Insurer not obliged to follow majority medical reports

The NSW Supreme Court has dismissed a superannuation fund member’s claim for total and permanent disablement (TPD) benefits.

In Burke v MetLife Insurance Ltd, the court said the insurer was "not obliged to follow the majority view in the medical reports".

A super fund  trustee held two group life policies with the same insurer, which provided TPD benefits for members of the NSW Police Force.

The policy terms were relevantly the same. Under one policy, a person was TPD if (among things): “.. the covered person, having been absent from their occupation through injury or illness for six consecutive months and having provided proof to the satisfaction of us that [they have] become incapacitated to such an extent as to render [them] unlikely ever to engage in or work for reward in any occupation or work for which he or she is reasonably qualified by reason of education, training or experience.”

Under both policies, it was a condition of payment of any benefit that a member provided the insurer with evidence to substantiate the claim.

Member’s TPD claim

In November 2010, Mr Burke, a fund member and former police officer, completed a claim form for TPD benefits under the policies. He claimed to be suffering chronic post-traumatic stress disorder (PTSD) arising from several events, including:

• in 1996, Mr Burke participating in a police siege at Hornsby in NSW
• in 1997, he resigned from the Police Force
• later in 1997, he was diagnosed as suffering PTSD, because of the siege
• later in 1997, he lodged a workers’ compensation claim for PTSD
• in 1998, he re-joined the force, after a reliable clinical test indicated he was not exhibiting PTSD symptoms and did not feel he was suffering PTSD at that time
• in 2005, he was arrested and interviewed after an incident on Anzac Day at Iguana Joe's Waterfront Bar at Gosford, NSW, while he was off-duty
• in 2006, he was stopped by a highway patrol for failing to stop at a red light, driving with an expired driver’s licence and driving an unregistered and uninsured vehicle. He submitted to a breath test which recorded a positive reading. He was arrested and at a police station recorded a positive reading of 0.105 grams of alcohol per 100 ml of blood. He was charged
• later in 2006, he was charged again for driving while unlicensed and suspended on full pay
• in 2007, he lodged a workers’ compensation claim for psychological injury
• in 2009, he lodging a second workers’ compensation claim for PTSD, and
• in September 2010, he was medically discharged from the Police Force on the basis he satisfied the definition of partial permanent disability in the Police Officers Death Disability Award 2005. In discharging the member, the Police Force did not accept he suffered PTSD.

The insurer received the claim in January 2011 and began investigating. Procedural fairness letters were issued in May 2013 and October 2013.

Later in October 2013, Mr Burke launched proceedings in the Industrial Court of NSW against the insurer for failing to properly determine his claim.

Two further procedural fairness letters were issued in June 2014 and October 2014.

In November 2014, the proceedings were transferred to the NSW Supreme Court .

Mr Burke alleged he had suffered psychological injury because of two classes of traumatic events:

• exposure to numerous distressing and traumatic scenes and events throughout his police career, and
• being the subject of false allegations and unlawful arrest in 2005 and 2006.

The insurer formally rejected the claim in August 2017.

The court's decision

The court ruled in the insurer’s favour. It said most of the medical reports supported Mr Burke’s claim, but were heavily dependent on his self-reporting of his symptoms.

In 2011, the insurer had obtained a report from a psychiatrist, Dr Rees. She diagnosed Mr Burke with chronic PTSD and an adjustment disorder depressed mood which fluctuated but was present during the 1.5-hour interview, related to stress that had occurred with an unlawful arrest and a period of suspension from the Police Force. He also had an alcohol abuse disorder related to his PTSD symptoms.

The court said Dr Rees’s assessment was critically dependent on one meeting with Mr Burke and what he told her about what had happened to him and how he had reacted to it. If his history, as given to Dr Rees, was materially incorrect, then Dr Rees’s diagnosis and prognosis was affected.

In 2016, the insurer obtained two reports from clinical psychologist Professor Mattick. The insurer briefed Professor Mattick with all the material it had.

Professor Mattick interviewed Mr Burke for five hours and took a detailed history. He also administered various questionnaires to assess emotional functioning.

He agreed that, at face value, Mr Burke met the criteria for PTSD, but showed no sign of it during the long assessment.

Professor Mattick saw no signs of anxiety or depression. He considered there was evidence of exaggeration or overstatement of emotional disturbance. Given Mr Burke’s presentation during the interview, Professor Mattick did not believe he was suffering a high level of emotional disturbance and did not consider he met the policy’s TPD definition.

Actual work

When the insurer rejected the claim in 2017, it had information Mr Burke was trained to be a personal trainer and his tax returns showed he had worked as one. There was also evidence he had worked part-time in his brother’s business as a water-proofer and had considered re-training in that field.

In 2017, the insurer obtained a desktop vocational assessment that identified transferrable skills likely gained by Mr Burke, given his employment history and vocational options and employment opportunities where he lived. They included  fitness instructor, construction worker, process worker, customer service officer, funeral attendant, public servant or courier.

The court noted the insurer's process produced material that was inconsistent with Mr Burke’s claim, including:

(a) differing descriptions of the Hornsby siege over time which were inconsistent with contemporaneous reports of the siege and indicated embellishment by Mr Burke over time
(b) a disclaimer by Mr Burke that the Hornsby siege had any effect on him, made in his application to rejoin the NSW Police in August 1997 and another three times
(c) psychological tests conducted in 1998, 2003, 2005 and 2006 which indicated that, at those times, Mr Burke had no PTSD symptoms
(d) differing descriptions of the events at Iguana Joe’s, and differing accounts about the reasonableness or otherwise of NSW Police’s actions
(e) assessments completed by Mr Burke’s treating psychologist, Mr Peters, which indicated Mr Burke’s emotional and psychological response to the 2005 and 2006 arrests had resolved such that he could return to serve as a police officer until September 2008 and was in remission by October 2009; and
(f)  documents indicating Mr Burke had taken steps to prepare for a new career, either in waterproofing or as a fitness trainer, but had apparently been diverted from his path of fitness training by NSW Police revoking approval for secondary employment.

The insurer concluded Mr Burke was not TPD.

The court said it was fair and reasonable for the insurer to accept Professor Mattick’s report and reasonable for it to conclude Mr Burke was not TPD.

Finally, the court said if another inquiry were necessary, the court did not think Mr Burke had chronic PTSD such that he fulfilled the policies’ TPD definition.

The court found the insurer was not in breach of its obligations under the policies and its decision was fair and reasonable and stood. The proceedings were dismissed with costs.

* Stanley Drummond is a Partner at Thomson Geer