The 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. The claim was heard in the Admiralty Court in 2012. Mr Justice Teare concluded that there was a real possibility, but not more likely than not, that Mr Braganza had fallen overboard, but the evidence was not sufficiently cogent to warrant a finding of suicide on the balance of probabilities.The claim for death in service benefits was upheld and the claim for damages was rejected. Mrs Braganza did not appeal the claim for damages but BP did appeal the contractual award. In the Court of Appeal it was held that the conclusion of suicide was a reasonable one in all the circumstances. Mrs Braganza appealed to the Supreme Court whose judgment was handed down last month.
According to the lead judgment of Lady Hale BP should not simply have accepted the view of the investigation team that suicide was the most likely explanation. The purpose of the investigation was to review systems and identify improvements rather than establishing the cause of death. For the purpose of establishing eligibility for the death in service benefit the question was whether there could be a positive finding that Mr Braganza had committed suicide. “[BP] should have asked [itself] whether the evidence was sufficiently cogent to overcome the inherent improbability of such a thing.” Lady Hale noted that there no positive indications of suicide, such as a suicide note or evidence of suicidal thoughts. there was “no evidence of over-whelming personal or financial pressures of the sort which would be likely to lead a mature professional man to take his own life, no evidence of psychiatric problems or a depressive personality”. It was also note that Mr Braganza was a Roman Catholic so that, for him, suicide was a mortal sin. Accordingly, the appeal succeeded and Mrs Braganza was entitled to receive the death in service benefit plus interest.
It is worth noting that although Lords Kerr and Hodge agreed with Lady Hale, Lords Neuberger and Wilson did not, thereby rendering it a finely balanced 3:2 decision. Emphasising the difficulty the dissenting judgments concluded that, on the available evidence, it could reasonably have been concluded that Mr Braganza had committed suicide.