What does it take for an Insurer to be found to have abandoned a defence of contributory negligence and thereby become bound by an assessment of damages?

An Insurer makes settlement offers without reduction for contributory negligence and makes no specific submission on that defence at an Assessment Conference. Perhaps unsurprisingly, there is a finding by the Claims Assessor that the defence was not made out. Is the Insurer bound by the CARS assessment? The Supreme Court provides the answer in Cahill v Allianz Australia Insurance Limited.


Judgment date: 27 March 2019
Citation: Cahill v Allianz Australia Insurance Ltd [2019] NSWSC 328
Jurisdiction: Supreme Court of New South Wales (Common Law)*

Principle Issue

  • Unless a defence of contributory negligence is expressly abandoned by an Insurer, any assessment of damages will not be binding.


The Claimant was injured in a motor vehicle accident and lodged a Personal Injury Claim Form with the Insurer.

The Insurer issued a Section 81(1) Notice admitting breach of duty of care but raising a defence of contributory negligence to the extent of 5% due to the Claimant's unsafe driving.

Settlement negotiations took place between the parties over a period of almost 2 years. On all occasions, the offers exchanged made no reference to a reduction for contributory negligence.

The Claimant referred the dispute to CARS for General Assessment. The relevant application acknowledged the allegation of contributory negligence. The Insurer's Reply encompassed submissions which confirmed its position on liability.

The Claims Assessor directed the parties to make written submissions. Those submissions did not address the issue of contributory negligence.

During the Assessment Conference no questioning of the Claimant was directed to the issue. A statement from the driver at fault was before the Assessor.  During closing submissions the Claims Assessor asked the Insurer's counsel what he wished to say about contributory negligence, to which the response was that reliance was placed on the driver's statement and there was nothing further to say "other than that which has been put in writing".

The Claims Assessor issued a Certificate supported by Reasons for Decision. In those reasons, under a heading of "Contributory Negligence" he stated:

"There is no evidence before me that the Claimant contributed to the cause of the motor vehicle accident….I find that the Claimant is entitled to a full award of damages without any deduction for contributory negligence".

The Claimant subsequently informed the Insurer that he accepted the assessment of damages specified in the Certificate, pursuant to s 95(2) of the Act. The Insurer responded by confirming that it did not accept the assessment as liability was not wholly admitted.

The Claimant filed a summons in the Supreme Court of NSW to have the assessment affirmed and seeking an order that the Insurer pay the Claimant the amount of damages specified in the Certificate.


The Claimant contended that by its conduct the Insurer had essentially abandoned the issue of contributory negligence. Thus, the Insurer having effectively admitted liability, the assessment of damages was binding.

The Insurer relied upon the fact that the s81 (1) Notice was not altered, nor was the defence abandoned at any time. Further, the Insurer submitted that the Claims Assessor calculated the Claimant's costs on the basis of "liability not wholly admitted" and the Claimant had not objected to the assessment of costs awarded on this basis (noting that if liability was wholly admitted, then a lesser amount would have been assessed for costs).

His Honour found that the Insurer at no time prior to the Assessment Conference or during the Assessment Conference had abandoned the allegation of 5% contributory negligence. He observed  that the Claimant was met with three immediate difficulties in proving so:

  1. The Claims Assessor made an express determination on the issue of contributory negligence,
  2. The Insurer relied upon written submissions which expressly conveyed the Insurer's position as to contributory negligence, and
  3. There was nothing to suggest that any time during the Assessment Conference the Insurer had expressly abandoned the defence.
The Court found that as the Insurer had not wholly accepted liability for the claim, then pursuant to s 95(1) and (2)(a), the assessment of damages was not binding. His Honour dismissed the summons and ordered the Claimant to pay the Insurer's costs.

Why this case is important

This decision confirms that insurers retain the option of rejecting assessments of damages at CARS in circumstances where liability has not been wholly admitted. Regardless of the veracity with which the Insurer may pursue the defence, it will operate to keep liability in issue unless the defence is expressly abandoned.

*Walton J