not envisage the member would be required to move address to seek work.  The member’s current address and the reasonably accessible labour market are therefore factors relevant to the “likelihood” of the member ever working again.

While the above interpretation is clearly open, it is not clear that it has been fully tested, and nor is it clear that it is generally appropriate to apply that test to “unlikely ever to” policies without closer analysis (given that it is not necessarily an inherent criteria of a TPD definition per Collella).

For example, it may be open to argue that a reasonable commercial interpretation of a TPD contract would be to extend the concept of assumed motivation to exercise residual capacity to include an assumed motivation to move in order to get work.  This is something that people do across Australia every day and many statutory compensation schemes now make this assumption.  If this reflects current views of what is reasonable that is arguably relevant to the interpretation of a TPD policy.

Also highlighting this question is the issue of which address to use when a member moves after the date for assessment?  Does the “likelihood” relate to the labour market accessible from:

(i) Their address at the date for assessment?

(ii) The address the member has moved to?

(iii) Either address ( ie would the likelihood of work in either labour market exclude them from the TPD definition?

Further, how does this evidence that the member chose to move sit with an underlying assumption that you need to review a specific reasonably accessible labour market because people don’t move, and what if they’ve moved to an area of lower likelihood of employment?

A lot of interesting questions to consider, and hopefully see determined by the Courts, regarding this important but often misunderstand and unexplored expert issue in employability and TPD.

Bruce Smith

This is not legal advice.  I regularly present short seminars on very discrete issues in different areas of expert evidence to promote thinking amongst expert witnesses in those areas.  It’s been suggested my short written summaries might be of interested to others.  If they are I’ll post more.

Civil Liability: Defendants must prove real jobs exist in accessible labour market

December 2015: Published in lawyers weekly logo

Civil Liability: Defendants must prove real jobs exist in accessible labour market – Lawyers Weekly Article

Despite a Plaintiff’s residual capacity to work, full damages will be awarded where no evidence of actual suitable jobs in a reasonably accessible labour market is tendered.

The Facts

The Plaintiff (Mr Kerney) was a 35 year old Telstra Technician who lived in Kandos NSW, about an hour from Mudgee.  He suffered significant injury to his right leg which was shortened causing a noticeable limp.  He had ongoing pain and a depressive disorder which fluctuated. He was unable to return to his physically demanding pre-injury job.

Post accident he obtained tickets and licences to operate a variety of equipment.  He accepted that he had a reasonable level of literacy and numeracy skills and would be able to undertake light work if it could be obtained, particularly providing he did not either have to sit or stand for lengthy periods of time. He accepted that if it were available sales work in an automotive or machine part selling area or assisting a real estate agent could be possible.  He had not found work, but had not looked outside of his local labour market of Kandos, NSW.

Reversed evidentiary onus of residual earning capacity

The Trial Judge (Kerney v Mead & Anor [2011] NSWSC 518 (Garling J)) and the Court of Appeal (Mead v Kerney [2012] NSWCA 215) both applied the reversed evidentiary onus of establishing residual earning capacity to the Defendant noting:

“it is not incumbent upon the injured plaintiff to prove what employment he or she is not incapacitated from performing. It is for a defendant who contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person.”

The Courts cited, inter alia, Magnou v Australian Wool Testing Authority [2007] NSWCA 357 at [20] and Kallouf v Middis [2008] NSWCA 61 at [50]; and see also Linsell v Robson [1976] 1 NSWLR 249 at 254-5, Rabay & Anor v Bristow [2005] NSWCA 199 at [73].

Proof of residual capacity to work

The Courts accepted that “the defendants had discharged by their evidence, the obligation to prove that there were occupations in which [the Plaintiff] was able to engage” for up to 15 hours a week including, hire car or taxi radio dispatcher; driving instructor; bus driver; desktop publishing operator; sales representative; or real estate property manager.

Reasonably accessible labour market – Mudgee but not Sydney

The Courts also accepted that the Plaintiff should have been willing to seek work in Mudgee, NSW as it was only an hour’s drive away, but the Defendant’s argument that the Plaintiff should have been assessed on the basis that he should have moved to a larger labour market such as Sydney to obtain work was rejected.

Evidence of Labour Market Investigations 

The Court then considered “whether the respondent could, as a practical matter, utilise that capacity in order to obtain work in the geographic area in which it was reasonable for him to seek work.” Citing Nominal Defendant v Livaja [2011] NSWCA 121 at [65]:

” … Because an individual has a physical and mental ability to undertake certain tasks, it does not necessarily follow that he has a significant residual earning capacity. Earning capacity must be measured by reference to the individual, when viewed with all his or her characteristics, in the labour market. When a person in middle age has spent all his or her life in a skilled or semi-skilled occupation which, as a result of injury, is no longer available, the identification of occupations which are theoretically available is only part of the task. There must also be a practical assessment of the likelihood of the individual obtaining employment in some such occupation …”.

The critical findings at Trial were that: “[214] There was no evidence of the state of the labour market in the Kandos and surrounding areas… I do not know whether there are more jobs on offer than there are applicants, nor do I know whether there are any employers in that region, who are sympathetic to employing men of [the Plaintiff’s] age who have disabilities. [215] There is no evidence … about the types and numbers of employers, the industries in which they work or operate, and the levels of their operation in the area … … [219] The evidence does not enable me to be satisfied that there is any practically achievable job which he can do on the open labour market in the general area in which he lives.”

That approach was upheld by the Court of Appeal which stated:

“[28] … the appellants claimed that as the primary judge deemed it reasonable for the respondent to travel daily to Mudgee for work, they had discharged their evidential onus by proving that the respondent was fit for the kinds of employment that could reasonably be expected to be available in Mudgee. [29]  The first difficulty with this submission is that there was … no evidence from which an inference could be drawn about the availability of particular types of jobs in Mudgee. … [30]  Even if an assumption could be made that there would be full-time sales representative, sales assistant and other jobs available in Mudgee, it cannot in my view also be assumed, in the absence of evidence, that there would be jobs fulfilling the criteria applicable to any employment of the respondent.”


The result: The total allowance for economic loss in that case was approximately $1 million.



A defendant’s evidentiary obligation “to establish what the plaintiff is capable of doing and what jobs are open to such a person” extends to showing that jobs within the plaintiffs physical, psychological and vocational capacity actually exist in the plaintiff’s reasonably accessible labour market, and that the plaintiff would have prospects of obtaining such employment taking into account all restrictions.

Elements of a Labour Market Analysis

The first element is proving the accessible labour market the plaintiff can reach in a reasonable travel time, and then providing key demographic information about that area, including information about the regional centres where relevant, and statistical information about the industries in each region.

The second is providing key statistical information about the numbers of people employed in the proposed job or work option in the labour market area, about the associated statistical earnings, employment outlook, and current numbers of job advertisements in that location for those jobs. 

The third element is establishing the existence of actual jobs of the kind the plaintiff is fit for within that labour market area and that the plaintiff would have realistic prospects of obtaining such a job through evidence of job advertisements or labour market contacts with employers in the region.

This process may seem relatively mechanical, but it is absolutely essential to showing that “theoretical” residual earning capacity is in fact “actual” residual earning capacity which should be taken into account when assessing damages.

Don’t fall short at the last hurdle

Proving residual earning capacity in civil liability (and other modified common law) cases will always require evidence of the reasonably accessible labour market. A defendant who overlooks this final aspect of their economic loss case may find that a plaintiff with clear residual earning capacity still being awarded full economic loss, so that a small anticipated award can easily become the largest head of damage in a case.



Kerney v Mead & Anor [2011] NSWSC 518 (Garling J)

Mead v Kerney [2012] NSWCA 215 (Macfarlan JA, McColl JA and Sackville AJA agreeing)

Rabay & Anor v Bristow [2005] NSWCA 199 at [73].

Magnou v Australian Wool Testing Authority [2007] NSWCA 357

Nominal Defendant v Livaja [2011] NSWCA 121 at [65]

Medical Expertise: Earning and Work Capacity, Employability and Occupational Medicine

October 2015:

Published in lawyers weekly logo

Medical Expertise: Earning and Work Capacity, Employability and Occupational Medicine

The major issue Insurer’s and solicitors face when obtaining medical evidence of earning capacity, work capacity or employability is that while most Independent Medical Examination Reports (IMEs) have pages of carefully detailed and reasoned analysis of causation, treatment, whole person impairment etc., when they address the question of capacity for work they merely have a simple statement such as; “Is unfit for pre-injury or similar heavy manual work, but would be fit for some suitable light duties”, which the Courts have consistently held to be legally inadequate.

MedicalExpertise_ECA_SQUARE.jpg.pagespeed.ce.BhmIfYE-LlFrustrating as this is, the reason this occurs in most IME reports is not that the medical practitioners involved have run out of interest, steam, or care for their work.  It is that they have run outside of their field of expertise.

It is important to remember that whilst medico-legal and earning capacity assessment reports are often thought of as being distinct from (liability) “expert reports”, the legal principles which apply are the same.

Approaching the question on that basis both explains the above noted problem, and how to avoid it.

A medical practitioners opinion is admissible because:

“s 79 (1) If a person has specialised knowledge based on the person’s training, study or experience, the opinion rule does not apply to evidence of an opinion of that person that is wholly or substantially based on that knowledge.” (Emphasis added) (see eg S79 “Exception: opinions based on specialised knowledge” Evidence Act 1995 (NSW), and S76 “the Opinion Rule”).

Applying that analysis, no part of a surgeon’s extensive training, study or medical experience involves considering in detail the functional interaction of health and work, nor studying and learning the varied functional requirements of hundreds of different occupations.  The same applies to specialist physicians in discrete fields such as e.g. neurology.  While these practitioners acquire some knowledge of this issue peripherally over time, it is not something they systematically study or train in.  Thus when a surgeon provides an opinion on earning or work capacity or employability, it is not really an opinion “wholly or substantially based on” their true field of specialised surgical knowledge, and so their opinion is necessarily restricted to the limited statements commonly seen.

Specialised knowledge of the interaction of work and health is the field of Occupational and Environmental Medicine (Occupational Medicine) which developed over time as a distinct recognised field of medical expertise, or specialty.  It is recognised by the medical profession through Fellowship of the Faculty of Occupational and Environmental Medicine of the Royal Australian College of Physicians (RACP), and registration with the Medical Registration Board of the Australian Health Care Practitioners Agency and / or Medicare.  Relevant specialised knowledge is also recognised by registration by the various statutory bodies around Australia responsible for returning injured people to work, see e.g. registration as an Injury Management Consultant (s45A Workplace Injury Management and Workers Compensation Act 1988 (NSW)).

While there is clear authority that any medical practitioner may legally comment on any medical issue, and the question of speciality is a question of “weight” to be given to the opinion rather than admissibility, long experience and common sense establish that if you want a full and detailed opinion which will withstand careful analysis and review on surgical treatment you ask a surgeon, on oncology an oncologist, and on earning or work capacity or employability an occupational physician.

Obviously, an occupational physician can only comment on the physical functional and medical capacity issues.  For a full analysis of earning or work capacity or employability you will also need a vocational and labour market assessment, and may also need a psychological assessment, and these will all need to be carefully integrated.  However, a detailed analysis and opinion by an occupational physician, which includes a statement of restrictions, of residual functional capacity for different activities and for hours of work, is the necessary first piece of the earning and work capacity and employability puzzle.

In summary, the relevant medical expertise on capacity to work is occupational medicine. If you want a useful opinion on that topic you need to start by asking an occupational physician.

Earning Capacity Assessments works with a range of occupational physicians to assess the medical and functional issues of earning and work capacity and employability.

The evidentiary onus of proving earning capacity

It is so easy to focus on the issue of liability when preparing to defend a claim for personal injury that the importance of obtaining the reliable (usually multi-disciplinary) expert evidence required to defend claims for lost earning capacity is often overlooked, despite economic loss often being the largest single head of damage claimed.

The result is often significant difficulty when attempting to negotiate an early settlement, or later in CARS or at trial when expert evidence to defend earning capacity is required.

Money hand LWA1

The defendant bears the evidentiary onus of proving residual capacity to earn

While the Plaintiff bears the legal onus of proving loss of earning capacity the Defendant bears theevidentiary onus of establishing that there is a real residual earning capacity and it’s likely value.

“…it is not incumbent upon the injured plaintiff to prove what employment he or she ‘is not incapacitated from performing’. It is for a defendant which contends that the plaintiff has a residual earning capacity to adduce evidence of what the plaintiff is capable of doing and what jobs are open to such a person:” see: Raby v Bristow [2005] NSWCA 199 at [73]

“The real defendant [insurer] must have resources from which evidence can be produced to show what sort of employment is within the residual capacity of an injured litigant, and what sum it is likely to produce.  It has, in my view, an evidentiary burden requiring it to adduce material of this kind.” See Kallouf v Middis [2008] NSWCA 61 at [53] citing  Linsell v Robson [1976] 1 NSWLR 249 (at 254 – 255). Continue reading

Grappling with issues in Total and Permanent Disablement (TPD)

Increased awareness amongst lawyers of group life TPD policies within superannuation packages, and reductions in benefits in statutory schemes, have lead to very significant increases in claims on and litigation over TPD policies in recent years.  The number of firms acting on both sides of the record has grown rapidly, with more and more lawyers now grappling with issues in TPD.LifeInsurance.jpg.pagespeed.ce.QRPegAOn0B

While the underlying factual questions about capacity for work or employability are the same as those that arise in other areas of personal injury law, the contractual basis of the cause of action means that the legal tests to be applied are particular to this field, and to the terms of each policy. Continue reading