Medication, loss minimisation and daily sickness benefits

In both social and private insurance law, the principle of the duty to minimise losses applies (Art. 21 para. 4 ATSG and Art. 38a VVG). After the occurrence of the feared event, the person entitled to claim is obliged to minimise the damage - in the case of daily allowance insurance for illness, the extent of the inability to work - as far as possible. In the case of mental incapacity for work, insurance companies therefore often impose the obligation to undergo psychotherapy and to take medication. This represents an encroachment on the personal freedoms of an insured person. The question arises as to the permissibility of such requirements. This will be analysed below.

In the area of private insurance law, insurance policies are financed on a voluntary basis. The case law under public law can therefore only be applied here to a limited extent. An example of this can be found in judgement 4A_111/2010 of 12.07.2010. Here, the case law on the ATSG was declared applicable insofar as the structuring of loss minimisation in accordance with Art. 21 Para. 4 ATSG represents a concretisation of the rules of good faith (Art. 2 Para. 1 ZGB). In the judgement, the court dealt with the change of occupation after a prolonged illness. However, as taking psychotropic medication is not the same as a change of profession, the following will show whether and to what extent the strict case law on taking medication in social insurance law should also be applied in private insurance law.

In general, the expected reduction in loss must be in reasonable proportion to the associated rescue effort and the probability of success of the measure. If only a small reduction in loss can be achieved with the required measure or if the chance of success is small, the measure is unreasonable in any case if it is associated with high costs or otherwise jeopardises the legal interests of the insured person that are worthy of protection (BSK-VVG Süsskind RN 27 to Art. 38a).

For example, the Federal Supreme Court itself recognised in a case in which the insurance company demanded a change of occupation and discontinued daily allowance payments after the expiry of a transitional period that this was inadmissible due to the lack of feasibility of the change of occupation (judgement 9C_177/2022 of 18 August 2022). The insured person worked in the construction industry, where retirement at the age of 60 is guaranteed under certain conditions. At the time when the insured person should have looked for another job to minimise the claim, he was 59 years old and still had less than 1.5 years of professional activity left until retirement. The possibility of changing jobs was assessed on the basis of actual labour market conditions. A change of occupation or job was not realisable in the specific case and the daily allowance was therefore still owed (E. 6.4). All the more reasonableness must be taken into account when taking medication as a direct intervention in the physical and possibly psychological integrity of a person.

In the case of personal injury, the individual needs and state of mind of the insured person must be taken into account to a greater extent, as the interest in integrity must be weighted heavily and subjective factors must be taken into account (BSK-VVG Süsskind, RN 28 f. on Art. 38a). Since insurance companies, unlike social insurance institutions, do not act in a sovereign capacity, the insured person can decide on their treatment and the therapy method to be used themselves (loc. cit. RN 41 on Art. 38a). The Cantonal Court of Basel-Landschaft also ruled that the insured person was entitled, after consulting their treating doctor, to refrain from taking medication recommended by the insurance company's medical examiner if, based on experience from previous treatment, it could be assumed that the insured person would find a way out of their depressive state of health even without psychotropic medication with weekly psychotherapy (decision of the Cantonal Court of Basel-Landschaft 731 17 96 of 28 September 2017, E. 5.4.2.2). It is also postulated that in the event of a genuine conflict of conscience (refusal of a blood transfusion with reference to freedom of belief and conscience), the breach of the duty to minimise damages is not culpable within the meaning of Art. 38a para. 2 VVG.

Accordingly, with regard to loss minimisation, the question to be asked is not whether or not medical treatment is being administered on the basis of generalised assumptions, but whether the insured person is undergoing medical treatment appropriate to their condition and whether they are complying with the specialist's instructions. With various treatment options, it is up to the insured person to decide which one to choose. In terms of proportionality and following a case-by-case assessment, a distinction must also be made between acute and severe illnesses and moderate illnesses that are in remission. If the insured person is only (still) partially unable to work and the damage is therefore not (or no longer) so great, the personal factors of the insured person must carry all the more weight. If an improvement is presumed to occur without medication over a period of six months or a year and this period can - hypothetically - only be shortened by a few months with medication, the presumed reduced loss is disproportionate to the effort required by the insured person to start and stop taking medication over a period of months, to bear the costs of the medication and to undergo a form of therapy that he or she personally dislikes.

If one assumes the existence of a duty to minimise damages in the form of drug-based psychotherapy, the question then arises as to what should happen in the event of a breach of duty. In practice, the insurance company usually announces that the (hypothetical) use of medication is assumed to result in an improvement in health and that benefits will therefore be discontinued. However, the law stipulates that the compensation owed by the insurance company may be reduced by the amount by which the insurance benefit would have been reduced if the duty to minimise the claim had been observed (Art. 38a para. 2 VVG). The burden of proof for this lies with the insurance company. The insurer must therefore demonstrate a hypothetical course of the illness, i.e. the extent to which the condition would have improved more quickly if drug therapy had been taken up. This is unlikely to be possible in the case of mental illnesses.

This article first appeared in iusNet HVR, 25 January 2024.

You can read the unabridged article at: https://haftpflicht-versicherungsrecht.iusnet.ch/de/fachbeitraege/schadenminderungspflicht-aussch%C3%B6pfung-der-therapiem%C3%B6glichkeiten-der (paywall)