Insurance Company Migdal Wins Partial Recovery of Overpaid Benefits
Migdal insurance company sought approximately 175,000 shekels from a woman who received excess disability benefits due to a calculation error. The court ruled that the woman is required to return only 20 percent of the total amount.
The Tel Aviv Regional Labor Court has partially upheld a lawsuit filed by the Migdal insurance company against an insured woman who, following a stroke, received disability benefits for years that exceeded her entitled amount. Judge Merav Havkin determined that while the overpayment resulted from an error, the woman is only required to return 20% of the funds. The final amount will be determined in a supplementary judgment.
Background of the Case
The case involves a 50-year-old woman who suffered a stroke in 2004. Prior to the incident, she earned 3,500 shekels per month and was covered by a collective insurance policy provided by her employer, which included 75% salary coverage for loss of working capacity. Her claim was approved, and she received disability payments for several years.
In 2019, Migdal notified her that she no longer met the criteria for total loss of working capacity. Following a legal challenge by the woman, the company agreed to continue full payments until the end of 2021. During a subsequent audit, Migdal discovered that the woman had been receiving excessive payments since July 2013. In September 2020, the company filed a lawsuit for 174,860 shekels, citing an error in the input of the compensation amount and the indexation base date.
Court Findings
The insured argued that a professional insurance firm should be held accountable for its own clerical mistakes. She stated that she believed the payments were calculated correctly and had already spent the funds on living expenses and medical treatments. She filed a counterclaim for the difference in benefits and compensation for non-pecuniary damages.
Judge Havkin confirmed that Migdal proved the monthly payment had jumped from 3,405 shekels to 5,229 shekels due to an error. However, the court rejected Migdal's claim that the insured was aware of the overpayment and remained silent intentionally. The judge found the woman's testimony regarding her use of the funds to be logical.
The court emphasized the power imbalance between the parties, noting: "There is a real power gap between the plaintiff, an insurance company, and the defendant, a disabled person who lost her working capacity at a young age and relies on benefits for her livelihood." Consequently, the court ruled that a full refund was inappropriate and granted an 80% exemption on the repayment. The counterclaim was dismissed in its entirety.
• To read the full judgment – click here
• The article is in collaboration with the Israeli legal website PsakDin
• Migdal's representative: Adv. Roi Zeifer
• Insured's representatives: Adv. Dana Greenwald and Adv. Oded Yechiel
• Adv. Alon Bromberg specializes in insurance
• The author did not represent in the case
• The article is courtesy of the Israeli legal website PsakDin
• Ynet is a partner of the PsakDin website
