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Death benefits and the improbability of suicide

BP_signThe decision of the Supreme Court in the case Braganza -v- BP Shipping and another concerns the difficult topic of entitlement to death benefits in the event that an employer considers that an employee has committed suicide.

It is well known that life insurance policies often include “suicide clauses”, sometimes applying an exclusion for a period of time after taking out the policy, e.g. two years. One practical problem with this is that when one policy is replaced with another the exclusion period tends to start over again. Another issue is that claims can be resisted on the basis of non-disclosure of mental health problems or medical including psychiatric conditions.

The same issue can arise with death in service benefits. Mr Braganza worked as a chief engineer on BP’s oil tanker the British Unity. Between the hours of 1.00 a.m. and 7.00 a.m. on 11 May 2009 and while the ship was in the mid-North Atlantic Mr Braganza disappeared. No-one knows what happened to him but the employer formed the opinion that he had committed suicide by throwing himself overboard.

His contract included an entitlement to death benefits payable to his widow but also included the following exclusion:

For the avoidance of doubt compensation for death, accidental injury or illness shall not be payable if, in the opinion of the Company or its insurers, the death, accidental injury or illness resulted from amongst other things, the Officer’s wilful act, default or misconduct whether at sea or ashore …

On this basis entitlement to death benefits was denied. Therefore, the question for the court was not to decide what happened to Mr Braganza but to decide whether or not the employer was entitled to form the opinion which it did.

On arrival in New York an investigation was carried out as is the usual procedure in such circumstances. Crew were interviewed under caution and it was concluded that Mr Braganza was lost overboard, presumed drowned, but no finding was made concerning the reason for his presumed drowning. BP then set up its own enquiry, dealing with health and safety issues. Although not specifically charged with identifying the cause of death the possibilities were narrowed down to an accidental fall from the vessel or suicide. The final version of the report concluded that “having regard for all the evidence the investigation team considers the most likely scenario to be that the C/E jumped overboard intentionally and therefore took his own life”.

On 13 November 2009 Mrs Braganza was notified, via her solicitors, that the claim for death in service benefits was rejected since, on the basis of the team’s report there had been a “wilful act” by Mr Braganza, thereby triggering the exclusion clause.

Mrs Braganza brought a claim for $230,265 death in service benefits and $1.325m damages for negligence.