Statement of Principles concerning steatohepatitis (Reasonable Hypothesis) (No. 86 of 2022)

The central concept is a reasonable hypothesis. Under VEA section 120A and MRCA section 338, a hypothesis that connects a disease to service is reasonable if it is not contrary to proven medical facts and if the SoP factors provide a sufficient basis. The instrument does not define “reasonable hypothesis” further, but section 9 makes clear that the listed factors are the minimum needed. The hypothesis must actually be raised by evidence; a claimant cannot merely assert a factor exists.

Clinical onset is a critical temporal concept. Most factors require that the factor exist “before the clinical onset” or “at the time of the clinical onset” of steatohepatitis. The instrument does not define “clinical onset”, but standard administrative practice treats it as the point at which a medical practitioner could first diagnose the condition clinically, which may be before symptoms appear. This timing requirement means a claimant must produce medical records or history pinpointing when steatohepatitis first became manifest, which may be difficult for a disease that is often asymptomatic for years.

The definition of steatohepatitis itself (subsection 7(2)) is specific: fatty change and inflammation of the liver with hepatocyte injury, with or without fibrosis. It includes both alcoholic steatohepatitis (ASH) and non-alcoholic steatohepatitis (NASH). But it expressly excludes four other liver conditions: alpha-1 antitrypsin deficiency, biliary obstruction, haemochromatosis, and Wilson’s disease. If a person’s liver pathology meets the criteria for one of those exclusions, the SoP does not apply, even if steatohepatitis is also present. This is a bright-line rule that may prevent claims where the steatohepatitis is secondary to an excluded primary condition, unless the primary condition itself is separately compensable.

Relevant service is defined in the dictionary. It covers operational service, peacekeeping service, hazardous service, and British nuclear test defence service under the VEA; and warlike and non-warlike service under the MRCA. Notably, peacetime service that is not captured by any of those categories (for example, peacetime service under the MRCA that is neither warlike nor non-warlike, or peacetime service under the VEA that is not operational) falls outside the scope of this SoP. This is a significant limitation.

Death from steatohepatitis (subsection 7(3)) includes death from a terminal event (pneumonia, respiratory failure, cardiac arrest, circulatory failure, or cessation of brain function) contributed to by steatohepatitis. This expands the scope beyond direct liver-related death.

The dictionary defines key medical terms: being obese - BMI of 30 or greater, or waist circumference >102 cm for males, >88 cm for females. Dyslipidaemia - abnormal blood lipids using specific mmol/L thresholds or regular drug therapy. Hyperuricaemia - serum uric acid ≥0.40 mmol/L. Rapid weight loss - reduction of body mass by at least 20% within a continuous period of no more than six months, with an explanatory note listing situations such as anorexia nervosa, acute starvation, and certain surgeries. Total parenteral nutrition is defined by a complete nutrient admixture given intravenously.

The Schedule 2 list of drugs contains 26 specified drugs or classes, including amiodarone, antiretroviral agents, methotrexate, tamoxifen, tetracycline antibiotics, and valproate. For a drug to qualify under factor 9(12), the drug must be “specified” and also “cannot be ceased or substituted”. That is a dual requirement; the drug must be on the list and the medical necessity must be shown. Factor 9(13) provides an alternative pathway for any drug (not on the list) if two conditions are met: the drug cannot be ceased or substituted, and the individual experienced development of steatohepatitis within 30 days of first taking it, plus redevelopment on rechallenge.

The primary affected persons are veterans, members of Peacekeeping Forces, and members of the Forces under the VEA, and members under the MRCA, who have rendered relevant service as defined. For claims, this includes their dependents seeking compensation after death. The instrument directly controls the success rate of their claims for steatohepatitis-related incapacity or death.

Decision-makers at the Department of Veterans’ Affairs, the Veterans’ Review Board, and the Administrative Appeals Tribunal are bound to apply the SoP. They cannot accept a hypothesis based solely on a medical opinion that does not correspond to a listed factor, unless the RMA has not addressed that factor (which is unlikely given the comprehensive list). This reduces their discretion but also provides a clear framework, potentially speeding up claims processing.

Medical practitioners who provide medicolegal opinions for claimants or for the Department are indirectly affected. They must understand the factor definitions and timing requirements to give useful evidence. For example, an opinion that steatohepatitis was caused by obesity is insufficient unless the practitioner confirms the exact timing of the obesity relative to clinical onset and can link the obesity to service. Practitioners who are unfamiliar with the SoP may produce reports that are inadmissible or given little weight.

The Repatriation Medical Authority itself is affected as the maker of the instrument. It must continue to maintain the SoP and review it as medical evidence evolves. Subsection 196B(2) of the VEA requires the RMA to determine SoPs for diseases it considers can be related to service. This instrument is one of many such determinations.

Claimant representatives (lawyers, advocates, pension officers) must stay current with the SoP to advise clients correctly. Old case law based on the 2013 version may be superseded if the factors changed (though in this replacement the factors appear largely unchanged from the 2013 version, but we cannot assume from the source alone). A representative who relies on the old SoP may miss a new factor or definition.

Taxpayers and the broader community are ultimately affected because the SoP influences the cost of the veterans’ compensation system. By making certain causal pathways easier to prove, it may increase successful claims and thus public expenditure. Conversely, by excluding other pathways, it may reduce claims that would have succeeded under a more general causation test.

Claimants have the right to have their claim assessed under this SoP. If they present evidence that satisfies at least one factor in section 9 and relates it to service (section 10), they raise a reasonable hypothesis. The decision-maker must then proceed to the next step of determining whether the hypothesis is rebutted by contrary medical evidence. This right is not absolute; it is conditional on the quality of evidence.

No duty is imposed on medical practitioners by this instrument directly. However, a medical practitioner giving a report for a claim has a practical duty to be aware of the SoP, or else the report may be irrelevant. In administrative law, the decision-maker is entitled to give no weight to an opinion that does not address the SoP framework.

Decision-makers have a duty to apply the SoP correctly. This means they must check each factor relied upon against the definitions and timing requirements. They must also ensure the factor is related to service - that is, the factor itself was caused or contributed to by the person’s relevant service. For example, if a veteran is obese because of a civilian lifestyle, the obesity factor does not satisfy section 10(1) unless the obesity can be linked to service (e.g., through a service-related injury causing immobility). The duty is strict; a failure to apply the SoP can be grounds for appeal to the Veterans’ Review Board or the Federal Court.

The RMA has a duty under VEA section 196B to determine SoPs based on sound medical-scientific evidence. Section 8 of the instrument records that the RMA has done so. The RMA must also keep SoPs under review and may revoke or vary them.

No right of private action arises from this instrument. It does not create a tort or statutory duty that a civilian can sue upon. It only operates within the veterans’ compensation framework.

This instrument does not itself contain any penal provisions. There are no fines or imprisonment for breaching its terms. Enforcement occurs indirectly through the claims process. If a claimant or their representative knowingly provides false evidence to satisfy a factor, they may be subject to penalties under the VEA (such as section 210 which criminalises fraud) or under the Criminal Code. The SoP does not create new offences; existing laws apply.

For decision-makers, failure to correctly apply the SoP can lead to the decision being set aside on review. There is no personal liability for an individual officer (the Commonwealth is generally responsible). However, systematic misapplication could result in adverse court rulings forcing the Department to change its practices.

The instrument’s enforcement is thus through administrative and judicial review, not through a dedicated enforcement body. The most practical consequence of non-compliance for a claimant is a refused claim. For a decision-maker, it is a decision that is overturned.

The primary interaction is with the Veterans’ Entitlements Act 1986 and the Military Rehabilitation and Compensation Act 2004. The SoP is made under VEA subsection 196B(2) and its application is triggered by claims under VEA section 120A and MRCA section 338. Those sections set the reasonable hypothesis standard. For claims under other provisions (e.g., MRCA section 335 for balance of probabilities), this SoP does not directly apply, though it may be used as a guide.

The SoP interacts with other Statements of Principles through section 11. If a factor in section 9 refers to an injury or disease that is itself the subject of an SoP (for example, factor 2 refers to diabetes mellitus), then the factors of that other SoP apply as if they were part of this instrument. This creates a cross-referencing mechanism. So to prove diabetes mellitus as a factor, a claimant must also satisfy the SoP for diabetes mellitus (the relevant version at the time). This can multiply evidential burdens.

Common law and general medical evidence are not excluded but are constrained. The SoP is determinative of what constitutes a reasonable hypothesis; if the claimant’s hypothesis is based on a factor not listed, it cannot succeed unless the factor is covered by section 11 by reference to another SoP. However, the decision-maker retains a residual ability to accept a hypothesis if the RMA has not determined an SoP for that disease? No - the condition (steatohepatitis) has an SoP, so that SoP governs. The RMA’s determination is that the listed factors are the only ones that currently have sound medical-scientific evidence to support a relationship with service. A claimant cannot rely on a proposed new factor unless the RMA determines a new SoP.

State workers’ compensation laws are not directly affected. This instrument is Commonwealth-specific. A veteran who also has a workers’ compensation claim in a state jurisdiction may need to adduce different medical evidence; the SoP has no force there.

Privacy laws (e.g., Privacy Act 1988) interact when medical records are used to prove factors. Claimants must consent to disclosure of health information.

The instrument repeals the Statement of Principles concerning steatohepatitis No. 79 of 2013 (registered as F2013L01898). It commenced on 19 September 2022. No other amendment history is provided in the source. The source indicates that the RMA made this instrument on 23 August 2022. There are no subsequent amendments recorded in the document. However, being a legislative instrument, it is possible that future amendments will occur as medical knowledge evolves. The previous version lasted nine years; this version may be replaced similarly. The instrument is published on the Federal Register of Legislation and will be updated there. Practitioners should check for any subsequent amending instruments before relying on this version. The source itself, being a PDF, is the authoritative version as at the date of making.

The source names no specific cases. The previous SoP (No. 79 of 2013) may well have been litigated before the Administrative Appeals Tribunal and the Federal Court, but this instrument does not refer to any such decisions. Statements of Principles in general are frequently challenged on grounds such as whether the RMA had a proper basis for a factor, whether a definition is too restrictive, or whether a factor conflicts with sound medical-scientific evidence. Because steatohepatitis is a condition that often involves complex comorbid factors (obesity, alcohol, diabetes), claims and appeals likely raise disputes about the timing of clinical onset and whether a factor (e.g., hypertension) existed before onset. The 2022 version may have tightened or loosened certain definitions compared to the 2013 version, but the source does not explain any differences. Practitioners should search the relevant registers for decisions under the new instrument, but as at the date of the instrument there would be few. The litigation history of the previous version may provide guidance on how the current version will be interpreted (e.g., on the meaning of “cannot be ceased or substituted”). Without named cases, the safest approach is to treat the instrument as a clean slate that will be developed through future decisions.

Several traps await the unwary.

Factor must be related to service, not just present. Section 10(1) unequivocally requires that the factor itself be related to the person’s relevant service. A claimant who is obese from civilian life cannot rely on factor 9(3) unless they can show the obesity was caused or aggravated by service. This is often overlooked. For example, if a veteran became obese after leaving the service due to civilian lifestyle, that factor is useless.

Timing is strict. Most factors demand “before the clinical onset” or “at the time of the clinical onset”. For factor 9(1) (hypertension), it must be before clinical onset. For factor 9(2) (diabetes mellitus), it must be at the time of clinical onset. Medical evidence must identify the exact onset point. If steatohepatitis is diagnosed incidentally on imaging during an unrelated admission, the onset is that date. A factor that emerges after that date cannot be used (except for factor 14 which is different).

Alcohol consumption is cumulative over a 5-year period, not a daily average. A male must have consumed at least 55 kg of alcohol within a continuous 5-year period (that is, 55,000 grams, or 5,500 standard drinks). A female 30 kg (3,000 standard drinks). This is a high threshold. Many people may underestimate their total consumption because they think in terms of drinks per day. The note clarifies the Australian Standard of 10 grams per drink.

Drug factors 9(12) and 9(13) require that the drug “cannot be ceased or substituted” . This means the drug is medically necessary and no alternative is suitable. If the drug could have been stopped without serious harm, the factor does not apply. For factor 9(13), there is also a stringent rechallenge requirement. The claimant must have developed steatohepatitis within 30 days of first taking the drug, then it resolved on cessation, then recurred on re-exposure. Such rechallenge is often clinically unsafe and may not be documented.

Factor 9(14) (inability to obtain appropriate clinical management) applies only to material contribution to, or aggravation of, steatohepatitis that was suffered or contracted before or during (but did not arise out of) relevant service. It cannot be used for initial onset. It also requires that the inability to obtain management was due to the circumstances of service (e.g., being deployed to a location with no medical facilities).

Excluded diseases at the outset. If the person’s liver disease is actually alpha-1 antitrypsin deficiency, biliary obstruction, haemochromatosis, or Wilson’s disease, the SoP does not apply, regardless of whether steatohepatitis is also present. This may prejudice claims where the primary cause is one of those but the service factor was present for the steatohepatitis component.

Definition of steatohepatitis requires both fatty change and inflammation with hepatocyte injury. Simple fatty liver (steatosis) without inflammation is not covered. A biopsy or specified imaging/clinical criteria is needed. Some claimants may have non-alcoholic fatty liver disease (NAFLD) without NASH; they cannot rely on this SoP until progression to steatohepatitis is proven.

The BMI alternative for obesity includes waist circumference. A person with BMI under 30 may still be obese under the waist circumference test (males >102 cm, females >88 cm). This is useful but must be measured at the critical time.

Rapid weight loss is defined as ≥20% reduction in body mass within 6 months. That is extreme. Anorexia nervosa is mentioned in the note, but many causes (e.g., crash dieting, cancer cachexia) may not meet the 20% threshold. This factor is likely rarely used.

The drug schedule is not exhaustive for factor 9(13). Factor 9(13) is a catch-all for any drug not listed, but the conditions are onerous. Claimants often mistakenly assume that if a drug is not on the list, no claim under drug factor is possible. Factor 9(13) exists but is hard to prove.

Application clause (section 5) limits the SoP to claims under VEA s 120A and MRCA s 338. It does not apply to claims under safety, rehabilitation, and compensation legislation administered by other bodies, nor to claims under the MRCA using a different standard (s 335 for balance of probabilities). A practitioner must ensure the claim is within those provisions.

Cross-referencing (section 11) incorporates other SoPs. This can lead to a cascade of requirements. For example, to prove diabetes mellitus, the claimant must also satisfy the SoP for diabetes mellitus. That may add its own factors and timing rules.

For a legal practitioner or authorised representative, the compliance steps are:

1. Confirm the claim type. The SoP applies only to claims under VEA s 120A and MRCA s 338. Verify that the claimant’s service qualifies as relevant service under the definition.

2. Obtain a clear diagnosis of steatohepatitis. The medical evidence must show fatty change and inflammation with hepatocyte injury. Exclude the four listed conditions. Ideally obtain a liver biopsy or specialist report with the exact wording. If the diagnosis is only “fatty liver” or “NAFLD”, it is insufficient; require a diagnosis of steatohepatitis.

3. Determine the date of clinical onset. This is critical for timing of factors. Gather evidence: when did symptoms start (right upper quadrant pain, fatigue, etc.)? When were liver function tests first abnormal? When was imaging or biopsy performed? If asymptomatic, the onset may be the date of the first confirming test.

4. Identify which factor(s) in section 9 may apply. For each factor, assess the medical evidence against the definitions. For example:

   • For factor 9(1) hypertension: was there a diagnosis of hypertension before the onset date?
   • For factor 9(3) obesity: what was the BMI or waist circumference at the time of onset?
   • For factor 9(8) or (9) alcohol: calculate total grams of alcohol consumed over a continuous 5-year period prior to onset. Use the 10-gram standard drink.
   • For factor 9(12) or (13) drugs: obtain prescription records showing the drug was taken for at least 30 days before onset and cannot be ceased or substituted. For factor 9(13), also obtain evidence of onset within 30 days of first taking and redevelopment on rechallenge.

5. Establish the service connection for the factor. Section 10(1) requires that the factor be related to the person’s relevant service. This means the factor itself must have been caused, contributed to, or aggravated by service. For example:

   • Hypertension caused by service-related stress or injury.
   • Obesity resulting from a service-acquired disability that limits mobility.
   • Alcohol consumption that is a result of service-related PTSD.
   • Drug therapy prescribed for a service-related condition.
   • Rapid weight loss due to a service-related injury causing malnutrition. If the factor has no service nexus, the claim fails.

6. Consider factor 9(14) only for aggravation. If the person already had steatohepatitis before or during service (but not arising out of service), and service prevented them from obtaining appropriate clinical management (e.g., deployment to a remote area), that may be used. The management must be “appropriate” - not necessarily optimal.

7. Check section 11 for cross-referenced SoPs. If the factor at step 4 is a disease (e.g., diabetes mellitus), the claimant must also satisfy the SoP for that disease. Obtain a copy of the current SoP for that condition and ensure compliance.

8. Draft a statement of hypothesis. State which factor is relied upon, provide the medical evidence confirming that factor, and explain how the factor is related to service. This document forms the basis for the reasonable hypothesis.

9. Lodge the claim with supporting evidence. Include medical reports, service records linking the factor to service, and any other documentation (e.g., unit medical records, personnel files, incident reports).

10. Prepare for review. If the claim is refused, be ready to argue at the Veterans’ Review Board or the AAT that the SoP has been correctly satisfied. The decision-maker’s reasoning must be scrutinised for misapplication of definitions or timing.

For a medical practitioner preparing a report for a claimant:

• Do not simply opine on medical causation in general terms. Address each possible factor under section 9 and state whether it existed at the relevant time and to what degree (e.g., serum uric acid level, waist circumference).
• Be precise about dates: when was clinical onset? When was the factor first present? Use the exact language of the SoP.
• Avoid vague terms like “obesity” - use BMI or waist circumference.
• For alcohol, calculate total grams over a five-year period, not daily average.
• For drugs, note any alternative available and why the drug could not be ceased or substituted.
• A report that does not engage with the SoP is likely to be given little weight.