‘Unlikely ever’ definition in insurance claims
In a TPD insurance claim it is common to see a definition that refers to the ability of a claimant to work in terms of "unlikely ever." Much debate has surrounded what is meant by the term and what standard of proof was required to meet the definition. In civil cases the term unlikely is determined on the balance of probabilities. In percentage terms unlikely can be expressed as a less than 50% chance. It followed that where a seriously injured person had a less than 50% chance of returning to work within their education, training and experience then they would be found to be TPD.
This way of assessing likelihoods has drawn a fair balance between the interests of claimants and insurers in TPD claims. Fairly, if a claimant’s likelihood of returning to work was less than 50% then in line with the purpose of TPD insurance, a claim ought to be paid.
A recent court decision in NSW has cast some doubt on this approach. The decision of TAL Life Ltd v Shuetrim  NSWCA 68 has now expressed the balance of probabilities in different terms. The NSW Court of Appeal has suggested that a mathematical approach is not helpful and that likelihoods should be expressed in terms of chance. On the one hand if there is a real chance that someone may return to work within their education, training and experience then they will not be TPD. On the other hand if the chance of a return to work is merely remote or speculative then they will be TPD. Arguably this will make it more difficult for seriously injured claimants to prove their case. A real chance that a person will return to work even if it is a less than 50% chance will still preclude a claimant being successful.
Possibilities Vs Probabilities
The Court seems to bring into play possibilities instead of probabilities when it states the following:
“The critical distinction is between possibilities which are readily contemplatable even though they may not be more probable than not, and possibilities which are remote or speculative.”
What happens though if there is no real prospect of returning to work but the chances are better than speculative or remote? Most cases will fall into this bucket and the reasoning of the NSW Court of Appeal is unhelpful for the majority of cases. In most cases there is always some evidence that it might be possible for a return to work but if it is merely possible instead of probable doesn’t that mean it is unlikely?
It is useful to consider what the High Court has said about the standard of proof in civil matters. Latham CJ in Briginshaw v Briginshaw (1938) 60 CLR 336 stated:
“There is no mathematical scale according to which degrees of certainty of intellectual conviction can be computed or valued. But there are differences in degree of certainty, which are real, and which can be intelligently stated, although it is impossible to draw precise lines, as upon a diagram, and to assign each case to a particular subdivision of certainty. No court should act upon mere suspicion, surmise or guesswork in any case. In a civil case, fair inference may justify a finding upon the basis of preponderance of probability. The standard of proof required by a cautious and responsible tribunal will naturally vary in accordance with the seriousness or importance of the issue—See Wills’ Circumstantial Evidence (1902), 5th ed., p. 267…” (Emphasis added)
In reality trying to suggest these definitions require a higher standard than centuries of legal understanding of what likely and unlikely mean is pushing the pendulum too far. The phrase still includes the word “unlikely.” TPD must be judged on the balance of probabilities as it is ordinarily understood. The addition of the word “ever” merely connotes a sense of permanency to the likelihood or unlikelihood of returning to work. That is to say at the point of assessment is this person unlikely to return to work ever?
Whilst a mathematical approach is imprecise, so is the approach of the NSW Court of Appeal. That is the nature of the balancing act that is the balance of probabilities. To suggest however that unlikely means something even less than a 50% chance puts the test too high.
If you are suffering from an injury or illness, call 13 43 63 to speak with our superannuation and TPD lawyers as you may be have a superannuation claim. Our Queensland offices are in Brisbane, Logan, North Lakes, Ipswich, Toowoomba, Gold Coast, Sunshine Coast and Cairns.