Constructive denial is a tactic used by insurers to deny disability coverage

Date: May 19, 2016

The case of an injured policeman who was denied his claim for disability coverage by the state's police insurer at first had his claim upheld before an appeal overturned that finding – with lasting consequences for other injured police.

In Shuetrim v FSS Trustee Corporation, the plaintiff was a police officer who claimed to have tennis elbow caused by incidents during the course of his employment. He also claimed an anxiety condition which he said left him totally and permanently disabled (TPD). The NSW police had entitled him to First State Superannuation Scheme (the Fund) which provided insurance for police via MetLife and TAL Life Limited. The two insurers formally declined the plaintiff's claim so the plaintiff began legal proceedings. His claim commenced in March 2015 and the plaintiff argued his insurer had not acted in good faith.

How and why did the insurer handle the claim so cynically?

MetLife had advised that if the plaintiff failed to attend vocational assessment, his claim would be delayed and closed. The plaintiff argued his insurer had "constructively denied his claim" It appeared the insurer wanted to invent a reason to deny the plaintiff the disability coverage he should have been entitled to. A vocational assessor is not a qualified medical practitioner – a point that the plaintiff's compensation lawyers argued strongly, and which had some sway in the first court case.

The plaintiff was found to be entitled to TPD benefits however the plaintiff's refusal to attend vocational assessment didn't help his claim, the judge noted. The insurers were to pay out $207,216 under the Basic Policy and $597,287 under the Blue Ribbon Policy.

The appeal

The police officer had to prove, for a TPD payout, that he had become incapacitated enough to render him unlikely to engage in or work for reward in any occupation for which he was reasonably qualified by reason of education, training or experience. The insurance companies' appeal of 2016 saw a new judge raise the threshold of too-disabled-to-work from being assessed as a less than 50 per cent change of being able to work to the TPD making someone unlikely ever to be able to work. The proceedings against the insurer were set aside in lieu of dismissal. The new 'unlikely' determination is binding and will be followed in subsequent NSW cases.

This isn't the first case of injustice against injured cops

Here, at Gerard Malouf and Partners Compensation Lawyers, we understand the difficulty in dealing with seasoned claims assessors and insurance companies. We understand the difficulties Police Officers have had to face. The situations are often unfair, so please contact our office on 1800 004 878 for an obligation free discussion on how we may assist you to ensure you receive all your Police Officer TPD entitlements. We offer a no win, no fee deal for many claims.

Call us now on 1800 004 878 to book a free appointment with one of my compensation experts, or email your enquiry.