In 2004 Anthony Hitchens obtained a policy of insurance from Zurich for income protection, death and TPD (total and permanent disablement) benefits.
Three years later while using a drop saw at his home Mr Hitchens was involved in an accident with the saw that resulted in a number of his fingers and thumb being severed. Partial amputations became necessary.
Mr Hitchens lodged a claim with Zurich claiming that his injuries and the psychological condition that developed were such that it was unlikely that he would ever be able to work in any past occupations, or engage in any other occupation to which he was fitted by education, training and experience for the rest of his life. He sought to claim his income protection and TPD benefits.
Zurich initially made monthly payments to Mr Hitchen. They gradually ceased that though and by 2010 denied the claim. They alleged the insurance policies were void because of misrepresentations Mr Hitchen had made and for failing to disclose information he should have.
In his application form (called a life insured statement) Mr Hitchen was required to answer certain questions. He was also obliged to give medical information to a nurse contracted by Zurich.
In the application form, he disclosed he had consulted doctors for stitches and antibiotics, he had been treated for a malignant melanoma in his leg in 1989, he’d been in a car accident that resulted in treatment for only a couple of years afterwards and that he had mild lymphedema of his left leg. He also answered “no’ to the “usual doctor” question and left blank the answer to “last doctor seen” question.
At trial it became clearer that the past medical history was much more serious. Mr Hitchens had had the melanoma as well as lymph nodes removed in 1989. Thereafter he had suffered chronic lymphedema and cellulitis in his leg. He had also received a lengthy regime of treatment for his car accident injuries (over more than 8 years).
Mr Hitchens argued that to the extent he had not revealed certain details it was really a matter for the insurer to investigate those further. He argued the insurer had waived any right to claim he had failed to disclose information by failing to do that.
The court was not convinced of those arguments. It said that the statement that Mr Hitches had been to the doctors for only stitches and antibiotics was substantially false. The principal reason for attending was to obtain strong pain relief for lymphedema and cellulitis. It also found that the description of his lymphedema as only mild was an attempt to conceal the true nature of the condition and of the significant pain medication he was consuming.
Ultimately, the court observed that it was not a insurer’s responsibility to act as a detective. An applicant needed to disclose relevant information. Here, the finding was that Mr Hitchin had deliberately acted in a way that would reduce the likelihood of the insurer asking more questions. It found he had deliberately and fraudulently concealed relevant material matters.
Ultimately then, even though it appears Mr Hitchens had a valid claim because of his serious injuries, he lost his entitlement to claim because of his failure to properly describe his past medical history in the initial application process.
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For more details read the full version of the court judgment: