What is federal jurisdiction and how does it affect applications?

What is federal jurisdiction and how does it affect applications?

The District Court recently decided a number of workers compensation matters relating to the federal diversity jurisdiction. These cases can be found here.

The Personal Injury Commission (Commission) cannot determine an application if it would be required to exercise federal jurisdiction, to do so – see Attorney General for NSW v Gatsby [2018] NSWCA 254. Gatsby says that State tribunals cannot determine federal matters. Federal jurisdiction involves exercising the judicial power of the Commonwealth, including the power to determine disputes between:

• States; or
• residents of different States; or
• a State and a resident of another State.

Federal jurisdiction is not involved in the following circumstances: :

1. The resolution of the dispute does not require the exercise of judicial power- this means that the following applications to the Commission do not involve federal jurisdiction:
   1. Medical disputes in the Workers Compensation and Motor Accident Divisions (i.e., medical assessments);
   2. Medical disputes under s 319 of the Workplace Injury Management and Workers Compensation Act 1998 (1998 Act) that involve a medical assessment and the issue of a certificate pursuant to section 294 of the 1998 Act (and do not involve a liability dispute), and
   3. damages assessments in the Motor Accident Division.

   This position was considered in Searle v McGregor [2022] NSWCA 213 (Searle’s Case) – see Searle v McGregor - NSW Caselaw.

   This position was subsequently confirmed in Rafiqul Islam-v-Transport Accident Commission of Victoria and Heather Worldon-v-Transport Accident Commission of Victoria [2022] NSWDC 582 and Marie Jenny Watts v BKFY Pty Ltd [2022] NSWPIC 700.

   The District Court found that claims assessment matters and medical assessments in motor accidents matters involved the exercise of administrative, not judicial, power and as such were not affected by the federal jurisdiction.

2. The resolution of the dispute does require the exercise of judicial power, however, one of the parties to an application is:

• a resident of a Territory; or
• an overseas resident.

Residency is determined at the time the application is lodged with the Commission – see Ritson v State of New South Wales [2021] NSWPIC 409 (20 October 2021).

Division 3.2 of the Personal Injury Commission Act 2020 (PIC Act) enables persons (with leave of the District Court), to commence proceedings in that Court for the determination of applications that the Commission cannot determine because that would require the exercise of federal jurisdiction.

What type of Commission applications can be affected by federal jurisdiction issues?

Applications for a matter concerning a compensation claim (compensation matter application – see section 26(1) of the PIC Act) can be affected– these include:

• a claim for statutory benefits under the Motor Accident Injuries Act 2017 save for ‘medical assessment matters’ under Schedule 2 (2); or
• a claim for compensation or work injury damages under the  Workplace Injury Management and Workers Compensation Act 1998.

Determining if federal jurisdiction is involved

It was unclear until recently if some insurers should be treated as a State. This is important because the Commission cannot exercise federal jurisdiction which includes the power to determine disputes between:

• States; or
• residents of different States; or
• a State and a resident of another State.

What does the case law say about whether certain insurers should be treated as a State?

We have judicial authority about the nine insurers listed in the table immediately below. Judicial authority has been available for the insurers listed in rows 3-9 since 22 July 2022. This means that before that date, applications involving those insurers may have been:

• Dismissed by the Commission before judicial authority was provided – the parties to those dismissed matters received a letter in similar terms to TEMPLATE A which outlined the options.
• Referred to a Commission member to consider if the Commission has power to determine the application before judicial authority was provided and a decision is pending - the parties to those matters received a letter in similar terms to TEMPLATE B which  outlined the options ; or
• Rejected by the Commission (i.e., the Commission declined to deal with the dispute) – the parties to those rejected matters received a letter in similar terms to TEMPLATE C which outlined the options.