FRAUD DOES NOT PAY

5 May 2021

By Sagorika Platel (Associate) and Marcus Di Blasio (Employment Lawyer)

McLean v Workers’ Compensation Regulator [2021] QDC 22

On 24 February 2021, the District Court of Queensland dismissed an appeal against imprisonment brought by a Worker who had fraudulently received Worker’s Compensation payments of $265,774 over a period of 13 months.

Background

On 16 August 2017, Mr McLean, a real estate agent, was attacked by dogs while visiting a property.

Mr McLean suffered some injuries to his right hand as well as secondary psychological injuries.

At the time of the incident, Mr McLean’s son was the Director of the agency he worked for.

After submitting his WorkCover Claim, the Authority requested pay slips from Mr McLean as proof that he met the definition of ‘Worker’ under the Workers Compensation and Rehabilitation Act 2003 (Qld).

Having recently stepped down as a Director of the real-estate agency as a result of being declared bankrupt, Mr McLean involved his son in creating 12 fictitious pay slips which he submitted to WorkCover.

From August 2017 to July 2018, Mr McLean misrepresented the extent of his impairment. During this period, he maintained that he was not capable of returning to work and performing his usual duties.

From late July 2018 to November 2018, Mr McLean returned to work on light duties after being medically assessed as having 27 percent impairment. As a result, Mr McLean received a lump sum payment of $89,164.80 from WorkCover.

From June 2018 to September 2018, the Authority undertook surveillance of Mr McLean.

The surveillance revealed Mr McLean attended work during this period and that he was capable of using his right hand without apparent difficulties.

Appeal

Mr McLean put forward two grounds of appeal against his term of imprisonment. First, he alleged that there was an error of law made by the Magistrate in failing to take into account the restitution payment of $265,774 (‘restitution order’). Second, he argued that a term of six months’ imprisonment was manifestly excessive (‘excessive sentence’). [3]

Decision on Appeal

Justice Rosengren found that the restitution order was a direct consequence of Mr McLean’s conduct and therefore it could not be a mitigating factor. [45] Her Honour reasoned that under the legislation, Mr McLean’s fraudulent conduct disentitled him from receiving these payments.

With respect to the appeal against the six months’ imprisonment, her Honour found this to be condign punishment in line with community expectations. While Her Honour agreed that Mr McLean’s adjustment disorder and depressed mood may have clouded his judgement, his cognitive ability was not impaired, and he ought to have known not to engage in such dishonest behaviours.

Her Honour further noted the existence of key aggravating factors which justified the term of imprisonment ordered by the magistrate. These factors included the amount of the fraud, the lengthy period of time over which the fraud was perpetrated, the fact he involved his 22-year-old son in the fraud and the deliberateness of his actions.

What is the lesson for employers?

Fraudulent WorkCover Claims can result in hefty restitution orders and a term of imprisonment against the offending claimant.

In circumstances where an employee is found to have participated in scheme abuse and non-compliance with their obligations under the relevant worker’s compensation legislation, the Authority has the power to disentitle the employee from receiving weekly payments and medical services on this basis.

Employers must be vigilant and careful not to be complicit in fraudulent claims. Targeted forensic surveillance conducted by a licensed corporate investigation company, which is protected by legal professional privilege, is a useful solution which we have successfully delivered for our clients.

It is in every employer’s interest to report fraudulent claims to the relevant Authority, as a successful conviction of an offence including fraud or for providing false or misleading information which results in monies recovered, can entitle employers to seek a recalculation of their premium for that part of the claims costs obtained fraudulently.

Please contact our team should you require practical advice with respect to the strategic management of worker’s compensation claims.