Statement of Principles concerning localised sclerosis (Balance of Probabilities) (No. 62 of 2018)

The central concept is “localised sclerosis,” which the instrument carefully defines to distinguish it from systemic sclerosis and other scleroderma-like disorders. This definition is crucial because the SoP is concerned only with localised forms. The definition in subsection 7(2) includes notes that clarify its clinical features: the disease is limited to the skin, subcutaneous tissue, and underlying bone; it typically presents without sclerodactyly, Raynaud phenomenon, or nailfold capillary changes; and it is not associated with major vascular symptoms or visceral disease. The diagnosis is based on clinical findings, although histopathology can be used to rule out other conditions. Serological markers such as antinuclear antibody, anti-ssDNA antibody, anti-topoisomerase II alpha antibody, and rheumatoid factor may be elevated, but they are not diagnostic criteria per se.

The instrument also defines “death from localised sclerosis” in subsection 7(5) as including death from a terminal event or condition contributed to by the person’s localised sclerosis. The Dictionary defines “terminal event” as the proximate or ultimate cause of death, including pneumonia, respiratory failure, cardiac arrest, circulatory failure, or cessation of brain function. This broadens the scope of the SoP to cover deaths where the disease was a contributing factor, even if not the direct cause.

The concept of “relevant service” is critical because it determines which claimants can rely on this SoP. The Dictionary defines relevant service as eligible war service (other than operational service) under the VEA, defence service (other than hazardous service and British nuclear test defence service) under the VEA, or peacetime service under the MRCA. This means the SoP does not apply to operational service under the VEA, for which a different standard of proof (reasonable hypothesis) applies under section 120 of the VEA. The SoP explicitly states in section 5 that it applies to claims under section 120B of the VEA (which deals with balance of probabilities for non-operational service) and section 339 of the MRCA (which deals with peacetime service). Thus, the instrument is one of two possible SoPs for localised sclerosis: one for reasonable hypothesis (operational service) and this one for balance of probabilities.

The “specified list of drugs” is a closed list. It includes six entries: balicatib (a cathepsin K inhibitor), bleomycin (a chemotherapy drug known to cause pulmonary fibrosis and skin changes), enfuvirtide (an HIV fusion inhibitor), pemetrexed (a chemotherapy drug), taxanes (a class of chemotherapy drugs including paclitaxel and docetaxel), and tumour necrosis factor-alpha inhibitors (a class of biologic drugs used for autoimmune conditions). The inclusion of these drugs is based on sound medical-scientific evidence linking them to scleroderma-like skin changes. The list is exhaustive and not illustrative; any drug or class not listed cannot be used to satisfy factors 9(1) or 9(3).

The concept of “clinical onset” and “clinical worsening” is central. The factors require that the drug treatment or radiation occurred at the time of clinical onset or before clinical worsening. This temporal connection is important: for onset, the exposure must coincide with or precede the first appearance of the disease; for worsening, it must precede the aggravation. Factor 5, inability to obtain appropriate clinical management, does not specify a time frame, but it must relate to the person’s relevant service under section 10.

Finally, the instrument operates on the basis that the Repatriation Medical Authority has determined, on sound medical-scientific evidence, that it is more probable than not that localised sclerosis and death from it can be related to relevant service. This is the statutory basis under subsection 196B(3) for making a SoP on the balance of probabilities.

This SoP directly affects three groups: veterans and members with non-operational service claims under the VEA, members with peacetime service under the MRCA, and the decision-makers within the Department of Veterans’ Affairs and the Military Rehabilitation and Compensation Commission who assess those claims. It also indirectly affects medical professionals who provide evidence in support of claims, as well as legal practitioners and advocates representing claimants.

For claimants, the SoP determines whether localised sclerosis can be accepted as related to their service on the balance of probabilities. Only those whose service falls within the definition of “relevant service” can use this SoP. This means veterans who served in eligible war service but not on operational service (for example, peacetime Australian Army service or service in the Australian Military Forces after 1972), and members who served in defence service that is not hazardous or British nuclear test defence service, are covered. Similarly, members of the Australian Defence Force who served in peacetime under the MRCA are covered. Those with operational service (e.g., deployment to a war or warlike operation) would be subject to a different SoP applying the reasonable hypothesis standard. The distinction is critical: an operational service veteran who cannot satisfy the reasonable hypothesis SoP for localised sclerosis cannot rely on this instrument unless the claim is for a non-operational period of service.

Decision-makers at the Department and Commission must apply the factors strictly. If a claimant provides evidence that one of the five factors existed and that the factor is related to their relevant service, the decision-maker must find that the disease is connected to service on the balance of probabilities, unless another rule in the VEA or MRCA overrides. The SoP creates a rebuttable presumption: it does not require the decision-maker to consider alternative causes, but the factors are exhaustive. If no factor is present, the claim must be refused. The SoP also imposes an evidentiary burden on claimants to produce medical evidence linking the disease to one of the listed exposures.

Medical practitioners who treat veterans and members may be asked to provide reports addressing the specific factors. They need to understand the definition of localised sclerosis and the exclusion criteria. They also need to be aware of the specified list of drugs, because a claimant may have been treated with one of these drugs for an unrelated condition. For example, a veteran who received bleomycin for cancer chemotherapy may develop morphea-like skin changes. The medical practitioner must confirm the diagnosis and the timing of the drug treatment relative to clinical onset.

Legal practitioners and advocates must check the claimant’s service type to determine which SoP applies. They must also review the claimant’s medical history for any of the listed drugs or radiation therapy. If the claimant has had a condition that may be related to another SoP (e.g., cancer treated with radiation), section 11 cross-references that other SoP, so the advocate must also consider factors from that instrument.

The SoP does not affect private healthcare providers or insurance companies directly, but it influences the benefits available to veterans and members through the compensation systems. It also serves as a reference for medical literature and research, as it codifies the Repatriation Medical Authority's view of causation based on current evidence.

The primary duty created by this SoP is on the Repatriation Medical Authority to have determined the instrument on the basis of sound medical-scientific evidence. That duty has already been performed. The ongoing duty rests on decision-makers to apply the SoP correctly under sections 120B of the VEA and 339 of the MRCA. They must assess whether at least one factor in section 9 exists and is related to the person’s relevant service. They must use the definitions in the Dictionary, including the specified list of drugs, and they must determine the temporal sequence between the factor and clinical onset or worsening.

Claimants have a right to have their claim determined in accordance with this SoP if it applies. If the decision-maker accepts that a factor exists, they must find that the disease is service-related on the balance of probabilities. This is a substantive right that shifts the evidentiary burden: the claimant need not prove causation beyond the factors. The claimant also has the right to rely on the cross-reference provision in section 11, meaning that if a factor refers to an injury or disease covered by another SoP, the factors in that other SoP can be used. For example, if the factor is “being treated with tumour necrosis factor-alpha inhibitors” and that drug is also specified in an SoP for another disease, the decision-maker must consider the factors from that SoP if relevant.

The right to obtain appropriate clinical management is indirectly recognised through factor 5. A claimant who cannot obtain appropriate clinical management for localised sclerosis may use that as a factor for clinical worsening. However, the instrument does not define “appropriate clinical management.” This creates a duty on decision-makers to interpret the term, which may be contentious. It likely refers to standard medical care for localised sclerosis, such as topical corticosteroids, phototherapy, or systemic immunosuppressants. Inability to obtain such management may arise because of service-related circumstances (e.g., limited access to medical services while serving in a remote location).

Claimants also have a duty to provide evidence to support the existence of a factor. This includes medical records, prescriptions, or treatment history to show that they were treated with a specified drug or underwent therapeutic radiation. They must also show the relationship to service: for example, that the drug was administered as part of a service-related medical condition, or that the radiation was for a condition that was itself service-related.

The SoP does not create a duty to treat the disease; it is solely a causation instrument. However, it may influence clinical management decisions if a veteran knows that a drug on the specified list could trigger a claim. Similarly, the instrument does not impose any duty on private doctors to report such exposures, although they may be asked to provide information.

The rights and duties under this SoP are limited to the compensation systems. There is no independent cause of action created by the instrument outside the VEA and MRCA.

This Statement of Principles is not a penal instrument. It does not create offences, impose fines, or establish enforcement mechanisms. Its function is evidentiary and procedural: it determines what must be proved for a claim to succeed. Penalties for false or misleading statements in support of a claim arise under other provisions of the VEA and MRCA, not under this SoP.

Under the VEA, section 196H provides that a person must not give information that is false or misleading in a material particular in connection with a claim. The maximum penalty for an individual is imprisonment for 12 months. Similarly, under the MRCA, section 338 makes it an offence to provide false or misleading information in support of a claim. These penalties apply regardless of whether the SoP is correctly applied.

Enforcement of the SoP itself occurs through the Administrative Appeals Tribunal (AAT) and the courts on judicial review. A decision to refuse a claim based on an incorrect application of the SoP can be appealed. The AAT will review the merits of the decision, including whether the decision-maker correctly interpreted and applied the factors. The Federal Court may review questions of law, such as whether the SoP is valid or whether a particular factor was misconstrued. However, the SoP itself is a legislative instrument made by the Repatriation Medical Authority, and its validity can be challenged. For example, if the Authority did not have sound medical-scientific evidence to support a factor, a court might quash the instrument. There is no indication in the source of any such challenge.

The amendment history shows that the instrument was amended by the Amendment Statement of Principles (No. 16 of 2019). This amendment was necessary to correct or update subsections 9(1) and 9(3). The fact that the amendment and the original instrument share the same commencement date (23 July 2018) suggests that the amendment was intended to have effect from inception. This avoids any gap period where the original wording might have been deficient. Failure to apply the amended version could lead to incorrect decisions. Decision-makers must be aware of the amendment and apply the current version.

There are no penalties for the Repatriation Medical Authority if the instrument is later found to be based on flawed evidence. The Authority is protected by the VEA, and its determinations are made on the basis of the evidence available at the time. However, if new evidence emerges, the Authority can revoke or amend the SoP. This instrument replaced the 2009 SoP, indicating that the Authority periodically reviews and updates its determinations.

In summary, the SoP itself carries no penal consequences. The relevant penalties are found in the parent Acts and apply to parties who provide false information. Enforcement of the SoP is through the appeals and review mechanisms. The instrument's amendment history underscores the need for decision-makers to stay updated, but no retroactive penalties arise from the amendment.

This SoP operates within the statutory framework of the VEA and the MRCA. It is made under subsection 196B(3) of the VEA, which empowers the Repatriation Medical Authority to determine Statements of Principles on the balance of probabilities for diseases related to relevant service. The SoP is a legislative instrument under the Legislation Act 2003, registered on the Federal Register of Legislation. It is subject to disallowance by Parliament, though that has not occurred.

The most important interaction is with the reasonable hypothesis SoP that must exist for operational service claims. Under section 120A of the VEA, for operational service, the reasonable hypothesis standard applies. The Repatriation Medical Authority has likely also made a separate SoP for localised sclerosis under subsection 196B(2) for that standard. This balance-of-probabilities SoP is its counterpart for non-operational service. The two SoPs may have different factors because the evidence required for a reasonable hypothesis is less demanding than for a balance of probabilities. However, the definition of localised sclerosis and the specified list of drugs would likely be the same or similar. Claimants with mixed service (both operational and non-operational) may need to satisfy both SoPs for different periods.

The SoP interacts with the VEA’s causation provisions. Section 120B requires that for claims to which it applies, the Commission must be satisfied on the balance of probabilities that the disease is related to service, having regard to any relevant SoP. If a SoP exists, the Commission must determine the claim in accordance with it. This SoP effectively controls the outcome of such claims. If a factor is present, the Commission must accept the connection; if not, it must reject it (unless another provision applies).

The instrument also interacts with section 196C of the VEA, which deals with the binding nature of SoPs. Once a SoP is in force, it is binding on the Commission, the Veterans’ Review Board, and the AAT when determining claims. This means that the SoP overrides any medical opinion that might otherwise suggest a different causal nexus. The only exception is if the SoP is invalid.

Under the MRCA, section 339 similarly requires that a SoP be applied for peacetime service claims. The MRCA also has its own provisions for determination of claims, but this SoP is directly incorporated by reference. The Dictionary defines “MRCA” and “VEA,” and the term “relevant service” includes peacetime service under the MRCA. Thus, the instrument applies across both compensation schemes.

The cross-reference in section 11 is a notable interaction: if a factor refers to an injury or disease covered by another SoP, then the factors in that other SoP apply. For example, if the factor is “being treated with tumour necrosis factor-alpha inhibitors” and that drug is also linked to another condition (e.g., lupus or rheumatoid arthritis), the SoP for that condition’s factors might become relevant. This prevents fragmentation and ensures consistent treatment of common exposures.

The SoP also interacts with the International Statistical Classification of Diseases (ICD-10-AM). Subsection 7(3) states that while localised sclerosis attracts ICD-10-AM code L94.0 or L94.1, the meaning is given by subsection 7(2). The ICD code is for administrative and statistical purposes only and does not define the disease for the SoP. The latest edition used is the Tenth Edition, effective 1 July 2017. This ensures alignment with hospital coding but does not affect the medical definition.

Finally, the SoP interacts with other laws governing the provision of health care to veterans, such as the Veterans’ Affairs Medical Services regulations. However, those are not directly amended or affected. The SoP’s role is solely in causation determination.

The instrument originated as the Statement of Principles concerning localised sclerosis (Balance of Probabilities) (No. 62 of 2018), registered on 26 June 2018. It repealed and replaced the earlier SoP No. 67 of 2009. The new instrument was to commence on 23 July 2018.

However, before that commencement date, the Repatriation Medical Authority made the Amendment Statement of Principles concerning localised sclerosis (Balance of Probabilities) (No. 16 of 2019), registered on 2 January 2019. Despite its later registration date, the amendment also commenced on 23 July 2018, the same date as the original. This means the amendment applied from the very beginning of the instrument’s life. The effect is that the original, unamended version of the SoP never actually came into force in its original form; the amended version is the operative text as of 23 July 2018.

The amendment affected subsections 9(1) and 9(3). The endnotes show that these subsections were amended (am. No. 16 of 2019). The exact nature of the amendment is not specified in the source, but it likely involved changes to the wording of the drug factor provisions. Possibly the original wording was ambiguous or omitted certain drugs. The amendment may have replaced “being treated with a drug from the specified list of drugs” with a more precise formulation, or it may have added or removed drugs from the specified list. However, the compiled version shows the current text, which includes the specified list of drugs as defined in the Dictionary. The list itself is unchanged by the amendment? The amendment history does not mention the Dictionary being amended, so the list likely remained the same. The amendment probably clarified the temporal requirement or the phrase “at the time of the clinical onset.”

The fact that both instruments have the same commencement date is unusual. Under the Legislation Act 2003, an amendment normally commences on the date of registration unless otherwise specified. Here, the amendment specifies a commencement date of 23 July 2018, which is earlier than its registration date. This is permissible if the amendment provides for retrospective commencement, but it must be within the power of the delegate. The source does not indicate any constitutional issue. Practically, it means any claims determined between 23 July 2018 and 2 January 2019 should have applied the amended version, even though the original was on the register. This could cause confusion if decision-makers at DVA were applying the original unamended version before the amendment was registered. However, since the SoP commenced on 23 July 2018 and the amendment also commenced that day, the Authority intended the amended text to be the operative version from day one.

The amendment history also shows that the instrument has been compiled as at 23 July 2018. This compilation includes the amendment. There are no further amendments indicated. The instrument remains in force unless repealed or amended in the future. The Repatriation Medical Authority may issue further amendments based on new evidence, but as of the compilation date, only one amendment exists.

Practitioners should always check the current compilation on the Federal Register of Legislation to ensure they are using the correct version. The compilation note indicates that the text is as amended and in force on 23 July 2018. Any later amendments would be reflected in subsequent compilations.

The source does not refer to any litigation concerning this specific SoP. However, Statements of Principles in general have been subject to judicial review and AAT decisions. The instrument itself is a legislative instrument, and its validity can be challenged on grounds such as whether the Repatriation Medical Authority had sound medical-scientific evidence for the factors. For example, a claimant might argue that a factor is not supported by the evidence, or that the definition of localised sclerosis is too narrow. No such challenges are mentioned in the source.

It is worth noting that the predecessor SoP (No. 67 of 2009) might have been litigated. The current SoP repeals that earlier instrument, so any ongoing cases that were determined under the 2009 SoP would continue under the old instrument if the claim was made before the new one commenced. The new SoP applies to claims to which section 120B of the VEA or section 339 of the MRCA applies, without limitation to claims lodged after commencement. The transitional provisions in the VEA generally require that a claim be determined under the SoP in force at the time of the decision. Therefore, a claim lodged before 23 July 2018 but decided after that date would be determined under this new SoP.

There may be AAT cases interpreting the factors, particularly factor 5 (inability to obtain appropriate clinical management). The AAT has considered similar catch-all factors in other SoPs, and it is likely to apply a similar analysis here. The term “appropriate clinical management” is not defined, so the AAT may have to determine its meaning on a case-by-case basis. For instance, if a veteran was not offered first-line treatments due to service-related barriers, that could satisfy the factor. The absence of any mention of litigation in the source does not mean no cases exist; it simply means the instrument itself does not cite them.

The cross-reference provision in section 11 could also give rise to litigation. If a factor refers to another SoP, and that SoP is later amended or repealed, the interplay could be complex. However, the instrument provides that the other SoP applies “as in force from time to time,” so it is dynamic.

Given the closed list of drugs, there may also be disputes about whether a particular drug falls within the class “taxanes” or “tumour necrosis factor-alpha inhibitors.” For example, biosimilar drugs might be considered to be in the same class. The Dictionary does not provide a mechanism for extending the list beyond the named items. This could be a source of contention if a claimant was treated with a drug that is chemically similar but not on the list.

Overall, while this specific SoP has not generated reported litigation (based on the source), practitioners should be aware that SoPs are frequently tested in the AAT and occasionally in the Federal Court. The absence of citation does not imply immunity from legal challenge.

Several features of this SoP can trip up practitioners and claimants. The first is the narrow definition of “relevant service.” Many veterans assume that all service is covered by the same standard, but this SoP explicitly excludes operational service, hazardous service, and British nuclear test defence service. Claimants with operational service must rely on the reasonable hypothesis SoP, which is likely to have different factors. If a claimant has only operational service and cannot satisfy that standard, they cannot fall back on this instrument.

Second, the specified list of drugs is exhaustive and small. Only six entries. If a claimant has been exposed to another drug known to cause morphea (such as D-penicillamine or L-tryptophan), that exposure cannot be used to satisfy factors 9(1) or 9(3). The Authority has deliberately chosen a closed list based on sound evidence. This can be harsh if new evidence emerges after the SoP was made; the claimant would have to wait for an amendment.

Third, the factor “inability to obtain appropriate clinical management” under subsection 9(5) is ambiguous. It does not specify whether the inability must be due to service or whether it applies to any failure to manage the disease. Section 10 requires that the factor be related to relevant service, so the inability must be caused or contributed to by the service. For example, if a veteran was posted to a remote area with limited access to dermatology services and consequently did not receive phototherapy, this might qualify. But if the veteran simply chose not to attend treatment, it would not. Decision-makers will need to assess the reasonableness of the management and the service connection. The note in the instrument does not provide guidance.

Fourth, the temporal requirement for drug and radiation factors is “at the time of the clinical onset” for onset, and “before the clinical worsening” for worsening. This requires clear medical evidence identifying the precise point of clinical onset. For a slowly progressive condition like morphea, clinical onset can be difficult to pinpoint. The decision-maker may require specialist evidence to establish the timing. If the drug treatment ceased years before any skin changes appeared, the factor may not be satisfied.

Fifth, the cross-reference in section 11 can be a double-edged sword. If the factor refers to another SoP, the claimant may need to satisfy additional factors from that SoP. For example, if the factor is being treated with a drug that is also specified in an SoP for another disease, the claimant must also meet the requirements of that other SoP. This could impose a heavier evidentiary burden than expected.

Sixth, the instrument applies only to claims under section 120B of the VEA or section 339 of the MRCA. Claims under other provisions (e.g., for dependents under different sections) may not be covered. Practitioners must check the specific claim provision.

Seventh, the amendment history means that the original instrument never operated in its unamended form. However, if a decision-maker used the original version registered on 26 June 2018 before the amendment was registered on 2 January 2019, that decision could be invalid. Claimants whose claims were decided in that window should check if the amended version would have changed the outcome. The retrospective commencement suggests the Authority intended the amendment to apply, but it may not be automatically recognised by all tribunals.

Finally, the definition of localised sclerosis excludes systemic sclerosis and other conditions. Sometimes claimants are misdiagnosed, and the decision-maker must ensure the correct diagnosis. If a claimant has systemic sclerosis with skin involvement, they cannot use this SoP; they would need the SoP for systemic sclerosis. The notes emphasise that localised sclerosis is limited to skin and underlying tissue, which is a key distinguishing feature.

Compliance with this SoP is required by two groups: claimants seeking to establish a connection between localised sclerosis and their service, and decision-makers who must determine claims in accordance with it.

For claimants and their representatives, the first step is to confirm that the person’s service falls within the definition of “relevant service.” This means verifying that the service is eligible war service (other than operational), defence service (other than hazardous or British nuclear test defence) under the VEA, or peacetime service under the MRCA. If the service is operational, this SoP does not apply, and the reasonable hypothesis SoP must be used. If the service is mixed, separate assessments may be needed.

Next, the claimant must obtain a definitive diagnosis of localised sclerosis that meets the definition in subsection 7(2). The diagnosis should be confirmed by a dermatologist or rheumatologist, and the report should explicitly state that the condition is not systemic sclerosis, graft versus host disease, or another scleroderma-like condition. Histopathological evidence may be helpful.

The claimant must then identify whether any of the five factors in section 9 exist. This requires a thorough review of medical records for evidence of treatment with any of the six specified drugs (balicatib, bleomycin, enfuvirtide, pemetrexed, taxanes, or tumour necrosis factor-alpha inhibitors) or for a history of therapeutic radiation for cancer. The timing relative to clinical onset or worsening must be established. For drug factors, the treatment must have occurred at the time of onset or before worsening. For radiation, it must have occurred before onset or before worsening. Medical evidence should confirm that the affected site was within the radiation field.

If none of the first four factors can be established, the claimant may rely on factor 5: inability to obtain appropriate clinical management. This requires evidence that appropriate management for localised sclerosis was not available or not provided due to circumstances related to service. For example, if a serving member was stationed in a location without a dermatologist and tissue expansion or phototherapy was delayed. The claimant must show that the inability led to clinical worsening of the disease. The decision-maker will examine whether the management was indeed appropriate and whether the inability was service-related.

The claimant must also show that the factor is related to their relevant service under section 10. For factors 1 and 2 (onset), the relationship is straightforward if the drug or radiation was for a service-related condition. For factors 3, 4, and 5 (worsening), the relationship must be to material contribution or aggravation, and the disease must have been suffered or contracted before or during (but not arising out of) relevant service. This may require a nuanced analysis, especially if the original onset predates service.

The claimant should gather all relevant medical records, prescriptions, radiation treatment plans, and service records that link the exposure to service. A medical expert report addressing each factor in the language of the SoP is essential. The report should state the diagnosis, the existence of the factor, the timing, and the relationship to service.

For decision-makers, compliance involves applying the SoP strictly. They must ensure that the claimant’s service type matches the definition of relevant service. They must verify the diagnosis and ensure it is not excluded. They must determine whether at least one factor exists, using the definitions in the Dictionary. If a factor refers to another SoP (section 11), they must consult that SoP. They must also apply subsection 10(2) correctly for worsening factors.

Decision-makers should be aware of the amendment to subsections 9(1) and (3) and ensure they use the current text. The compilation note indicates the version as at 23 July 2018 includes the amendment. If dealing with a claim decided before the amendment was registered but after commencement, the decision-maker should treat the amended version as retrospective.

Finally, both claimants and decision-makers should regularly check the Federal Register of Legislation for any further amendments. The instrument is subject to periodic review by the Repatriation Medical Authority. Staying current with updates prevents incorrect assessments.