AAMI v Patsalis: psychiatric WPI, inconsistent histories and judicial review

The claimant was rear-ended while stopped in traffic in Sydney on 25 October 2021. He alleged post-traumatic stress disorder (PTSD), major depressive disorder and physical injuries. The medical dispute referred to the Personal Injury Commission concerned the permanent impairment caused by the motor accident and whether it was greater than 10%.

Section 4.11 of the Motor Accident Injuries Act 2017 makes the greater-than-10% test particularly important to damages for non-economic loss. It is not the same question as threshold injury classification. A recognised psychiatric illness may be non-threshold while still producing 10% WPI or less, and a WPI percentage does not itself decide fault, economic loss, damages entitlement or claim value.

Physical and psychiatric impairment are assessed separately for this test and cannot be combined to move a claimant above 10%. AAMI initially conceded that psychiatric WPI exceeded 10% after considering an 18% assessment, but withdrew that concession after receiving further material.

The claimant had longstanding schizophrenia, episodes of psychosis and a previous workers compensation claim concerning alleged workplace bullying and harassment in 2012. The insurer relied on differences between accounts prepared for that claim and histories later recorded in the CTP matter.

The disputed material concerned whether schizophrenia had been in remission, the extent of earlier hallucinations, paranoia and depression, pre-accident work and social function, the continuing effect of the workplace events, whether the collision caused new PTSD and major depressive disorder, and the appropriate deduction for pre-existing impairment.

Some reports were difficult to reconcile. One psychiatrist produced reports on the same date for the workers compensation and motor accident matters, but addressed different diagnoses and causes. AAMI argued that the differences affected credibility and reliability and that contemporaneous records should be preferred where available.

The case shows why psychiatric WPI cannot be assessed from a single consultation or diagnosis label. The longitudinal history, purpose of each report, treating records, earlier claims, medication, admissions and functional evidence all require careful comparison.

A PIC Medical Assessor, who was a psychiatrist, examined the claimant on 3 October 2024 and issued a certificate on 28 October 2024. She diagnosed PTSD and major depressive disorder caused by the motor accident.

The assessor recorded the schizophrenia history, admissions, medication and workers compensation claim. She also recorded the claimant’s account of better pre-accident functioning, including handyman work, care for his mother, gym attendance, fishing, dancing, church fellowship and friendships.

The post-accident history included driving anxiety, nightmares, flashbacks, avoidance, poor sleep, loss of motivation, social withdrawal, deteriorating self-care, weight loss and support needs. The assessor addressed the recognised PTSD diagnostic criteria, separately identified the depressive symptoms and explained her causation opinion.

She assessed 28% current psychiatric WPI, deducted 5% for pre-existing psychiatric impairment and certified 23% WPI caused by the motor accident. That figure was an individual assessment on this evidence. It is not a tariff for PTSD, depression or a rear-end collision.

AAMI applied under section 7.26 of the Motor Accident Injuries Act 2017 for referral to a Review Panel. At that stage the President or Delegate asks whether there is reasonable cause to suspect that the assessment was incorrect in a material respect, having regard to the particulars in the application.

On 16 January 2025, the President’s Delegate declined the referral. The Delegate considered that the assessor understood the psychiatric history, competing reports and inconsistency argument, and was not satisfied that the material established reasonable cause to suspect a material error.

AAMI then sought judicial review. Its overlapping grounds alleged failure to answer a substantial argument, inadequate reasons, failure to evaluate all evidence, non-compliance with clause 6.41, an unsupported DSM-5 Criterion A conclusion and error by the Delegate in performing the gatekeeping role.

Judicial review was not a fresh psychiatric assessment. The Court’s task was to identify legal or jurisdictional error, not to decide which psychiatrist or WPI percentage it preferred.

The Court accepted that merely listing documents is not enough. A Medical Assessor must analyse the relevant material and reveal the path of reasoning. The reasons may be concise, but they must show genuine engagement with the significant evidence and arguments.

In this matter the assessor did more than reproduce a document list. She identified the reports supporting PTSD and major depressive disorder, noted the differing psychiatric material, set out the pre- and post-accident history and explained the functional change on which she relied.

Harrison AsJ found that the assessor understood AAMI’s inconsistency argument. She expressly recognised that practitioners had recorded different opinions and symptoms but did not regard the claimant’s reporting as materially inconsistent. It was open to her, using psychiatric expertise, to give the differences limited weight.

A Medical Assessor must consider a substantial and clearly articulated argument, but need not accept it. The statutory function is to form an independent medical opinion, not simply select a winner from competing medico-legal reports or discuss every sentence in every document.

AAMI argued that the collision caused little vehicle damage and that the claimant’s subjective perception could not establish exposure to threatened death or serious injury for DSM-5 Criterion A. The assessor considered the accident history and explained why, in her clinical judgment, the criterion was met.

The Supreme Court did not diagnose PTSD for itself. It held that whether the recognised psychiatric criteria were satisfied was a clinical question of fact for the medically qualified assessor. The Court therefore examined whether the assessor performed the statutory task and gave adequate reasons, rather than reapplying DSM-5.

For causation, the assessor explained why PTSD and major depressive disorder developed after the collision. For impairment, she took account of schizophrenia and deducted 5% from current psychiatric impairment. Her reasoning used the history, examination and contemporaneous material rather than relying only on one disputed report.

The decision does not mean subjective fear always satisfies Criterion A, or that low vehicle damage is irrelevant. Diagnosis and causation still require a reliable history, recognised criteria, clinical examination and evidence that addresses other possible causes.

Clause 6.41 of the Guidelines applicable to the assessment required certain inconsistencies between clinical findings and medical records or observations of non-clinical activity to be raised with the injured person, so the person could confirm the history or respond.

That procedural protection remains important where an assessor identifies a material inconsistency and proposes to draw a conclusion from it. In Patsalis, however, the assessor considered consistency and said she found no major inconsistency in the claimant’s reporting. She was not required to put every variation between historical accounts to him.

The ruling does not authorise assessors to ignore genuine contradictions. It confirms that not every difference between reports triggers clause 6.41. The significance of a difference depends on its subject, source, timing, purpose and possible effect on diagnosis, causation or impairment.

A section 7.26 referral decision does not finally decide the medical dispute. The President or Delegate asks whether the application establishes reasonable cause to suspect that the assessment was incorrect in a material respect.

AAMI argued that the Delegate went beyond that role by effectively deciding that the assessor was correct. The Court rejected the argument. The Delegate examined the reasons to determine whether the alleged failures created reasonable cause to suspect material error; he did not construe DSM-5 as a psychiatrist, resolve the competing medical evidence or substitute a WPI opinion.

The judgment therefore distinguishes disagreement with a medical conclusion, a section 7.26 application based on suspected material error, and judicial review based on legal error. Those processes have different functions and should not be treated as interchangeable appeals.

Psychiatric WPI disputes require a complete longitudinal record. Treating notes, hospital material, medication, work and social function, earlier claims and previous medico-legal reports may all matter. A useful psychiatric report should identify the records reviewed, address significant differences and explain diagnosis, causation, functional ratings and any pre-existing deduction.

A pre-existing psychiatric diagnosis does not automatically defeat a CTP psychiatric claim. The real questions are what impairment existed before the accident, what changed because of the accident, whether the new condition is causally related and how any deduction is supported under the applicable Guidelines.

A section 7.26 application should identify the specific alleged error, the relevant part of the certificate, the evidence said to have been overlooked or misunderstood and why correction could materially affect the assessment. Simply pointing to a different expert opinion may amount only to disagreement on the merits.

The case does not establish 23% as an expected result, permit significant contradictory evidence to be ignored, make subjective fear sufficient in every PTSD case or decide that the claimant was entitled to damages. It also does not combine physical and psychiatric WPI.

The Court decided only that this assessor’s certificate and this Delegate’s decision were legally valid on the arguments and evidence before it. A different assessment record, reasoning failure or procedural history may produce a different result.

The useful evidence depends on the precise issue in the certificate or review application. A focused bundle commonly includes:

• the insurer’s WPI decision and complete reasons
• the PIC application, reply, statement of issues, certificate and reasons
• the section 7.26 review application and the President’s or Delegate’s decision
• GP, psychologist and psychiatrist records from before and after the accident
• earlier psychiatric diagnoses, admissions, medication and treatment history
• relevant records from earlier workers compensation, CTP or other injury claims
• reports applying recognised diagnostic criteria and addressing accident causation
• PIRS reasoning across all six functional areas, supported by functional evidence
• a chronology of work, study, care, self-care, relationships, travel and social function
• the calculation and evidentiary basis for any pre-existing impairment deduction
• a table identifying each apparent inconsistency and its clinical or factual explanation