Court overturns order for income protection policy that may pay out €730,000

Mr Justice Barry O’Donnell said the decision requiring Utmost Paneurope DAC to reinstate the benefits was flawed “by serious and significant errors”. He said it should be set aside and sent back to the ombudsman for fresh consideration.

Utmost claimed the insurance policy could run to around €730,000 by the driver’s retirement date in 2041.

The driver, who is not named, was a member of a group income protection policy provided by Utmost to Irish Rail.

He made a claim under the scheme in November 2014 after he encountered mental health difficulties following a back injury. The claim was accepted and he was paid from December 2014.

The policy provided that after 24 months of payments, the definition of a disability changes and Utmost would only continue to pay the benefit if the illness or injury also prevented the person from performing “the duties of any rail operative occupation” within Irish Rail.

Just before the 24 months ran out, Utmost initiated a review and asked the Irish Rail chief medical officer if the driver was able to perform the duties “of any rail operative occupation”.

The doctor said he was unfit to work as a driver or for “any role within a railway setting, due to the nature and severity of his symptoms” and his medication.

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Utmost got its own doctor to examine him, who diagnosed him as suffering from personality disorder with paranoid narcissistic traits. He expressed the view that there was no reason, from a work mental health perspective, “that he would not be able to engage in other work as a railway operative”.

Utmost informed the driver his payments would cease at the end of February 2017. The driver lodged a complaint with the ombudsman.

In 2019 the ombudsman issued a preliminary decision that ceasing of payments was wrongful, largely because of the absence of a more comprehensive assessment of the driver’s ongoing symptoms and a detailed consideration of the duties of any alternative rail operative occupations.

In 2020, the ombudsman made a final decision upholding his preliminary finding.

Utmost appealed the decision to the High Court. In his ruling, Mr Justice O’Donnell said that in the ombudsman’s decision there was no reference to or reliance on any code of conduct, best practice or other reliable objective measure for the finding that the conduct was unreasonable, particularly where the ombudsman did not appear to make a finding on the contractual obligations.