A landmark court decision may have opened the way for thousands of public servants and military veterans to claim tens millions of dollars in workers' compensation they were previously denied, lawyers say.
A victory for a Canberra public servant in her six-year legal battle against the Commonwealth may have big implications for large numbers of bureaucrats and former soldiers, sailors and Air Force personnel whose compo claims have been knocked back or who have lost court or tribunal cases.
The full bench of the Federal Court has found former Australian Communications and Media Authority public servant Sharon Lim may be entitled to be compensated for a psychological injury she suffered in 2011.
One prominent Canberra barrister says the decision overturns 12 years of case law and gives hope to the many injured public sector and military workers denied compensation because their bosses were able to prove they took "reasonable administrative action" towards their employees.
Barrister Allan Anforth is encouraging his colleagues to contact disappointed applicants from recent years, telling them the Federal Court's decision could allow them to pursue cases thought to be lost causes.
Compensation lawyers have long argued that "reasonable administrative action" as interpreted by courts and tribunals since a 2005 decision in a case called Hart versus Comcare made it absurdly easy for the Commonwealth to avoid compensating its workers and has resulted in much injustice.
But Dr Lim is not out of the woods yet; federal workplace insurer Comcare has taken several landmark cases to the High Court in recent years and may seek leave to appeal the full bench's decision to the nation's highest court.
The insurer did not respond on Thursday to a request for comment and Dr Lim could not be contacted.
Dr Lim says she suffered "a sustained campaign of bullying and harassment ... over a period of about 6 months" in 2010 and 2011 at the ACMA.
She applied for workers' compensation in 2011, saying she suffered "adjustment reaction with depressant anxiety", but was knocked-back by Comcare which decided that the middle-manager's treatment, in relation to a performance appraisal and discussions of redundancy, constituted reasonable administrative action.
Successive legal appeals by Dr Lim against Comcare's decision failed with the Administrative Appeals Tribunal and then the Federal Court taking the same view as the insurer.
The Hart decision established the principle in cases of multiple causes of a psych injury, that an an employer claiming that one cause was "reasonable administrative action," did not have to compensate the worker.
But in their Judgment on the Lim case, published on Monday, Federal Court justices Richard Tracey, Susan Kenny and Mordecai Bromberg, found that employers could not simply rely on the "reasonable administrative action" of one cause of a workplace injury, to knock-out the entire claim.
The judges sent the case back to the Administrative Appeals Tribunal to be reconsidered, addressing the question of whether or not Ms Lim would have suffered her mental injury if the pivotal event in the case, a performance appraisal on January 11, 2011, had not taken place.
Mr Anforth, who has acted for Dr Lim in part of her proceedings, said the significance of the decision was huge.
"This decision is important because Comcare and Military Compensation have been rejecting claims for years based on the Hart principle. There may be thousands of people whose claims have been wrongly determined," Mr Anforth.
"These people are now entitled to seek review of their rejected claims and to have them reassessed on the correct basis of law."