The Facts
Police officer quits police force suffering PTSD and depression
A police officer worked for NSW Police and was involved in a number of traumatic events before ultimately quitting the police force.
After leaving the force, the officer was diagnosed with post-traumatic stress disorder (PTSD) and depression. Owing to her illness, the officer did not return to any kind of employment.
Terms of officer’s life and TPD insurance policy
The officer’s life insurance provider was obliged to compensate the officer if she could prove, to the satisfaction of the insurer, that she was so incapacitated as to be “unlikely ever” to return to employment.
Over the course of several years, the officer’s treating psychiatrist assessed her and wrote several reports regarding her progress. Initially he expressed some hope the officer would be able to return to work. In his later reports he expressed the view that treatment had been ineffective and that the officer’s condition was unlikely ever to improve.
Insurer engages private investigators to conduct surveillance
Following the officer making a claim, the insurer began conducting its own investigations and commissioning its own medical reports.
The insurer had private investigators follow the officer and observe her activities. Investigators learned that the officer had been in conflict with some of her fellow police officers, which may have been a factor in her decision to quit the force. Investigators also witnessed her engaging in various normal activities, including playing netball, attending dog shows, and smiling with friends in photos which were posted to her Facebook page.
The investigators observed the officer engaging in volunteer work at a public school. They found that her involvement with that school increased over time, to the point that she became president of the P&C Committee. The insured also became involved in organising a fete and a number of fundraisers.
Vocational assessments determine suitability for other employment
The insurer required the officer to submit to “vocational assessments” to determine which other occupations she might be able to work in, despite her condition.
Those reports asserted that the officer may be capable of working in a variety of different jobs, including insurance officer, welfare officer, office manager, security officer, control room and alarm monitoring, and insurance investigator.
Insurer engages its own psychiatric expert
The insurer had the officer examined by a different psychiatrist that it had selected.
The psychiatrist agreed that the officer did suffer from PTSD and depression. However, the insurer’s psychiatrist also noted that the officer regularly abused alcohol, on occasions drinking up to two bottles of wine per night. The psychiatrist suggested that the officer had an alcohol abuse disorder which was exacerbating the consequences of her PTSD and depression and that her marriage breakdown may also have been a factor.
The psychiatrist concluded that there were good prospects of her recovering if she undertook available treatment for the alcohol abuse and depression with a combination of anti-depressants. The insurer’s psychiatrist took the view that the officer had never been appropriately treated.
Insurer refuses claim after lengthy delay
After several years, the insurer eventually wrote to the officer, stating that her activities were inconsistent with the claimed disability and that she had failed to prove to its satisfaction that she was unlikely to be able to work again in any capacity.
The matter proceeded to litigation.
Expert commentary on the court's decision
Supreme Court decides in favour of officer
In the case of Wheeler v FSS Trustee Corporation as trustee for the First State Superannuation Scheme [2016] NSWSC 534, the NSW Supreme Court decided in favour of the former police officer, Ms Joanne Wheeler, and ordered the insurer, MetLife Insurance Ltd, to pay Ms Wheeler her entitlement under the insurance policy.
Insurer’s error of principle in discounting later medical evidence
In making its decision, the court noted that MetLife relied on the terms of the insurance policy, which required an assessment to take place six months after the insured ceased employment.
The court found that the insurer was wrong to place such heavy emphasis on Ms Wheeler’s medical reports at the date of assessment, six months after she finished working, and to discount the information gathered in the subsequent years of the investigation.
The court pointed out that it was an error of principle for the insurer not to take into account all of the evidence emerging between the date of the assessment and the date of the determination. Consequently, MetLife’s determination that Ms Wheeler was not eligible for a payout on the basis of total and permanent disability was invalid.
Expert evidence that officer was permanently disabled
The court accepted Ms Wheeler’s treating psychiatrist’s opinion that her condition was unlikely to be substantially improved by further treatment or medication.
The court rejected the expert report from MetLife’s psychiatrist, owing to the fact that it was at odds not just with the opinion of Ms Wheeler’s treating psychiatrist, but also other doctors who treated her during her various hospital stays over a number of years.
The court preferred the opinion of Ms Wheeler’s treating psychiatrist, who wrote that it is often dangerous to combine anti-depressant medication as the insurer’s psychiatrist had suggested. He also indicated there is no reliable scientific evidence that that approach would be effective and that there is a risk of significant side effects.
Court rejects diagnosis of secondary PTSD disorder
The court also rejected the opinion of MetLife’s psychiatrist that Ms Wheeler had suffered a major depressive illness with secondary PTSD, complicated by alcoholism.
On this point also, the court preferred the opinion of Ms Wheeler’s own psychiatrist, who commented on the findings of the insurer’s psychiatrist by pointing out that “there is no such clinical entity as a secondary Post-Traumatic Stress Disorder”.
Evidence of normal activities does not displace expert opinion
The court found that MetLife placed unwarranted weight on evidence that Ms Wheeler was capable of engaging in certain activities in the same way as healthy people. That evidence was dispelled by expert evidence, which showed that occasional normal activity is nonetheless possible where someone is otherwise incapable of employment owing to their psychiatric conditions.
Importantly, the judge made the following pertinent observations regarding persons suffering from serious psychological conditions:
The judge observed:
The court rejected MetLife’s submissions that Ms Wheeler was exaggerating her illness and instead found that she had been candid about the day-to-day activities she was able to achieve.
Alcohol abuse not significant
The court rejected the opinion of MetLife’s psychiatrist that treating Ms Wheeler’s alcohol abuse disorder may improve her employment prospects.
The court accepted the treating psychiatrist’s opinion that her alcohol abuse disorder was secondary to her PTSD and that her alcohol consumption fluctuated over time in direct proportion to the amount of distress she was experiencing. Ms Wheeler had stayed alcohol free during hospital stays over extended periods and those periods of abstinence had not improved her underlying condition.
Insurer’s unreasonable delay and lack of good faith
The court noted that no explanation had been provided as to why MetLife had failed to respond to letters sent to it for a period of more than two years. During that time, MetLife did not send its investigation reports to the officer’s treating psychiatrist seeking a response, which the court held was a significant omission.
Having spent years investigating, MetLife provided its preliminary decision to refuse the claim by way of letter only after the proceedings had already commenced. Even then, it was only weeks before the hearing that it provided a final decision. That letter gave Ms Wheeler only 14 days to respond. The court found that MetLife’s actions had not been in keeping with its obligations to act in good faith.
In addition to paying Ms Wheeler’s TPD claim, MetLife was ordered to pay her legal costs.
Importance of engaging lawyers in disputes with insurers
Despite the immense difficulty Ms Wheeler faced in functioning normally, with the assistance of her solicitors she was able to progress her claim in the face of resistance from her insurer. She was able to do so initially by having her solicitors agitate for the insurer to provide a decision one way or the other, and subsequently, by commencing litigation when it became apparent no decision would be provided within any reasonable time frame.
By doing so, Ms Wheeler was able to bring matters to a favourable conclusion. This highlights the importance of engaging appropriately experienced solicitors when facing any kind of dispute with an insurance provider.