Personal injury claims

Personal injury claims

Australia has seen three major trends in workplace injury and illness.

  • The first came in the 1980s with the advent of RSI or Repetitive Strain Injury, a term first coined in Australia. Whether or not the rise of RSI in the 80’s was due to intense litigation or the increase in clerical and process work, it was reported in near epidemic trends and considered by many to have forever changed the nature of claims-adjusted workers’ compensation premiums by making insurance coverage more expensive for employers.
  • The second trend began to appear in the early 1990s with the rise of “stress” claims. Similar to the RSI-boom of the 80’s, it is not entirely clear whether the causes of this trend were due to the changing and more complex nature of industrial relations in the workplace or the continued increase in litigation, or a combination of both.
  • At the end of the 90’s the third trend, that of the impact of secondary psychological claims and psychosocial factors, began to emerge.

What is clear is that these three significant trends in the history of workers’ compensation in Australia have influenced and impacted the way that claims are managed and the overall increased cost of claims.

It was only in the late 1980s, however, that the realisation that returning workers to work and maintaining productivity should be the most important aspect of compensation schemes. From that time, schemes began to introduce the earliest form of return to work frameworks and the occupational rehabilitation industry was born. From the mid-90s onwards, modern workers’ compensation legislation began to catch up. In 1998, NSW introduced the Workplace Injury Management and Workers’ Compensation Act and for the first time in Australia’s history, employers and employees had a mandatory requirement to comply with a rehabilitation program.

Every jurisdiction in Australia now has some form of compliance clauses designed to foster and encourage the return to work (RTW) process. Yet the process of lodging claims and waiting for liability to be determined is often a critical barrier because RTW is still dependent upon the liability process, with exceptions such as NSW and ACT where provisional liability allows for the approval of medical and rehabilitation costs prior to a decision being made on the claim’s liability. For this reason, market leaders in early intervention make no distinction between compensable and non-compensable injuries and illnesses and strive to deliver timely and effective strategies pre-claim.

The future of the Australian workplace is continuing to change. Figures presented at the self-insurer’s conference by Comcare suggest that there are now 1.4 million Australians working from home and 3.5 million casual or part-time workers. Work is becoming less secure and more transient in nature.

Since the Global Financial Crisis (GFC) the state of uncertainty in business has never been greater. Managers and professionals report that they take less leave and when they do, they report being unable to “switch off” from work. Australians work longer hours than most OECD countries (up to 55 hours per week) and are increasingly connected to the workplace and therefore struggling to maintain an adequate work-life balance. Technology such as email and smart-phones are contributing to this connectedness, resulting in workers feeling “on-call” 24/7.

One of the emerging buzzwords that captures this trend is “workplace resilience” – simply stated, the ability to respond or bounce-back from difficult or challenging situations or workplace environments. With studies conducted suggesting that one in four Australians consider themselves to be “stressed” at work, is Australia on the verge of a new wave of resilience-related psychological illness? If workplace resilience is decreasing at the same time as a sharp increase in the level of workplace change and uncertainty brought about by the GFC and tough market conditions, then what will be the impact on future trends in injury and illness and ultimately workers’ compensation in Australia? There are many downsides to a less resilient workforce, with studies conducted by Monash University indicating reduced productivity, greater absenteeism and less adaptability to change.

There are two other factors that are likely to have an increasing impact on the future of workers’ compensation in Australia, that of the ageing workforce and the increase of obesity.

As the workforce continues to age, with a greater proportion of workers than ever before above the age of 55, there is likely to be a blurring of the lines between work-related injuries and illnesses and congenital or age-related conditions. There is no conclusive data on the issue, but there is evidence to suggest that aged workers, especially in blue-collar environments, will be more susceptible to musculoskeletal disorders and injuries than their younger colleagues.

The other factor to consider moving forward is that of child and adult obesity, and the impact it will have on the workplace. According to the World Health Organisation (WHO) childhood obesity is continuing to increase at an alarming rate. Overweight and obese children are likely to stay obese into adulthood and are more likely to develop non-communicable diseases such as diabetes and cardiovascular disease as well as musculoskeletal conditions such as osteoarthritis. In addition, they have a higher risk of psychological and social problems such as discrimination, victimisation and bullying.

Obesity not only has significant health and social impacts, but also considerable economic impacts. In 2007-08, the Australian Bureau of Statistics (ABS) reported that one quarter of all children and 61% of adults were overweight or obese. In 2008, the total annual cost of obesity for both children and adults in Australia, including health system costs, productivity and carers’ costs, was estimated at $58 billion.

If this trend continues, the future will no-doubt become increasingly impacted by overweight and obesity related health conditions as more at-risk workers enter the workplace. Under the blanket no-fault system in Australia’s workers’ compensation framework, it is reasonable to assume that there will also be an increase in compensable injuries and conditions in which non-work related factors such as obesity contribute.

Given this landscape, the potential for future workers’ compensation injury and disease trends will no doubt shift as the modern workplace dynamic increasingly impacts on employee health and wellness. Workplaces will not only need to adapt in terms of ensuring they meet their duty of care under modern work health and safety legislation, but they will also need to consider their early intervention strategies. That is why market leaders forging ahead in the area of injury management consider that the most important phase to managing any injury or condition is in the pre-claim phase, long before any intention to lodge a claim is even made by a worker. The cost associated with avoiding a greater number of potential workers’ compensation claims through a pre-claim early intervention strategy is, in their experience, far lower than the cost of managing claims post claim.