A recent decision of the Personal Injury Commission (PIC) has clarified the meaning of “acquitted” under s3.37 of the Motor Accidents Injuries Act 2017 (MAI Act), particularly where criminal responsibility is negatived by mental impairment. The case considered whether special verdicts of “act proven but not criminally responsible”, and a related dismissal without conviction, could restore a claimant’s entitlement to statutory benefits following serious driving charges. The decision confirms that substance, not labels, is determinative. This guidance is important for insurers and claims handlers assessing statutory benefit entitlements, where criminal proceedings involve mental health defences or other non‑standard criminal outcomes.

Key Takeaways

• For s3.37, “acquitted” turns on the legal effect of the outcome (exculpatory vs discretionary), not the label applied
• Mental impairment verdicts that negate criminal responsibility can amount to an acquittal for statutory benefits purposes
• Not all non‑conviction outcomes will qualify; the critical question is whether the disposition is exculpatory rather than discretionary or lenient
• The decision in Hulse remains relevant but may be distinguishable where criminal responsibility is negatived as a matter of fact or law
• Each case will turn on the specific criminal findings and the legal effect of the outcome
• A criminal outcome that is exculpatory in law (for s3.37 purposes) does not determine civil liability, which is assessed separately under different standards and statutory frameworks.

Facts

The claimant was injured in a motor vehicle accident and subsequently charged with multiple serious driving offences arising from the accident:

• Police pursuit (s51B, Crimes Act 1900) – indictable offence
• Two counts of causing bodily harm by misconduct in charge of a motor vehicle (s53, Crimes Act 1900) – indictable offence
• Driving recklessly/furiously or at a speed or in a manner dangerous (s117(2), Road Transport Act 2013) – summary offence.

While criminal proceedings were on foot, statutory benefits were withheld pursuant to s3.37 of the MAI Act.

The criminal court ultimately made special verdicts of “act proven but not criminally responsible” on several charges, based on unchallenged psychiatric evidence of mental impairment (applying s30 and/or 31 of the Mental Health and Cognitive Impairment Forensic Provisions Act 2020) (MHCI Act).

The remaining charge was dismissed without conviction under s10(1)(a) of the Crimes (Sentencing Procedure) Act 1999.

The summary offence retained its summary character even though it was dealt with alongside indictable charges; the Member noted the MHCI Act did not provide a District Court mechanism to dispose of that summary count by special verdict.

No convictions were recorded and the criminal proceedings were finally determined.

Issues

The PIC was required to determine:

• Whether the claimant had been “acquitted of the offence charged” for the purposes of s3.37(2) of the MAI Act
• Whether special verdicts under the MHCI Act could amount to an acquittal in substance and effect
• Whether a dismissal without conviction under s10(1)(a), in the circumstances of the case, restored entitlement to statutory benefits
• Whether prior authority dealing with non‑conviction outcomes applied where criminal responsibility had been negated by mental impairment.

Decision

The PIC determined the dispute in the claimant’s favour and found that statutory benefits were payable. In reaching that conclusion, the Member held that:

• S3.37 operates as a temporary suspension during the pendency of criminal charges, with retrospective restoration from the date of charge where s3.37(2) applies
• The term “acquitted” in s3.37 is not confined to a formal verdict of “not guilty” but extends to outcomes that relieve an accused of criminal liability in substance and effect
• Special verdicts of “act proven but not criminally responsible” are exculpatory, not mitigatory, and carry the same legal consequence as an acquittal
• Although one charge was dismissed under s10(1)(a), that outcome reflected the absence of criminal responsibility rather than leniency or discretionary mitigation
• The summary charge could not be finalised by a MHCI Act special verdict in the District Court, making s10(1)(a) the only lawful mechanism to conclude the charge while reflecting the absence of criminal responsibility
• The criminal proceedings were finally determined without any attribution of criminal responsibility, distinguishing the matter from the Supreme Court decision in NRMA v James Hulse [2024] NSWSC 142.

Accordingly, the claimant was treated as having been “acquitted” for the purposes of s3.37(2).

Importantly, the Member emphasised that the outcome turned on the exculpatory nature of the criminal dispositions. The decision does not suggest that all non‑conviction outcomes amount to an acquittal; rather, it is confined to circumstances where criminal responsibility has been negatived as a matter of law.

Outcomes reflecting discretion, leniency or reduced culpability remain distinguishable.

Conclusion

This decision provides important clarification on how s3.37 of the MAI Act operates where criminal charges intersect with mental impairment findings. It confirms that entitlement to statutory benefits depends on whether criminal responsibility has been established, rather than the formal label attached to the criminal outcome. This decision does not convert all non‑conviction outcomes into acquittals; careful analysis of the criminal findings and their legal effect remains essential when maintaining or lifting a statutory benefits disentitlement.

Further information / assistance regarding the issues raised in this article is available from the authors, Frances Allen, Partner, and Michelle Gattin, Lawyer, or your usual contact at Moray & Agnew.