Section 78 Notice Workers Compensation NSW | Liability Decision

Urgent: a Section 78 notice is not the end of the claim

A Section 78 notice is a legal denial notice, not just an unhappy claims email. It tells you the insurer has formally denied liability or a benefit and has set out the reasons and evidence they want to rely on. Depending on the issue, delay can make review, payment recovery, treatment approval, and later PIC preparation much harder.

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What a Section 78 notice actually is

In NSW, an insurer cannot simply tell you over the phone that your claim is denied and leave it there. Under section 78, the insurer must give a written notice explaining the decision, the reasons for it, and the material relied on.

In practice, that notice often becomes the document that frames the whole dispute. It may attach medical reports, claim notes, factual assumptions, wage material, or an insurer theory that the injury is not work related, is really degenerative, or does not justify ongoing payments or treatment.

If you are not sure which insurer issued your notice — common after labour hire, host-employer, or subcontractor arrangements — use theNSW workers compensation insurer listbefore requesting review documents and the underlying reports.

A statement of the decision and the insurer's reasons.
A list of the documents and evidence relied on.
Copies of medical reports used to make the decision.
Information about review and dispute options.

Common reasons a Section 78 notice is issued

Liability dispute

The insurer says the injury is not work related, that the mechanism did not happen as described, or that you are not a worker under the legislation.

Pre-existing or degenerative condition argument

The insurer accepts you have symptoms but says work did not materially aggravate the condition enough. That is often really a chronology and causation fight. Compare thepre-existing condition dispute guide.

Treatment denial folded into liability reasoning

Some notices partly accept an injury but deny surgery, psychology, imaging, or another treatment step as not reasonably necessary. The real practical pressure then becomes how treatment delay affects the rest of the file.

Capacity or payment strategy hidden inside the notice

The insurer may be setting up a broader position that you can do suitable employment, are no longer entitled to weekly payments, or do not need ongoing restrictions. That is wherework capacityandweekly payments stoppedguidance becomes relevant.

What to do in the first few days after receiving the notice

First 24 hours

Get the full notice pack

Secure the notice, every attached report, and any email or claim-note explanation of the insurer's reasoning. Many workers react before they have seen the actual material relied on.

Days 1 to 3

Identify the real issue

Is the actual fight causation, inconsistent reporting, degeneration, treatment necessity, or work capacity? If you target the wrong issue, the denial usually hardens.

Days 3 to 7

Choose the escalation path

Some files need better treating evidence first. Others need urgent preparation for aPIC disputebecause weekly payments or treatment timing are already under pressure.

What usually goes wrong after a Section 78 notice arrives

The worker argues the conclusion, not the evidence gap

A notice may say the claim is not work related, but the real weakness may be a missing chronology, a vague treating-doctor history, or an IME that reframed the condition as degenerative. Unless that exact gap is fixed, the insurer usually repeats the same denial.

Weekly payments and treatment collapse in parallel

Once liability is denied, the dispute often spreads. Weekly payments can stop, certificates can be challenged, and treatment may be refused as not reasonably necessary. The file often needs a broader plan, not just an argument about the notice label.

Medical reports stay too general

Reports that simply say “injured at work” rarely move a formal denial. Better evidence explains mechanism, diagnosis, causation, restrictions, and why the insurer's contrary theory is wrong.

The larger threshold strategy is missed

Some denials are early signs of wider threshold disputes involvingWPI entitlement,serious injury status, orwork injury damages. If you only answer the denial notice, you can miss the more valuable longer-term pathway.

Best next guide based on what the insurer is really saying

General denial / next-step triageClaim denied guideUse this if you need a practical first-pass guide to what the notice means, what evidence matters, and what to do first.Degenerative / prior historyPre-existing condition dispute guideUse this if the notice says your symptoms were already there or work did not materially aggravate the condition.Capacity / suitable workWork capacity dispute guideUse this if the insurer is really saying you can do suitable employment and your weekly payments should be reduced.Treatment / surgery refusalTreatment denial guideUse this if liability is partly accepted but surgery, imaging, psychology, or specialist treatment has been refused.

Dispute navigation matrix: choose your first move today

If your file has more than one live risk, do not wait for one dispute to finish before opening the next. Pick the primary risk for today, assign an owner and due date, and send one dated written update that references every active track.

Liability reason is the main problem

Start with theclaim denied guideand map each insurer reason to one specific document you will file this week.

Weekly payments are under pressure

Move to theweekly payments stopped guideand lock an income-continuity plan while liability arguments continue.

Treatment delay is now the urgent risk

Use thetreatment denial guideand send a targeted treating-doctor update that answers the insurer's necessity objections.

Capacity language is being used to cut entitlements

Open thework capacity dispute guideand cross-check every capacity statement against certificate wording and real job demands.

Deadlines and strategic timing

Most Section 78 files are lost on timing discipline, not just legal merit. Build one written timeline that locks review milestones, treating-doctor update dates, document-request deadlines, and PIC-readiness checkpoints so weekly payments and treatment risks are managed in parallel. If it is not dated and in writing, assume it may not help you later.

Within 24 hours: secure the full notice pack and every report relied on.
Within 24 hours: confirm the issuing insurer and claim reference in writing so requests are sent to the right team from day one.
Within 3 days: issue a written response plan mapped to each insurer reason.
Within 3 days: assign an owner, due date, and evidence source to every disputed insurer statement so nothing sits in limbo.
Within 48 hours: request the insurer’s claim-note extract and document index in writing so nothing relied on stays hidden.
Within 5 days: build a route map for each live risk (liability, weekly payments, treatment, capacity) and link each one to its next page and document owner so escalation never stalls on “who does what next”.
Within 7 days: set review and PIC-preparation dates in one evidence calendar.
After every material phone call: send a written confirmation email within 24 hours so the chronology is not rewritten later.
By day 7: screen whether the facts may also support a work injury damages path so threshold strategy is not left too late.
Run one combined action board for legal review + weekly-payments/treatment continuity so both tracks move on the same dates and evidence set.

48-hour document request pack that prevents file drift

Most weak Section 78 responses fail because the worker never gets a clean copy of what the insurer actually relied on. Send one structured written request in the first 48 hours and list each item separately so silence is obvious and follow-up is easy.

Full Section 78 notice and every attachment referenced in the notice.
Complete IME and treating-specialist reports relied on, including referral questions and covering letters.
Claim-note extract for the decision period (including internal chronology around denial drafting).
PIAWE and weekly-payment calculation breakdown used at the time of decision.
Treatment refusal reasons and any internal reviewer comments if treatment was also denied.
Written confirmation of the current decision-maker, team email, and response timeframe.

Where good files fail in the first 72 hours

Phone updates are treated as final without written confirmation, then the insurer version becomes the only timeline on file.
Treating evidence says “unfit” but does not explain task-level restrictions, so the insurer reframes the issue as suitable employment.
Weekly payments, treatment, and liability are run as separate tracks with different document sets, creating contradictions at review stage.
No one owns the next outbound letter date, so urgent issues drift while everyone thinks someone else has responded.

PIC-readiness file index you can build in one afternoon

If this file has a real chance of escalation, build one indexed folder now rather than scrambling later. Keep each document in one source-of-truth bundle so your solicitor, insurer, and treating team are all looking at the same chronology.

Folder A: Section 78 notice versions, all attachments, and every written response you sent (dated).
Folder B: medical evidence by date (GP, specialists, imaging, IME, and capacity certificates).
Folder C: weekly-payments material (PIAWE calculations, payment schedules, stoppage letters, and arrears notes).
Folder D: treatment track (requests, refusals, insurer reasons, and treating-doctor responses).
Folder E: communication log (call summaries confirmed in writing within 24 hours).
One index page: document name, date, issue it supports, and next action owner.

Contradiction table: stop insurer narrative drift before it starts

When a Section 78 file drifts, it is usually because each update re-describes the same issue differently. Use one contradiction table and update it on every outbound letter. This keeps your review, IRO preparation, and PIC bundle anchored to one fact version.

Column 1: insurer statement quoted exactly (with notice/report page reference).
Column 2: your direct evidence answer (document ID + date).
Column 3: what remains disputed and what fresh material is still pending.
Column 4: deadline + owner + escalation trigger if no written response arrives.
Send the updated table every time you lodge new medical, wage, or treatment material.

First outbound email discipline (same day)

The first same-day email often decides whether your timeline stays usable. Keep it short, structured, and dated so every later review can see exactly what you disputed and what documents you requested.

Use one subject format: Claim number + Section 78 response + date.
List each disputed insurer statement as a numbered item and attach the matching evidence reference.
List outstanding documents separately and set a written response date for each item.
If there was a phone call, send a 24-hour written confirmation summary so your chronology cannot be rewritten later.

Escalation trigger ladder: when to stop waiting

Good Section 78 files usually fail for one reason: people keep waiting after the insurer has already stopped engaging properly. Set your escalation triggers in writing so review and PIC preparation start on time.

Trigger 1 (24 hours): phone explanations changed, but no written confirmation received — send same-day chronology email and lock your contradiction table update.
Trigger 2 (72 hours): key documents or reasons still missing — lodge formal written review request and copy your indexed evidence list.
Trigger 3 (7 days): no substantive correction on liability, weekly payments, or treatment access — keep review running and move PIC bundle assembly to active mode, not draft mode.
Write each trigger date on one page with a named owner, so the file cannot drift back into open-ended phone follow-ups.

The dispute pathway

Read the reason and gather the file

Start with the notice, insurer reasons, and supporting medical material. Confirm the issuing insurer and claim reference in writing before any document requests, using theNSW workers compensation insurer listif needed. For an urgent action checklist, use theSection 78 response timeline guide.

Build the right evidence

Use targeted treating-doctor, specialist, witness, and earnings material. If an insurer doctor is driving the dispute, compare the reasoning with theunfair IME report guide.

Escalate through the proper forum

Depending on the denial type, that may mean review, IRO-funded preparation, and eventual escalation through thePIC disputes process.

First written response checklist (one-page structure)

Your first response does not need to be long, but it does need structure. A one-page response with numbered disputes and evidence references is usually far more effective than a long emotional email.

List the exact Section 78 statements you dispute, using quote snippets from the notice.
Map each disputed statement to attached evidence (medical, wage, witness, timeline).
State what is still outstanding and who is responsible to provide it.
Set a written response deadline and identify next procedural steps (review, IRO preparation, PIC readiness).
After every call, send a dated written confirmation within 24 hours.

Related statutory guides

Frequently asked questions

Is a Section 78 notice final?

No. It is the insurer’s formal liability decision notice and may deny or limit parts of your claim, but it can be challenged through review and dispute pathways where evidence supports your case.

What should be included in a Section 78 notice?

It should include the decision, reasons, and the evidence relied on. Missing or unclear reasoning can matter in dispute strategy and document requests.

How do I avoid sending this to the wrong insurer or case team?

Start by confirming the legal insurer name, file number, and case officer details on the notice header. If those don’t match your payroll documents or treatment letters, request written confirmation before the first substantive filing.

What should I do in the first 7 days after getting a Section 78 notice?

Secure the full notice pack immediately, map the insurer’s exact denial reason, and submit a targeted written response while preparing review and PIC pathways in parallel if weekly payments or treatment are at risk.

Which NSW Act is Section 78 in?

Section 78 is in the Workplace Injury Management and Workers Compensation Act 1998 (NSW), not the Workers Compensation Act 1987. Getting the statute reference right matters when preparing review letters and PIC filings.

Should I rely on phone calls after getting a Section 78 notice?

No. Use phone calls for logistics only, then confirm everything important in writing. Written records, document requests, and dated responses are usually what matter in review and PIC preparation.

Can I get legal help without paying upfront?

In many workers compensation disputes, IRO funding can cover legal costs and supporting reports, so workers do not pay out of pocket.

Does my first written response need to be long?

No. A short one-page response is often stronger if it quotes each disputed statement, maps each point to evidence, identifies outstanding documents, and sets clear written deadlines.

What usually goes wrong after a Section 78 notice arrives?

Workers often argue the headline conclusion instead of fixing the underlying evidence gap, while weekly payments, treatment, and capacity issues deteriorate in parallel.

Should I run separate timelines for legal review and weekly-payments/treatment issues?

No. Run one combined action board with one evidence index, one deadline map, and named owners for each task. Separate timelines often create contradictions that weaken both review and PIC preparation.

What should go into a same-day evidence register after I receive a Section 78 notice?

Use one page with four columns: insurer statement, your current evidence, missing evidence, and next action with owner + due date. Send that register with your written update so review and PIC preparation both stay aligned to the same facts.

Related disputes and claim guides

Need to dispute a Section 78 notice properly?

Bring the denial notice, medical certificates, and any insurer reports. We can help assess whether the insurer relied on incomplete evidence, the wrong legal test, or an unfair work-capacity or causation narrative before the dispute gets entrenched.