The reasonableness of the insurer’s repudiation of permanent disability claim caused by trauma : PWR v Discovery Life Ltd [2023] ZAGPJHC 282

Abstract

The recent High Court judgment in PWR v Discovery Life Ltd ([2023] ZAGPJHC 282) (PWR) is of considerable interest. First, and most obviously, it addresses the vexed question of whether the insured, who had suffered a string of deeply traumatic events that left him with a combination of post-traumatic stress disorder and unspecified bipolar mood disorder, was totally and permanently unable to carry on his profession as a stockbroker when the cover expired on 30 November 2015. The answer to the first-tier question depends on two key issues. The initial issue concerns whether the insured’s condition, and the incapacity it triggered, had become permanent by 30 November 2015. The second is whether, if the insured’s condition had become permanent on 30 November 2015, the insurer was nevertheless justified in repudiating the claim. That question invites consideration of the appropriate test to be applied in assessing a life-insurance company’s repudiation of a claim. It cannot be gainsaid that in cases of mental illness brought on by trauma, there will inevitably be a lag between the advent of the permanent incapacity and the point at which anybody can say that the incapacity is enduring. The nature, causes and consequences of the insured’s condition, coupled with an assessment of the insurer’s reaction to the insured’s claim, call for academic comment.