In an August 2024 Australian Federal Court judgment previously discussed here [“Hemiplegia” – Personal Accident and Sickness Policy (Australia) | Financial Institutions Legal Snapshot], the court found that the insured did not suffer from hemiplegia, and accordingly did not qualify for any benefits under the policy. The court nevertheless considered whether the insured’s condition was caused solely and independently of any other cause in the context of a pre-existing condition. 

The policy defined “Bodily Injury” as:

“identifiable physical injury which is caused by an Accident and solely and independently of any other cause (except Illness directly resulting from or medical or surgical treatment rendered necessary by such Bodily Injury) results in Your death or disablement within twelve months from the date of the Accident.”

and “Accident” as

 “a sudden, unexpected, unusual, violent and specific event which occurs at an identifiable time and place during the Period of Insurance.”

The insured claimed for injuries sustained during an accident in 2020. He had also sustained an earlier injury in 2016. While there was no contest that the 2020 injury was caused by an accident, the question was whether it was caused “solely and independently of any other cause”.  The question was the causal significance of the earlier 2016 injury.

The parties’ experts agreed that:

“(a) although symptomatically returned to normal after the 2016 Surgery, Mr Lowe may have had ongoing spinal microscopic compromise from the 2016 Injury that meant a vulnerability to more severe injury (p. 3, para 2); and

(b) the 2020 Injury was almost certainly made worse by the neural vulnerability created by the 2016 Injury (p. 3, para 5).”

The court reviewed the Australian authorities on the legal principle as to the meaning of the expression “solely and independently of any other cause”. 

The parties accepted that the approach adopted by the court in Preston, which drew a distinction between two situations was applicable to the policy under consideration:

“The first is where a dormant or inactive condition creates a propensity in the insured to suffer disabling consequences from what otherwise might be a relatively minor injury. The second is where a significant medical or physical condition is aggravated by the injury or combines with the injury so as to result in disability.”

In the first situation the accidental injury will ordinarily be regarded as the sole, direct and independent cause of the disability. 

In the second situation, the court is likely to conclude that the accidental injury is one of two concurrent causes and is therefore not the sole, direct and independent cause of the disability. 

On analysis of the evidence the court said:

“The 2020 Injury was undoubtedly made worse by the 2016 Injury. Both the 2016 Injury and the 2020 Injury were to the same part of Mr Lowe’s spine, located at the C5/6 level. The effect of Dr Coyne’s evidence is that it is more likely than not that both the 2016 and 2020 Injuries contributed to Mr Lowe’s current condition. The point is starkly expressed by Dr Mobbs in her report, to the effect that the 2020 Injury was almost certainly made worse by the neural vulnerability created by the 2016 Injury, a proposition with which Dr Coyne agreed.

Nonetheless, the authorities establish that the language used in the Policy does not preclude a claim by the insured simply because he had a pre-existing condition that can be said to have contributed in some way to his injury. As Cardozo CJ observed in Silverstein, the infinite interplay of causes makes it impossible to segregate any single cause as operative to the exclusion of all others. On the approach in Preston , the real question is whether the 2016 Injury left Mr Lowe with a “dormant or inactive condition” or a “significant medical or physical condition”.         

The court held that under the dichotomy in Preston, this was a case in which a dormant or inactive condition created a propensity in the insured to suffer disabling consequences.  The insured’s injury was made worse by that propensity but was still caused by an Accident “solely and independently of any other cause”. 

Causation in these types of cases is often a tricky enquiry dependant on the facts of each case.   If the intention is to exclude a pre-existing condition, that should be expressly and clearly stated. 

The leading case in South Africa,  more generous to claimants, is Concord Insurance Co Ltd v Oelofsen 1992 4 SA 669(A)

Lowe v Certain Underwriters of Lloyds of London Lowe v Certain Underwriters at Lloyd’s of London Subscribing to Policy Number ATCSI00100 [2024] FCA 858 – BarNet Jade – BarNet Jade