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Grappling with issues in Total and Permanent Disablement (TPD)

Grappling with issues in Total and Permanent Disablement (TPD)

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Increased awareness amongst lawyers of group life TPD policies within superannuation packages, and reductions in benefits in statutory schemes, have lead to very significant increases in claims on and litigation over TPD policies in recent years.  The number of firms acting on both sides of the record has grown rapidly, with more and more lawyers now grappling with issues in TPD.

 

While the underlying factual questions about capacity for work or employability are the same as those that arise in other areas of personal injury law, the contractual basis of the cause of action means that the legal tests to be applied are particular to this field, and to the terms of each policy.

One contentious issue lawyers have been arguing over in TPD is how broadly the concept of ”education, training or experience” (ETE) at a “relevant date” should be construed.

What does “education, training or experience” (ETE) at the “relevant date” include?   

 

Many group life insurance policies have TPD definitions similar to:

“…unable to work for 6 consecutive months and in our opinion is incapacitated to such an extent as to render the Insured Person unlikely [unable] ever to engage in or work for reward in any occupation for which they are reasonably qualified [capable of performing] by their education, training or [and] experience.”

These policies generally require the question of TPD to be determined at a specified date in the past, eg at the end of the 6 month period (the “relevant date”), and by reference to the person’s education, training or experience at the relevant date.

The question then arises of how broadly, or narrowly, the concept of a person’s education, training or experience at the relevant date is to be defined.

Birdsall v M.T.A.A. Superannuation (22 April 2015) NSW Court of Appeal

The N.S.W. Court of Appeal (Basten, Meagher and Gleeson JJA) recently considered this question in Birdsall v Motor Trades Association of Australia Superannuation Fund [2015] NSWCA 104 (22 April 2015).

Mr Birdsall worked as an automotive mechanic.  He suffered an injury to his right wrist that prevented him from working as a mechanic. 

The Trustee and Insurer contended that based on his education, training or experience Mr Birdsall was capable of gaining employment in the automotive industry as either a motor vehicle parts interpreter, a sales assistant, or in a customer service / advisory role.  That was despite Mr Birdsall never having previously worked in any of these roles.

Mr Birdsall was physically capable of performing each of these roles.  The evidence was that to be a spare parts interpreter he would need to undertake a TAFE course to learn particular computer software and that to be a sales assistant he would need to learn to operate a cash register.  With his existing skills he had the capacity to undertake and successfully complete such training.

 

Mr Birdsall argued that as these jobs each required some degree of re-training they were not within his education, training or experience at the relevant date.

 

The Court of Appeal (at [77]-[83], [32], [85]) upheld the primary judge’s finding that at the relevant date Mr Birdsall was not TPD, and the:

“77. …conclusion that the need for this further training did not mean that the appellant [Mr Birdsall] was not already reasonably capable of performing the roles to which it was directed. The expression “reasonably capable” recognises the reality that a person may have to undertake specific training or certification to enable him or her to engage in particular employment for which he or she is otherwise qualified by education, training or experience. That training or certification may be available in the form of a TAFE or other certification course or from the employer. The job advertisements in evidence show that different employers place different emphasis on particular aspects of the skills necessary to undertake employment of the same kind and recognise that some training may be required to fit the employee’s skills to the particular employment. …”

 

The Court referred to it’s previous decision in Hannover Life Re of Australasia Ltd v Dargan [2013] NSWCA 57; 83 NSWLR 246 in which it found that an experienced truck driver was not TPD as he was fit to be a taxi driver within his education, training or experience even if he had to obtain a certificate and complete a training course to be able to work as a taxi driver, and distinguished Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913; 16 ANZ Ins Cas 90-142 in which it was held that office work was not within the education, training or experience at the relevant date of a labourer who had injured his back.  The fact that Mr Halloran subsequently undertook TAFE studies in office administration and computing and obtained office work did not mean that he was not TPD within his existing education, training or experience at the relevant date.

 

The extent to which additional “specific training or certification” would be reasonable for a person to undertake to allow them to obtain work otherwise within their education, training or experience at the relevant date is clearly a question of fact and degree in each case.

 

However, the argument that jobs for which a person is reasonably qualified by ETE at the relevant date cannot include jobs which a person has not previously undertaken or for which they need some further training or certification has clearly been rejected as involving too narrow an interpretation of this concept.

 

Notes

 

The Earning Capacity Assessment report of Dr Keller and Ms Lee referred to in Birdsall was prepared by ECA.

 

ECA is the sponsor of the ANZIIF Life Insurance Breakfast on Thursday 22 October 2015.

 

https://theinstitute.com.au/events/events-calendar/2015/10/22/nsw-annual-life-insurance-breakfast 

 

Authority Links

 

Birdsall v Motor Trades Association of Australia Superannuation Fund [2015] NSWCA 104

https://www.caselaw.nsw.gov.au/decision/5534772ae4b0fc828c995edf

 

Birdsall v Motor Trades Association of Australia Superannuation Fund [2014] NSWSC 632

https://www.caselaw.nsw.gov.au/decision/54a63da63004de94513dbe0f

 

Hannover Life Re of Australasia Ltd v Dargan [2013] NSWCA 57; 83 NSWLR 246

https://www.caselaw.nsw.gov.au/decision/54a639903004de94513da72a

 

Halloran v Harwood Nominees Pty Ltd [2007] NSWSC 913; 16 ANZ Ins Cas 90-142

https://www.caselaw.nsw.gov.au/decision/549fde7f3004262463c11f56

 

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Grappling with issues in Total and Permanent Disablement (TPD)
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