The recent decision from the Personal Injury Commission (PIC) of Principal Member John Harris in BQU v State of New South Wales (Southern NSW Health District) [2026] NSWPIC 501 (“BQU”) is important reading. On the one hand it is, as usual, helpful in ventilating the issues around workers compensation liability generally and ‘injury resolved’ decisions in particular. On the other, it showcases genuine concern from the PIC decision maker about unmeritorious, compassionless decision making by an insurer for a worker that led to the deterioration of her condition.
The decision can be read in full here.
The facts
- The worker was employed as a Nurse with NSW Health (para 1).
- She sustained a psychological injury on 11 March 2023 (para 2).
- The injury arose in terribly traumatic circumstances when the worker was confronted by a tragic scene involving a deceased young child and an understandably distraught father and grandfather, without adequate equipment (para 2).
- About the events, the Principal Member stated it “was distressful reading. It is difficult to imagine how distressful the events were when they occurred” (para 102).
- Initially the worker returned to work on modified duties, at a different location, in mid-2023 (para 22).
- The worker reported belittling from her new manager whilst on modified duties in September 2023 (para 23).
- She deteriorated to no capacity in October 2023.
- The insurer issued an ‘injury resolved’ decision on 1 August 2024, withdrawing access to weekly compensation and treatment.
- The worker returned to work with some capacity for part-time work from 11 November 2024 to 9 March 2025 (para 10), at a level against the recommendations of her doctor (para 25).
- The worker deteriorated to no capacity for work from 10 March 2025 (para 10), at the anniversary of the date of injury (para 27).
The insurer’s decision
Whilst accepting liability for the original claim, the insurer disputed ongoing liability on 1 August 2024 (para 6) on what appears to be the basis that the injury had resolved (section 33 of the Workers Compensation Act 1987 (NSW)).
The decision relied on the IME psychiatrist report of Dr Ghazala Watt, who provided a report dated 20 February 2024 (para 58). At the time of the assessment, Dr Watt felt the worker was in remission despite taking an increased dosage of medication (para 60), needing an exercise physiologist (para 61) and the worker reporting brain fog and fatigue (para 62).
Dr Watt then went a step further in a supplementary report three months later, stating the worker was in “full remission” (para 67), whilst still conceding there were non-work related factors in the form of her being bullied by a co-worker (para 66) and that the worker was likely to experience increased arousal working in a hospital setting, particularly in the hospital where the traumatic incident occurred (para 67).
It’s actually curious that Dr Watt was involved at all. Though she is an IME psychiatrist, the insurer also had the worker assessed by another IME psychiatrist, Associate Professor Robertson, on 2 February 2024; less than three weeks before Dr Watt.
The insurer’s slightly earlier IME, Associate Professor Robertson, said the injury was continuing (para 49) and further treatment was needed (para 50).
It is unclear from the decision why the insurer thought it necessary or appropriate to obtain two IME psychiatrists a mere three weeks apart and then seemingly take the opinion of one over the other.
The Principal Member’s decision about ongoing liability
The only evidence the insurer had to make their ‘injury resolved’ decision was that of the IME, Dr Watt.
The Principal Member easily dismissed the opinion of Dr Watt. He said the report was “internally inconsistent and otherwise at odds with the opinions…” (para 100) of the five other medical opinions in evidence including, as mentioned earlier, another insurer IME who saw the worker at almost exactly the same time as Dr Watt did. The Principal Member indicated “it would be perverse to reject the opinions of five medical practitioners” (para 105) and prefer Dr Watt’s.
The Principal Member determined that the injury had not resolved (para 112), accepting that the “overwhelming preponderance of the medical evidence satisfies that the applicant never recovered from the effects of the psychological injury” (para 99).
In addition, the Principal Member stated the defence on this ‘injury resolved’ decision “lacked merit” and “resulted in a deterioration of the applicant’s psychological condition because of the absence of medical treatment” (para 111).
The Principal Member’s decision about section 38
In finding that the injury had not resolved, the Principal Member then had to turn his mind to determining entitlements, noting that the injured person was, at the time of the hearing, past 130 weeks of weekly compensation payments.
As the Principal Member had accepted the injured worker had no capacity for work (para 119) from 10 March 2025 onwards, he then had to determine whether that no capacity was on an “indefinite” basis (para 136) in order for entitlements to continue after 130 weeks (section 38(2)).
The Principal Member found the injured worker had no capacity for work on an indefinite basis, accepting the evidence of the Nominated Treating Doctor, which “establishes that improvement may only occur with adequate medical treatment. This has not occurred given the insurer’s unmeritorious defence to this claim. The current absence of work capacity has been ongoing for a significant period and is likely to continue indefinitely” (para 138).
The Principal Member’s closing comments
The final paragraph of the decision is insightful:
“142. I finish these Reasons with the hope that the respondent and its insurer treats the applicant with more compassion and in accordance with the merits of the claim than what it has done over the last two years.”
Takeaways
This is a helpful decision in more ways than one.
On the issue of section 33 ‘injury resolved’ decisions, the Principal Member’s approach suggests that care should be taken by an insurer when relying on the opinion of a lone IME who is going against the flow of all other opinions.
It is also helpful in noting the comments on section 38 and how the withdrawal of access to treatment by an insurer can, understandably, cause a setback in the health and recovery of an injured person. This can be a consideration when it comes to affirming whether a certification of no capacity for work is indefinite or not.
More broadly, many will be aware that since 1 July 2026 we are now in the context of a new workers compensation regime for psychological injury claims. Early but anecdotal insights are that insurers are making it very tough for an injured person lodging a psychological injury claim to even qualify for ‘interim payments’, let alone have a claim accepted. The Regulator, SIRA, has not updated its highly vaunted standards of practice to encompass the legislative changes dating back to the start of the financial year. It seems SIRA doesn’t have a standard of care for the management of these claims. It mustn’t be missed that for the poor woman in this decision, she returned to work after the traumatic incident and battled away whilst, according to the undisputed evidence, receiving no sympathy from her manager, and what seems to be even less from the insurer.
This valuable decision highlights how important the conduct of an insurer is for an injured person doing their best to get themselves back on their feet after a serious workplace injury, and how detrimental it can be if not managed compassionately and correctly.
If you have received an ‘injury resolved’ or section 38 decision on your workers compensation claim and have questions, please reach out to our expert team via our website or contact us on 02 8046 9700.
