Whether or not an injury or illness itself causes a claimant to be absent from their occupation or employment is an issue that arises from time to time in TPD claims. For example, it may be that the true reason that a claimant is absent from work is because of forthcoming redundancy, their employment has been terminated or perhaps due to motivational issues.
A well known decision illustrating this point is Ivan Mabbett v Watson Wyatt Superannuation Pty Limited & Anor1. In that case the claimant tendered his resignation which was accepted by the employer, however he was asked to work until the end of his shift on that day at which point his resignation was to be effective. Prior to the end of his shift, the claimant sustained a back injury. The life insurer contended that it was the claimant’s resignation, and not his back injury, which was the reason for his absence from his employer. The court decided that, given the language of the TPD definition, the back injury only had to be ‘a real and effective, and proximate, cause‘ of his absence and it did not matter if there were additional causes of the claimant’s absence:
[I]f the [claimant] can establish that his injury prevented him from being employed by the Employer for a minimum of 6 months, then the finding must be that the injury is, in fact, an effective cause of that absence. This is true regardless of whether, in the hypothetical case that the employee was not injured, the [claimant] would also have been absent from employment with the Employer due to his resignation.
What has attracted less judicial attention, however, is the issue of whether the injury or illness (or an associated condition) has caused the claimant to be disabled to the requisite extent, or if some other intervening event has incapacitated them. For example, a claimant may be absent from work because of a back injury which, after the end of the qualifying period and continuing, is not then sufficiently permanently disabling but becomes so only after the claimant has suffered a further injury which significantly and materially worsens his condition.
There appears to be a trend in TPD claims for life insurers to consider the concept of intervening events more carefully such as the claimant’s failure to undergo appropriate medical treatment. In those cases, the cause of the claimant’s disablement is attributed not to the injury or illness itself but to the failure to undergo appropriate medical treatment.
A decision on this basis may be open to criticism for the following reasons:
- The medical evidence does not set out with sufficient clarity what further medical treatment should have been undertaken by the claimant.
- The medical evidence does not clearly conclude that if the claimant had the appropriate treatment a return to suitable work was likely (it may not be sufficient for the medical evidence to indicate that the claimant’s condition would have improved).
In a recent NSW Supreme Court decision, the life insurer submitted that it was the claimant’s marital breakdown which separately caused her incapacity and had made her incapacity permanent when it was previously not. The claimant suffered psychological illness and her employment was terminated. She subsequently experienced marital difficulties and separated from her husband.
The insurer argued that the claimant was not disabled to the requisite degree, on the date of assessment, because it was the subsequent separation from her husband, coupled with and compounding her existing psychological condition, that caused her to be permanently disabled.
The court ultimately rejected that argument because there was no clear evidence that the claimant’s separation from her husband (or the deterioration in her relationship with him) was a new, intervening event causing her to suffer a materially higher level of psychological disablement than at the date of assessment (albeit, it ‘may have reinforced any difficulties of recovery that [the claimant] faced‘).
Notably the court was at least prepared to consider the possibility that the breakdown of the marriage could have been an intervening event causing TPD stating:
However, it would not necessarily follow if the claimant’s separation from her husband caused her disability to become permanent] that the Insurer’s rejection of [the] claim was reasonable, if it was the breakdown in [the claimant’s] marriage that was a factor that caused her incapacity to become permanent.
The occurrence of a marriage breakdown is not usually one that leads to either partner becoming incapacitated from work. The possibility of a marriage becoming untenable may be, unfortunately, a natural incidence of one partner suffering from PTSD and major depressive disorder…
In conclusion, to argue that there an intervening event has caused TPD, there must be clear and persuasive evidence to this effect.
This article was written by Philip Battye, Partner and David Arribas, Senior Associate.
1 NSWSC 365