Recovery of insurer’s claim costs against an intoxicated driver under section 58 of the Motor Accident Insurance Act 1994: a partial error does not destroy all recovery rights

Ruckman v Suncorp Metway Insurance Ltd [2013] QCA 56

The Queensland Court of Appeal has recently confirmed that Queensland compulsory third party (CTP) insurers can recover costs under section 58 of the Motor Accident Insurance Act 1994 (Qld) even if not all of the costs were reasonably incurred.

Ruckman held CTP insurance with Suncorp. Because of his consumption of alcohol, he was unable to exercise effective control of the motor vehicle he was driving. He caused an accident that injured two claimants.

Suncorp relied on section 58 of the Motor Accident Insurance Act 1994 to sue Ruckman for the settlement money it had paid to the claimants, plus the costs of handling the claims.

Section 58 only allows an insurer to recover ‘any costs reasonably incurred’. Ruckman argued that some of Suncorp’s costs were not reasonably incurred and therefore none of the costs could be recovered.

While the Court of Appeal agreed that some of Suncorp’s costs were not reasonably incurred, it confirmed the decision of the trial judge that ‘costs’ includes separate categories of costs. Therefore, Suncorp was allowed to recover the portion of its costs that were reasonably incurred and the rest of the costs were disallowed.

An unreasonably incurred cost in one category of costs (such as compensation for future economic loss, which is often paid as a ‘global’ figure because it is impossible to precisely calculate) does not affect the insurer’s ability to recover reasonably incurred costs in other categories.