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”

“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:  BSmith@expertexperts.com.au or brucesmith@jackshand.com.au

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.

 http://eshop.lawsociety.com.au/index.php/catalog/product/view/id/3920

 

 

 

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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.

 

KEY LEARNINGS– LABOUR MARKET EVIDENCE IS CRUCIAL

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.

 

Links:

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

https://www.caselaw.nsw.gov.au/decision/54a635143004de94513d885e

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

https://www.caselaw.nsw.gov.au/decision/54a637b33004de94513d9c50

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

https://www.caselaw.nsw.gov.au/decision/549fbb4b3004262463b9e53a

Magnou v Australian Wool Testing Authority [2007] NSWCA 357

https://www.caselaw.nsw.gov.au/decision/549fd0a73004262463be006c

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

https://www.caselaw.nsw.gov.au/decision/54a635123004de94513d8797

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.