Court forces ACC to pay more legal fees
A ‘‘game changing’’ court decision to make ACC pay legal costs above a $3000 cap is a major victory for justice, an Accident Compensation Corporation advocate says.
The Crown entity was required to pay a maximum of $3000 in legal costs for cases it loses, irrespective of the actual fee incurred, since a ruling in 2008.
But a new ruling from District Court Judge Grant Powell orders ACC to pay $7500 of one successful claimant’s $8800 costs.
The cap had been a huge barrier to justice for claimants, ACC barrister and researcher Warren Forster said.
Judge Powell’s written decision, released last month, said Sarah Dickson-Johansen won an appeal against an ACC decision to deny her weekly compensation for a back injury in November 2016, which meant she was entitled to have her legal costs paid for by the entity.
ACC offered to pay $3500, which was rejected by Dickson-Johansen. Forster, who was her lawyer, said a reasonable contribution would be $7500 when the actual costs amounted to $8797.50.
The parties returned to court for a decision.
Judge Powell said he considered the wider issue of legal costs for successful ACC claimants as well as Dickson-Johansen’s case.
By taking the case to the court, Forster asked the judge to consider whether Parliament had intended a claimant ‘‘bear the financial cost of bringing a District Court dispute in a situation where ACC issues a decision that is clearly wrong’’.
ACC’s lawyer said $3500 was a reasonable amount for costs ‘‘in the circumstances’’ as it was ‘‘consistent with the applicable principles for the award of costs in this jurisdiction, given the length and complexity’’ of DicksonJohansen’s appeal.
Judge Powell decided District Court rules, where costs were based on complexity and expertise, should apply to ACC cases.
In his ruling he said recent research by Acclaim Otago, a support group for injured Kiwis, and a review by Miriam Dean QC had confirmed claimants needed legal representation and there was ‘‘much merit’’ in Forster’s submission that successful claimants ‘‘should not be out of pocket at the conclusion of the appeal process’’.
‘‘Instead such an outcome would be antithetical to the purpose of the 2001 Act.’’
An ACC spokesman said the entity accepted the court’s decision and did not expect it to have a significant financial impact.
‘‘The scale costs framework allows flexibility in appropriate cases and we believe there is a relatively small percentage of cases where costs will be higher than those payable under the former approach.‘‘
Forster said every client he had successfully represented against ACC had paid between $2000 and
$15,000 for legal costs with some forced into debt as a result.
The cost of appealing decisions prevented many claimants doing so, even though they might have had a strong case, he said.
ACC has increased the amount it spends on lawyers to fight its corner in recent years.
In the 2016-17 year $2.6 million was spent hiring lawyers outside of ACC, compared to $1.6m in
2014/15.
If clients were not likely to win more than $10,000 in a case, the burden of costs had meant it was not worth while to pursue, Forster said.
‘‘There is a consistent thread in this area of the law that when you take on ACC, even when you win, you lose.
‘‘The court has held that is not consistent with the purpose of the [ACC] Act .’’