A decision by the WA Court of Appeal to grant damages to a policy holder with a mental health disability claim has been challenged by the insurer.
The claimant, Terry Ward, recently won an appeal against MetLife after the insurer stopped paying his group salary continuance claim because it deemed he was no longer disabled. The original judge ruling on the case found in favour of the insurer, saying Mr Ward’s mental health symptoms were a result of his personality, and not a depressive episode. The Court of Appeal overturned this decision, ordering the insurer to pay damages in the amount of the outstanding claim payments.
MetLife has subsequently lodged a challenge with the High Court, arguing that the decision made by the Court of Appeal was not one they could have reached, given the evidence presented. Specifically, MetLife has argued that lawyers for Mr Ward failed to effectively argue the case that Mr Ward was suffering from an illness.
The case highlights the difficulty many insurers experience assessing mental health claims, and the subjectivity of such cases. It is also particularly relevant in light of the fact that mental illness is now the second most common cause of income protection claims in Australia (see: Record Claims Paid in 2013).
Speaking to riskinfo about the High Court challenge, Shine Lawyer’s solicitor, Melissa O’Neill, said Mr Ward was “stressed beyond belief” over the latest development in the long-running case.
“We were not expecting this at all. Mr Ward was exceptionally relieved when the Court of Appeal handed down his judgement.”
In addition to the stress of the court proceedings, Ms O’Neill said the judiciary process had been particularly difficult for Mr Ward, because of the findings of the initial trial judge.
“The judge in the first case ruled in favour of MetLife on the grounds that Terry was not disabled because his ‘symptoms’ were more to do with his personality, than an ongoing illness,” Ms O’Neill explained.
The problem that insurers have is that psychiatric illnesses are quite often based solely on subjective reporting from claimants
“There’s a fundamental legal principle that you take the claimant as you find them. The problem that insurers have is that psychiatric illnesses are quite often based solely on subjective reporting from claimants.
“I guess, understandably, they have to take that with a healthy dose of scepticism, because there are people out there who ‘bung it on’. But in this particular case, looking at Terry’s employment history, his personal background, and everything that they knew about Terry, a finding that he was ‘bunging it on’ because he was overworked and just wanted to retire, but couldn’t afford to, so tried to get a stress claim payout on his policy, was just absurd,” Ms O’Neill said.
Mr Ward subsequently appealed the decision, which was overturned. He was awarded damages amounting to the outstanding claims payments. MetLife is now seeking to have the Court of Appeal’s decision reviewed.
“Despite the challenge, we will still enforce the judgement of the Court of Appeal, and pursue MetLife for the damages awarded to the client,” Ms O’Neill said.
A spokesperson for MetLife said the insurer had applied for ‘Special Leave’ to appeal to the High Court against a decision of the WA Court of Appeal, which had by majority set aside a “strong first instance judgment in MetLife’s favour” on a disputed insurance claim.
MetLife offered no further comment on the case.
For more detail, see: Case Study – Ward v MetLife.
