The Federal Court decision in the case of former ACT Fire Brigade member Wayne Lilley came on the same day government workplace insurer Comcare revealed it was in further financial strife.

The insurer reported a $98 million loss in the past financial year, attributed partly to a growing number of compensation claims.

Mr Lilley was diagnosed with compartment syndrome in 2005, forcing him to end a successful 17-year career in the emergency services. Mr Lilley's work, which included running seven kilometres a day and hauling heavy equipment up training towers, was found to be the probable cause of the syndrome.

He suffered permanent pain and numbness in his leg, and had difficulty running, climbing stairs, or walking for more than five minutes.

The firefighter applied for compensation by Comcare for permanent disablement in 2009.

But Comcare rejected his claim, saying it did not meet its ''impairment criteria'', which require a worker to prove they have 10 per cent whole-person impairment.

He battled against Comcare's decision through the courts, arguing their criteria for assessing injury were ''unreasonable and disproportionate'', but lost an appeal in the Administrative Appeals Tribunal in 2011.

Mr Lilley - represented by Daniel Steiner of Capital Lawyers - then took the fight to the Federal Court, where Justice Steven Rares found in his favour. Justice Rares found Comcare's impairment criteria to be invalid, describing them as a nonsense, and as ''not reflective of any measure of impairment''.

Second, Justice Rares found the appeals tribunal had made an

error in assuming that clinical testing was required to meet Comcare's criteria for compensation.

Comcare appealed against Justice Rares' decision, and a full bench of the Federal Court returned its decision on the insurer's appeal on Friday afternoon.

The full bench rejected Justice Rares' first finding that Comcare's impairment criteria were invalid.

But they upheld his finding that the tribunal had made an error by assuming Comcare's criteria could only be met through clinical testing.

Mr Steiner said that meant the restrictions claimed by an injured worker did not necessarily require clinical testing by doctors.

They also declared that, when assessing the abilities of an injured worker, the word ''unable'' meant something less than ''impossible''. Mr Steiner said it meant a worker needed to demonstrate only that he had ''significant difficulty'' in certain activities to be eligible for compensation.

''The combined effect of these two findings is that it is now significantly easier for an injured worker to satisfy the requirements of the [Comcare Guide to the Assessment of Permanent Impairment] and receive permanent impairment compensation,'' he said.

''In our view, this decision is a far more fair and commonsense approach to the issues than the restrictive approach contended for by Comcare.''

Importantly for Mr Lilley, the Federal Court gave him the right to recover compensation for his injuries, and the matter will now go back to the appeals tribunal.

Specialist workplace compensation lawyer Geoff Wilson, of Maurice Blackburn Lawyers, also hailed the decision as a significant binding judgment.

He said it was good news for all workers who suffered permanent lower-limb injuries, including those in the public service, and the transport, banking, seafarers and telecommunications sectors.

''Comcare scheme workers with lower-limb injuries have been left in a state of uncertainty for nearly a year because of Comcare's appeal in this case,'' Mr Wilson said.