Assessing life insurance claims is a careful balancing act, weighing up the opinions of various medical experts and vocational assessors. Dotlic v Hannover Life Re of Australasia Limited  NSWSC 986 provides some much needed colour to the shades of grey insurers face when considering expert evidence.
Mr Dotlic immigrated from Bosnia to Australia in 2000 at the age of 19. He found work as a formwork labourer and became a member of the Construction and Building Unions Superannuation Fund, which was party to a group life policy issued by Hannover Life Re Australasia Limited (Hannover).
In 2009, Mr Dotlic was involved in a motor vehicle accident, suffering only minor head, shoulder and back injuries. He was admitted to hospital and released the same day. The extent of his treatment was physiotherapy and massage on referral from his general practitioner.
In 2012, Mr Dotlic claimed a Total and Permanent Disability (TPD) benefit of $100,000. The claim was assessed and subsequently declined by Hannover in 2014 on the basis that Mr Dotlic was able to return to suitable lighter duties within the scope of his education, training and experience (ETE). Mr Dotlic then commenced proceedings in the New South Wales Supreme Court against both Hannover and United Super Pty Limited (Trustee) as trustee for the Construction and Building Unions Superannuation Fund.
Was the insurer’s decision reasonable?
In order to succeed in the proceedings, Mr Dotlic needed to establish that the decision of Hannover and the Trustee to decline his claim was unreasonable based on the evidence then before them (following the cases of McArthur v Mercantile Mutual and Hannover v Sayseng).
In this instance the question was whether, after consideration of medical evidence satisfactory to Hannover, Mr Dotlic was unlikely ever to be able to engage in any Regular Remuneration Work (as defined in the policy) for which he was reasonably fitted by his ETE.
Pembroke J considered the established principles of reasonableness found in Edwards v The Hunter Valley Co-Op Dairy, TAL Life Ltd v Shuetrim and Minister for Immigration & Citizenship v Li, including that the decision of the insurer could not be attacked ‘[u]nless the view taken by the insurer can be shown to have been unreasonable on the material then before the insurer’ and that unreasonableness can be found where a decision ‘lacks an evident and intelligible justification’. He also cited the oft-quoted maxim ‘reasonable persons may reasonably take different views’.
Counsel for Mr Dotlic submitted that Hannover’s decision was so unreasonable that a reasonable person in its position would not have arrived at it. The basis for this submission was that Hannover and the Trustee had not addressed the question of whether, in the real world, the plaintiff was ever likely to obtain such work bearing in mind his injuries, limited English skills and his previous ETE. Further, Mr Dotlic contended that there was no labour market analysis to assess the likelihood of him obtaining any such employment.
In the course of assessing the claim, Hannover and the Trustee relied on voluminous medical and vocational reports that provided an optimistic but realistic prognosis. The vocational assessors were, according to His Honour, scrupulous in addressing the relevant issues and recommending employment categories.
On the other hand, His Honour drew attention to the ‘precious little’ that was provided to Hannover to support Mr Dotlic’s claim (being one report from Mr Dotlic’s general practitioner). That report certified that the GP did not believe that Mr Dotlic would ever be able to do a job for which he was reasonably fitted by ETE. The only support for this opinion was ‘chronic persisting symptoms resulting from injury on 15/9/2009’. His Honour questioned the veracity of that report, referring to his own reasoning in Zahr v TAL, that ‘… the usual, and entirely understandable starting premise of a medical practitioner is to accept and believe a patient’s account’.
His Honour ultimately found in favour of Hannover and the Trustee, on the basis that:
- Hannover had more than enough material available to it, and there was an evident and intelligible justification for Hannover’s opinion based on that material;
- a reasonable insurer would not have concluded that Mr Dotlic was unlikely ever to be able to engage in regular part-time or full-time employment for which he was reasonably fitted by ETE; and
- there was no failure on the part of Hannover or the Trustee to have regard to the ‘real world’ in considering whether Mr Dotlic was unlikely ever to be able to engage in suitable employment.
No duty to find employment
What is interesting about this case is that His Honour not only considered the reasonableness of the insurer’s decision to decline Mr Dotlic’s claim, but he went one step further to state that an insurer has no responsibility to act as an employment agency.
In the penultimate paragraph of the judgement, His Honour refers to a Job Match Report obtained by Hannover, stating that ‘having identified appropriate vocational opportunities for the plaintiff, and taking into account the physical restrictions to which he was subject, there was no need to go further. And no need for the insurer to question the conclusions.’
Essentially, His Honour confined an insurer’s responsibility to forming an opinion about the probabilities of whether or not an insured is unlikely ever to engage in employment that they are suited for based on their ETE; and that an insurer ‘has no duty to find a particular job with a particular employer willing to take on the plaintiff’.