CR276 Disability Disability – partial permanent incapacity claim declined
Disability – partial permanent incapacity claim declined by insurer on the merits of the case, as also on grounds of various technical defences, being late submission of claim, non-disclosure, termination of cover, and a policy requirement that the office considered could lead to an absurdity.
The complainant, an attorney, had claimed permanent partial incapacity benefits on the grounds that he was unable to perform his duties as an attorney because of severe irritable bowel syndrome (IBS). The insurer denied the claim on the basis of several “technical” defences, which were dealt with by the office in turn.
While his claim was essentially for incapacity, the complainant, under some confusion, had originally first lodged his claim on the sickness benefit form. The insurer maintained that the claim was lodged late, as a sickness benefit claim had to be submitted within six months of the date of onset of sickness. The complainant had lodged his claim in August 2003, stating that the IBS had rendered him unable to work since August 1999. The office made a provisional ruling that it would not be equitable to decline the claim on the basis of a technicality where there would be no prejudice to the insurer to assess the claim as one for incapacity rather than for sickness.
Requirement of seven days total inability to attend to professional duties
The insurer stated that in terms of the policy a policyholder is not entitled to receive a permanent incapacity benefit if sickness does not render him totally unable to attend to his professional duties for at least seven consecutive days. According to the insurer the complainant had never been off work completely for at least seven consecutive days because of his IBS.
The office took the provisional view that the clause relied on produced an absurdity, since there will be policyholders who are clearly and beyond doubt permanently partially incapacitated (a benefit allowed for) but who will be excluded from the cover provided by the policy because they will nevertheless not be totally unable to attend to their professional duties for any period of seven days. In accordance with the rules of interpretation, the clause must be interpreted to produce a sensible commercial result which reflects the intention of the parties to ensure cover for partial permanent incapacity. We made a provisional ruling that the claim should therefore be considered despite the fact that the claimant had never been totally incapacitated for any ongoing period of seven days.
The insurer argued that, in four different applications for increased business in 1983, 1984, 1985 and 1989, the complainant did not mention an episode of depression from which he suffered in 1965. The complainant maintained that he had a transient episode of severe anxiety in 1965 while at university, which he “got through with a bit of Valium”. He recovered within a few weeks and went on to do well at university. He did not subsequently consult any medical practitioner for a similar problem until 1993 when he began treatment with a clinical psychologist. In her 2003 report the psychologist mentioned that his chronic depression began in his late teens, when he was at university, and had been chronic ever since, worsening after his divorce in 1993. The psychologist later clarified this, however, stating that she had not intended to make a retrospective diagnosis. In her view the origins of his condition dated back to his university years, but she believed that he had answered questions about depression honestly in the 1980s applications, as it was not reasonable to assume that until he began treatment with her he had had insight into the precipitating factors.
In its provisional ruling the office found that the incident not disclosed in 1965 was not material, in that a reasonable prudent person in the position of the complainant would not have considered that the information about the incident, which had occurred seventeen or more years earlier, should be disclosed.
Termination of cover
The insurer argued that as the complainant had stopped practising as an attorney from January 2004 he no longer qualified for membership, and was therefore not entitled to benefits from that date. His claim had been submitted in August 2003, however, and in September 2003 he had advised the insurer of his intention to stop working in December of that year. In its provisional ruling the office found that the insurer could not rely on the defence that the complainant’s membership had terminated.
The policy provided that a policyholder had to be significantly prevented from following his professional duties to qualify for a partial permanent incapacity award. The insurer maintained that, even if the above defences did not succeed, on the merits IBS was not in itself significant enough to justify an award.
The complainant provided reports from his gastro-enterologist and his psychologist, both of whom stressed his reduced capacity to work on account of his IBS. The gastro-enterologist recommended a scaling down of 50% of the complainant’s work activities. The psychologist maintained that he had only been able to improve his physical and psychological condition by working in a “token” job as a sheriff and following a stress-free and restricted lifestyle, and that if he returned to his work as an attorney there would be a relapse of his condition.
The insurer questioned the arbitrariness of the 50% figure and stated that the IBS was not well documented.
The office noted that the gastro-enterologist had treated the complainant for fifteen years, and had noted a progressive deterioration of his quality of life, whereupon he advised him to scale down his working hours. In our view this confirmed the chronic and permanent nature of the condition. The condition itself was described by his doctor as “severe irritable bowel syndrome, dysfunctional colon, decompensating anatomy, strict treatment protocol required, significant quality of life impairment”. This professional opinion could not be ignored, although a further, non-medical assessment also had to be made taking into account the actual type of work entailed in the complainant’s professional duties. Furthermore, the psychologist’s report provided a compelling motivation, based on fifteen years of treatment, that the IBS symptoms interfered to a significant degree with his ability to function as an attorney, with the work pressure/interaction with clients/court appearances that this work entailed.
In our view the complainant’s work as a sheriff did not constitute professional duties for which he trained as an attorney; it was not a full-time occupation or a profession, and it provided only a residual income. The complainant was not fully able to carry out his professional duties, as he was only able to do so when not suffering from the pain and discomfort associated with IBS, the unpredictability of which was also a limitation. However, he might well be able to assist another attorney on a part-time basis, or arrange to work as an attorney in a limited fashion, only taking on a few clients and avoiding cases that would be stressful.
Taking into account all the circumstances, it was the view of the office that the impact of the IBS on his ability to carry out professional duties was significant, but not to a greater degree than 20%, and a provisional ruling was made that he should be awarded a 20% partial permanent incapacity benefit.
The insurer reluctantly accepted the provisional rulings. The complainant felt that the 20% figure was somewhat low, but he also accepted the ruling.