Allianz Australia Insurance Limited v Moore [2025] NSWPICMP 557 – when pre-existing psychological injuries affect whole person impairment

In motor accident claims in New South Wales, disputes about whole person impairment (WPI) can determine whether an injured person crosses the statutory threshold to access common law damages. This threshold is particularly contentious in cases involving psychological or psychiatric injury, where assessments often require consideration of a claimant's pre-accident history and how impairment should properly be apportioned.

A recent decision of the Personal Injury Commission (PIC) in Allianz Australia Insurance Limited v Moore [2025] NSWPICMP 557 highlights how medical assessors and review panels approach these issues under the Motor Accident Guidelines, (Guidelines) particularly clauses 6.213, 6.214 and 6.218.

Background

The claimant was injured in a motor vehicle accident on 5 October 2020 while travelling as a passenger in the not-at -fault motor vehicle. She lodged a common law damages claim, but a dispute arose as to whether her psychological impairment exceeded 10% WPI, the threshold required to pursue a modified common law damages claim.

The matter proceeded to assessment before Medical Assessor Canaris in July 2024.

Assessor Canaris determined that the claimant had sustained an aggravation of a pre-existing psychological condition as a result of the accident. Importantly, he assessed her pre -accident impairment at 0% WPI, concluding that she was functioning adequately before the accident.

Her post-accident impairment was assessed at 15% WPI, meaning she exceeded the statutory threshold. This opened the door for a common law damages claim.

Insurer's review application

The insurer sought review of this decision, arguing that there was a reasonable suspicion of material error. The challenge was based on three key grounds including:

• Firstly, that the pre-accident impairment assessment was based only on the claiman's self-reporting, rather than objective medical evidence.
• Secondly, that the assessor's approach did not properly apply clause 6.218 of the Guidelines, which requires a structured consideration of pre-existing impairment when apportioning WPI.
• Finally, that the assessment failed to comply with clauses 6.213 and 6.214, which require that impairment ratings under the Psychiatric Impairment Rating Scale (PIRS) be linked to a recognised psychiatric diagnosis, rather than physical injury or pain.

The Review Panel's examination

The Medical Review Panel re-examined the claimant in July 2025, noting the passage of time since the earlier assessments and considering evidence of recent improvement.

The Panel reached different conclusions from both the original assessor and the claiman's expert. It found that:

1. The motor accident had caused post-traumatic stress disorder (PTSD), which was distinct from the pre-accident major depression.
2. The claiman's pre-accident impairment should have been assessed at 2% WPI, not 0%.
3. Her current impairment was only 9% WPI, reflecting mild deficits in self-care and social functioning.

This meant that only 7% WPI could be attributed to the motor vehicle accident.

The Review Panel revoked the original certificate and issued a new one, confirming that the claiman's permanent impairment did not exceed 10% WPI. As a result, she was not entitled to pursue non-economic loss damages.

Key takeaways for claimant practitioners

This case illustrates several important points for claimant practitioners handling motor accident psychological injury claims where there is a pre-existing component:

1. Pre-existing psychological conditions must be carefully accounted for. Even when a claimant appears to be functioning well before the accident, evidence of a prior diagnosis may result in a non-zero WPI assessment.
2. Apportionment requires strict adherence to the Guidelines. Clause 6.218 in particular demands that assessors properly separate the contribution of pre-existing conditions from post-accident injury.
3. Psychiatric diagnoses must underpin PIRS ratings. Impairments attributed to pain or physical injury alone cannot be counted toward psychiatric WPI.
4. The timing of assessments can be significant, as subsequent panels may take into account evidence of recovery or improvement since the earlier examination, which can reduce the overall impairment rating.

Exceeding the 10% WPI threshold in psychological injury cases is rarely straightforward, particularly where there is evidence of pre-existing mental health conditions. This decision highlights the delicate balance between recognising genuine aggravation caused by an accident and separating it from a claiman's prior psychological history. The Panel's reasoning shows how strictly the Guidelines are applied, with impairment required to be tied to a recognised psychiatric diagnosis and apportioned carefully where more than one condition is present. The outcome illustrates how finely calibrated these disputes can be, since only a few percentage points will determine whether a claimant exceeds the statutory threshold and is able to pursue a claim for non-economic loss as part of a common law damages claim.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.