Worker loses $300K in compensation due to "negligent solicitor"

The South Australian District Court has found that a worker had potentially relinquished more than $300,000 in workers' compensation entitlements due to the "deficient" advice of her solicitors.

In July 1997 the aged care worker was injured at work and submitted a claim for compensation.

After the claim was accepted, she engaged a firm of solicitors - Palios, Meegan & Nicholson Holdings Pty Ltd - to manage the claim and to assist her in obtaining a lump sum payment in accordance with s4A3 of the SA Workers Compensation and Rehabilitation Act 1986.

The worker then received a letter from her employer stating that she would "never be able to return safely to her duties as a personal carer", and suggesting she seek a "redemption package".

After nearly a year of negotiations with WorkCover, a redemption package - including a lump sum payment of $116,500 - was accepted by the worker.

In 2004 the worker suffered a further workplace injury while working part-time for a different organisation. She lodged a claim for compensation and was awarded weekly payments.

Shortly after, however, the weekly payments were "inexplicably" reduced. On investigation she found that upon redemption she had relinquished further entitlements to income maintenance or medical expenses, and that income maintenance would be paid at a reduced rate in the event of a subsequent work-related injury.

The worker then initiated an action against her former solicitors, contending that she had received inadequate advice on the effect of redemption in the event of further injury, and as to the true value of her entitlements at the time of her 1997 injury.

Advice never given

In the District Court, Judge Sydney Tilmouth found that if the worker had declined the redemption package she would have continued to receive weekly income maintenance, and payments to cover her "substantial" medical expenses.

In theory, Judge Tilmouth said, the worker had relinquished entitlements in excess of $300,000, when taking into account the 13-year working life ahead of her before retirement.

The worker, he found, had not been advised of this figure.

"An astonishing feature of this case," he said, "is that there is nowhere to be found any reference whatsoever in any of the [substantial] contemporary records reflecting the fact that advice along these lines was ever given.

"The proper discharge of the duty of care required the solicitor to meaningfully quantify the potential value of the entitlements [the worker] was proposing to relinquish."

Judge Tilmouth rejected a contention from the solicitor directly responsible for the worker's claim that the worker had been advised of such figures orally.

The solicitor, he found, was responsible for running hundreds of similar "files" at any one time, and had conceded that she couldn't even remember the worker.

"The Court is unable to be satisfied that the additional oral advice over and above that recorded in the written records was given to [the worker]," he said.

Judge Tilmouth found, therefore, that the solicitor's advice had fallen "negligently short". The parties will be heard at a later date as to the precise calculation of damages.