Court decision provides CTP insurers with welcome guidance when assessing skin injury claims

The Late Summer Abawi (the claimant) sustained injuries in a motor accident on 8 December 2017, including superficial lacerations to her wrist. The claimant brought a claim under the MAIA.  

Allianz (the insurer) decided  the claimant had sustained only threshold injuries related to the accident. The dispute was referred to the Personal Injury Commission (PIC) for determination. 

Medical Assessor Home determined the claimant’s lacerations were not related to the accident and her other injuries were minor injuries (now threshold injury) within the meaning of the MAIA.   

The claimant died in 2021 for reasons unrelated to the accident. Her claim was pursued by her estate (the estate).

The estate successfully lodged a review of the Assessor Home’s certificate. The Review Panel (PIC Member Nolan, Assessor Moloney and Assessor Couch) revoked the certificate and determined the claimant’s lacerations were related to the accident and were not threshold injuries. The Review Panel held:

[64] To exclude an injury to the skin because it “connects, supports or surrounds other structures” is inconsistent with the meaning intended to be ascribed to this threshold’s provision’s phraseology when read in the statutory context, which is evidently concerned with the exclusion of soft tissue injuries sustained to the connective tissues of the musculoskeletal system, which do not involve injury to nerves or a complete or partial rupture of tendons, ligaments, menisci or cartilage.

[65] Accordingly, lacerations to the skin would not be a threshold injury.

The insurer sought judicial review of that decision in the Supreme Court. The insurer submitted that a construction of the Act that resulted in a skin laceration being a ‘threshold injury’ was consistent with both the objects of the Act and the Minister’s statement in the second reading speech. At first instance, Justice Griffiths dismissed the insurer’s application and found the Review Panel had not erred in finding that an injury to the skin was not a threshold injury. His Honour noted legislators had provided a detailed list of what constitutes a soft tissue that did not include the skin. His Honour concluded that if it had been Parliament’s intention to exclude the skin this would have been expressly noted.

The Insurer sought leave to appeal. The main issue was the construction of section 1.6 of the MAIA. 

The Court of Appeal delivered judgment on 2 May 2025. His Honour Associate Justice Kirk, with Associate Justices Adamson and Stern in agreement, upheld the insurer’s appeal, set aside the Review Panel’s certificate and reinstated the original certificate of Assessor Home.

Justice Kirk found that on a proper, textual construction of section 1.6(2) of the MAIA, soft tissue was defined as ‘tissue a significant characteristic feature of which is connecting supporting or surround other structures or organs in a physical sense, such as to warrant that tissue being characterised as having that function’ [at 71] (emphasis added). In His Honour’s opinion, this definition was not likely to include most organs. 

Justice Kirk was not persuaded that the purposive and contextual arguments presented by the parties should lead to a different conclusion. His Honour also disagreed with the primary judge that either the Regulations or the Guidelines can be considered in construing s 1.6(2) of the MAIA.

Notably, the claimant sought to argue that the construction which was ultimately accepted by the Court created some uncertainty about injuries to the skin causing nerve damage. The insurer conceded, and Justice Kirk accepted, the fact that injury to skin is included in the definition does not mean that severe injuries such as deep lacerations will always be no more than soft tissue injuries. Significant skin injuries – caused by burns or road rash for instance – may well fall outside the definition of soft tissue injuries because they involve ‘an injury to nerves’.

Two factual issues arose from the Court’s construction of section 1.6(2). 

The first issue was whether a ‘significant characteristic function’ of skin is to connect, support or surround other structures or organs, to bring it in line with the definition of soft tissue as construed by the Court. As the Review Panel had noted in this matter, skin serves several functions. The claimant’s representatives conceded that, based on the construction of section 1.6(2) adopted by the Court, skin should be characterised as soft tissue.

The second issue was the claimant’s contention that if the appeal was upheld, the dispute should be remitted to the Review Panel to determine whether the scarring caused by the lacerations involved any injury to nerve endings (which would have the effect of the injury falling outside the definition of soft tissue). It was contended that neither Assessor Home nor the Review Panel had considered this issue. Justice Kirk observed Assessor Home had in fact made a finding that there was no evidence of nerve injury and that the Review Panel did not suggest to the contrary. Accordingly, there was no reason to remit the dispute to the Review Panel.