OGH on Legal Capacity and Mental Illness

Feb 9, 2024 Benn-Ibler Rechtsanwälte

A person has legal capacity if they can appreciate the scope of a particular transaction and the consequences of their actions, and act in accordance with that understanding.

The plaintiff had taken out a life insurance policy with the defendant insurance company. Following her husband’s suicide in June 2019, she wished to claim benefits under that policy. In a letter dated 2 October 2019, the defendant refused to pay out insurance benefits and drew the plaintiff’s attention to the expiry term pursuant to Section 12 (3) of the Austrian Insurance Contract Act (Versicherungsvertragsgesetz, VersVG).

However, from June until around the end of October, the claimant suffered from severe post-traumatic stress disorder (PTSD). This affected her perception and her ability to keep track of things. It was for this reason that she was not aware of the scope of the letter of claims rejection and the deadline.

The plaintiff sought payment of the insurance benefit in a claim dated 6 September 2021. Due to the expiry of the limitation period, the defendant pleaded preclusion. Preclusion means that a right is lost because a legal act was not performed within a certain period.

The OGH’s opinion was that the plaintiff did not have legal capacity at the time of receipt of the letter from the insurance company.

A qualified refusal of cover is a declaration of intent which must be received, and the effective receipt of it therefore requires a recipient with legal capacity. The plaintiff lacked capacity at the time of receipt. Since she did not possess the requisite legal capacity, the letter was never effectively received by her and the deadline for bringing an action therefore never effectively started to run.

The fact that the plaintiff later on regained legal capacity has no bearing on the matter. The ineffective receipt of the letter from the insurance company cannot be cured by the subsequent cessation of the suspending circumstance.

Only if the defendant had sent a second statement refusing insurance cover to the plaintiff would the period for bringing an action have started to run.

OGH 7 Ob 148/23z (22 November 2023)