A former police officer who suffered "horrific and graphic traumas" from being trapped in a crashed squad car has launched criminal action after being forced to wait more than a year for a workers' compensation payout.

Key points: Former NSW police officer Julie Heise developed post-traumatic stress disorder after an accident

Former NSW police officer Julie Heise developed post-traumatic stress disorder after an accident She has launched a private criminal prosecution against workplace injury claims manager Employers Mutual Limited

She has launched a private criminal prosecution against workplace injury claims manager Employers Mutual Limited The NSW Workers Compensation Independent Review Office says employers have been frustrated by EML delaying payments

Julie Heise was travelling at high speed in a police vehicle near Newcastle in 2009 when it rolled and she became stuck inside the crumpled wreckage.

She suffered physical and psychological injuries as a result of the crash and was later diagnosed with post-traumatic stress disorder and depression.

Ms Heise was discharged by NSW Police in 2015 and lodged a workers' compensation claim in 2017, only to be dragged through a year-long process by the case manager Employers Mutual Limited (EML).

Under New South Wales workers' compensation laws, failure to decide on a claim within two months is a criminal offence and attracts a fine of $5,500.

Ms Heise has since taken the extremely rare step of launching a private criminal prosecution against EML.

Cop left traumatised by crash

Former NSW police officer Julie Heise was trapped inside this squad car following a crash. ( Supplied )

EML declined to comment on the case, but court documents make clear the company does not dispute that Ms Heise's injuries were caused by her employment.

According to a psychiatric assessment carried out as part of her compensation claim, after returning to work following the crash she was exposed to "repeated horrific and graphic traumas … in the course of her subsequent general duties".

EML will not say whether it has made a determination on Ms Heise's claim, and the company has not explained why it delayed the process.

Ms Heise was a passenger in the police vehicle when it crashed in 2009. ( Supplied )

The case is now on track to proceed to trial after the NSW Supreme Court threw out an application from EML to have Ms Heise's prosecution ruled invalid.

A spokesperson for EML said the company was unable to comment as the matter was still before the courts.

Neither EML nor the workers' compensation authority, iCare, publish data on the amount of time injured workers have to wait for a determination.

But in just the first two months of this year, the Workers Compensation Independent Review Office (WIRO) received more than 250 complaints about delays in case managers deciding on claims.

EML was among the companies complained about.

NSW Greens MP David Shoebridge has pushed for reforms to the workers' compensation system. ( AAP: Dean Lewins )

David Shoebridge, a Greens member of the NSW Upper House who has pushed for reforms to the workers' compensation system, said Ms Heise's case highlighted the reluctance of the State Insurance Regulatory Authority (SIRA) to prosecute breaches of the act.

"I've had hundreds of injured workers contact my office about failures of insurance companies to comply with the law," he said.

"I find it astounding that there hasn't been a single instance where SIRA has stepped up and prosecuted for these obvious breaches of the law.

"Instead, we have an individual, in the middle of their case, having to deal with the trauma of being injured, also having to deal with the additional stress of prosecuting the insurance company."

In a statement, SIRA said while it has never prosecuted a case manager for a criminal breach, it has issued warnings and penalty notices.

Do you have experience with the workers compensation system? Email investigations@abc.net.au

The impact of delay can worsen the injury already suffered by claimants, according to Unions NSW.

"The system's not actually being geared towards getting workers back to work. It's being very geared to challenging injured workers' claims [and] dragging them out," Unions NSW secretary Mark Morey said.

Insurer has monopoly on compensation claims

EML is among Australia's biggest workers' compensation insurers, operating in New South Wales, Victoria and South Australia.

In NSW, employers pay insurance premiums into a central fund administered by the state government.

Management of compensation claims is outsourced to private insurance companies. These have included EML, Allianz and GIO.

But in 2017, the New South Wales Government named EML the monopoly case manager for new claims from the start of 2018.

The EML arrangement has had a rocky start.

According to the latest WIRO annual report, employers have been frustrated by delays in EML approving medical expenses for injured workers.

"On many occasions, employers have found it necessary to schedule medical treatment for injured workers to assist them to return to work in a timely manner, as EML has not decided whether that treatment is reasonably necessary," the WIRO report said.

"A significant number of NSW employers have complained to WIRO about difficulties in communicating with EML by telephone … an unacceptable time that they are required to spend 'on hold'; and difficulties arising from improperly trained and/or overworked staff members answering their phone calls."

Incentives given for limiting compensation

Last month, SIRA announced a review of the NSW workers' compensation scheme, to be headed by former Victorian Traffic Accident Commission CEO Janet Dore.

The review will examine how well the scheme is helping injured workers return to employment, as well as its case management performance.

The review comes at a time of intense scrutiny of workers' compensation schemes around the country, and the private insurers that operate within them.

The Victorian Ombudsman is working on her second investigation into the Victorian WorkSafe authority in less than three years.

In a scathing 2016 report, the ombudsman found that financial incentives WorkSafe paid to claims managers, including Allianz, QBE, Gallagher Bassett and Xchanging, were having a negative impact on the lives of injured workers.

Under WorkSafe's model, insurers received reward payments for limiting the number of weeks workers were on compensation, and for reducing the growth in medical expenses paid to injured workers.

The investigation found staff at some insurers were manipulating claims data in order to attract higher financial rewards.

It also uncovered internal email to QBE staff offering prizes to case managers who terminated the most work claims within a month.

The ombudsman recommended WorkSafe change its financial incentives to "ensure there is a sufficient focus on good quality and sustainable decision-making".

The Victorian Government and WorkSafe accepted all of the report's recommendations, but last July a follow-up investigation was announced.

"Given the distressing nature of what we found in 2016, it is incumbent upon me to examine whether the situation has improved for workers with complex injuries and conditions," Victorian Ombudsman Deborah Glass said at the time.

The ombudsman received more than 600 complaints about WorkSafe and its agents last financial year.