The High Court has set aside a Financial Services Ombudsman finding that a secondary school teacher’s disability insurance complaint was not substantiated, after concluding that the Ombudsman made a serious and significant error over her scheme membership and relevant medical evidence.
In a judgment delivered on 15 January 2014, Mr Justice Michael White directed the Ombudsman to reconsider the complaint. He said the teacher should be treated as a member of the Association of Secondary School Teachers of Ireland (ASTI) Salary Protection Scheme until 18 March 2010, when Zurich Life Assurance plc told her that its refusal of her claim remained unchanged after review.
The teacher stopped working in September 2005 after becoming ill. She claimed under the group disability scheme in June 2006. Zurich, then known as Eagle Star Insurance, declined the claim in October 2006, saying the information available did not show that she was totally incapable of carrying out a secondary teacher’s occupational duties. It upheld that decision in February 2008 and again after a further review in March 2010.
The Ombudsman found in May 2013 that the complaint was not substantiated. The determination accepted Zurich’s position that the relevant medical evidence had to show whether the teacher met the policy definition of disability when she made her claim. It also concluded that she was no longer eligible for the scheme after her claim was declined, and noted that premiums collected after September 2006 had been refunded. The Ombudsman acknowledged that an administrative error had misled her by continuing to acknowledge appeals when it considered her ineligible.
On appeal, the High Court held that the October 2006 refusal did not automatically end her membership. By accepting premiums and allowing appeals and a further review, Zurich had treated her as within the policy’s relevant provisions until its letter of 18 March 2010. The court said medical evidence bearing on her condition and ability to work before that date could be relevant to the complaint, even if submitted later. It identified several later reports that referred to matters before the cutoff and directed that they be considered.
The court did not order an oral hearing. It said that decision remained within the Ombudsman’s discretion. Nor did it decide whether the teacher met the policy’s disability definition or was entitled to payment. It set aside the Ombudsman’s finding and remitted the matter with directions on scheme membership and the medical evidence to be considered.