Liability Declined For Your Work Injury Claim? What is a s78 Notice?

Receiving news that an insurer has declined liability for your workers’ compensation claim can be incredibly stressful and confusing. You might be dealing with an injury, unable to work, and facing uncertainty about financial support and medical treatment coverage.The formal document an insurer must use to deny your claim for weekly payments or medical expenses is called a Section 78 Notice (or s78 Notice). Understanding what this notice means and what your options are is crucial. At PK Simpson, we specialise in helping injured workers navigate these challenges and fight for the compensation they deserve.

What Exactly is a Section 78 Notice?

Under Section 78 of the NSW Workplace Injury Management and Workers’ Compensation Act 1998, an insurer cannot simply tell you over the phone that they are stopping payments or refusing treatment. They must issue a formal, written Section 78 Notice if they dispute liability for your claim or any part of it.

This notice isn’t just a simple “no.” Insurers are required to:

• Clearly state the reasons why they are disputing liability.
• Provide a summary of the relevant documentary evidence they considered (like medical reports).
• Explain the consequences of their decision (e.g., stopping weekly payments).
• Inform you about your right to request an internal review and how to lodge a dispute with the Workers’ Compensation Commission.

Before issuing this notice, the insurer must conduct an internal review of your file by someone not involved in the initial recommendation to deny the claim. They must carefully consider all evidence, including reports you or your doctors have submitted.

If the insurer decides to stop weekly payments based on this notice, they must give you a specific notice period:

• 2 weeks’ notice if you’ve been receiving payments for less than a year.
• 6 weeks’ notice if you’ve been receiving payments for more than one year.

Why Would an Insurer Decline My Claim With a Section 78 Notice?

An insurer might issue a Section 78 Notice if it believes there is credible evidence showing it is not liable. Common reasons include:

• Believing your injury didn’t happen at work or isn’t work-related.
• Determining that you don’t meet the definition of a ‘worker’ under the Act.
• Concluding that your claim was made outside the legal time limits.
• Arguing that your injury was solely caused by serious and wilful misconduct.
• Claiming your ongoing issues are entirely due to a pre-existing condition, not the work injury.

Important Note on Pre-existing Conditions: We often see insurers decline claims by stating that an injured worker has recovered from the initial injury, and any current problems are just due to a degenerative or pre-existing condition (essentially blaming ‘old age’). However, NSW law is clear: if your work injury aggravated, accelerated, exacerbated, or deteriorated a pre-existing condition, the insurer is generally still liable for weekly payments and medical expenses related to that aggravation. PK Simpson has a strong track record of successfully challenging insurer decisions made on this basis in the Workers’ Compensation Commission.

Is Every Payment Stoppage a Section 78 Issue?

No. Sometimes, an insurer might reduce or stop payments because they believe you have some capacity to return to work (either your old job or suitable alternative duties). This is called a Work Capacity Decision, not a liability dispute covered by a Section 78 Notice. These decisions have a different review process, often involving the Personal Injury Commission or WIRO (Workers Compensation Independent Review Office), and specific rules apply regarding legal representation and costs.

What Should I Do After Receiving a Section 78 Notice?

Receiving this notice doesn’t mean your claim is over. You have the right to challenge the insurer’s decision. Here are the main steps:

1. Don’t Panic, Seek Expert Advice: The most crucial step is to contact experienced workers’ compensation lawyers immediately. At PK Simpson, we offer expert advice and can assess the insurer’s decision and your chances of successfully challenging it.
2. Understand Your Challenge Options:
   • Internal Review: The Section 78 Notice will mention requesting an internal review from the insurer. While this is an option, we generally advise against it. In our experience, insurers rarely overturn their own decisions through this process. It often just delays things and can allow the insurer to strengthen their reasons for denial.
   • Workers’ Compensation Commission (WCC): This is usually the most effective path. If your PK Simpson lawyer believes the insurer’s decision is incorrect, we can file an application with the WCC to dispute it. This triggers a formal process:
     • We gather necessary evidence (medical reports, statements).
     • We file an Application to Resolve a Dispute.
     • The insurer files a Reply.
     • An independent Arbitrator is appointed.
     • A teleconference is held to identify issues and set a timetable.
     • An Arbitration hearing takes place where both sides present their case.
     • The Arbitrator makes a binding decision (usually within 21 days of the hearing).

Will I Have to Pay Legal Costs?

Fighting an insurer can seem daunting, especially financially. Thankfully, in NSW, injured workers challenging Section 78 Notices generally don’t pay legal costs directly.

• Your lawyer applies to the Independent Legal Assistance and Review Service (ILARS), managed by WIRO.
• If ILARS approves funding (which they usually do for valid disputes), they pay your lawyer’s approved legal costs and disbursements directly at the end of the case.
• This means you can access expert legal help from PK Simpson without upfront fees or being out-of-pocket for costs, provided ILARS funding is granted.

What Happens if My Challenge is Successful?

If the WCC Arbitrator overturns the insurer’s decision:

• The insurer must immediately restart your weekly compensation payments.
• They must pay you any back-pay owed for the period payments were wrongly stopped.
• They must pay for reasonably necessary medical treatment related to your injury (you’ll usually need prior approval from the insurer for ongoing treatment).
• You will need to continue providing current WorkCover Certificates of Capacity from your doctor to support ongoing payments.

Don’t Face the Insurer Alone – Contact PK Simpson Today

A Section 78 Notice is a serious matter, but it’s often not the final word. Since 1977, the PK Simpson Injury Compensation Lawyers firm has served the people of New South Wales and across Australia and helped them gain deserved compensation. Our lawyers have the expertise and dedication to challenge unfair insurer decisions and fight for the compensation you are entitled to receive. If an insurer has declined liability for your workers’ compensation claim using a Section 78 Notice, contact us immediately.

Contact us today and let our expert compensation lawyers review your situation and guide you through the next steps. We’re here to help you get the support and compensation you deserve.