I have been following this thread with interest as I am a member of LIPS.
I quite honestly cannot understand where the individual in question (and his supporters) get off claiming he is entitled to a claim. Granted, I have got the story only from what is written here but it appears highly likely the pilot in question had a preexisting condition (which is disallowed under the LIPS policy). Only a very small percent of all color blindness cases are not hereditary and happen due to eye disease (in my reading).
I was interested (and surprised) to learn that someone who is born color blind is still eligible to hold an FAA license and was also surprised to learn there are 7 different Pseudoisochromatic test plates allowed by the FAA (3 of which inc variations on the infamous Ishihara plates). What surprised me was if a person knows he/she is born color blind they can go to an optometrist or ophthalmologist (not an FAA AME) to take the FAA-approved "alternative tests" along with a standard FAA eye exam. If passed, when he/she goes to the FAA AME for their aviation medical and submits the test results the AME has no choice but to accept the eye test.
Not knowing this individual; I am going to speculate.
1) I suspect he had a color deficiency issue since birth. Using one of the alternative tests, he was able to legally hold an FAA license with his condition.
2) However, when coming to EK/GCAA (where the Ishihara plate is the accepted standard test with the Farnsworth lantern as the only alternative test), is it possible he was aware of this (through info given over Pprune and others who have interviewed with EK) and memorized the Ishihara plates? (I had a friend years ago who memorized the eye chart forward and backwards!).
3) He does the EK medical with a not-too-thorough medical assistant (most of whom now know the "memory scam" and go back-to-front or random throughout the book; last time she turned the book upside down and had me draw the number with my finger on a couple plates!) and passes the color blindness test.
4) Subsequently he gets discovered during a routine EK medical, claims he has never been color blind, collects the EK money (which he is entitled to as he cannot hold a GCAA license with his condition and what they will accept as far as color blindness is concerned) and looks to LIPS for long term disability payments.
5) At this point I would expect LIPS would do a thorough examination of the medical history of this individual prior to approving long term disability payments. Since he had an FAA license, there will be a full medical history on every license renewal he did since he did his PPL. Either he had a preexisting condition (which is most likely and would be documented on those previous medicals) or he has a degenerative eye disease which would be easily diagnosed by any trained Aviation Ophthalmologist or board certified eye surgeon.
Not knowing to what extent this individual provided his complete medical documentation history and/or allowed himself to be thoroughly examined by a trained aviation Ophthalmologist (which I would personally go out of my way to do if I was in his situation), it is difficult to claim this issue is "unfair". If he provided complete medical documentation that proves he had no history of color blindness AND he submitted to an exam where the reason for the color blindness was found to be a degenerative eye disease; THEN he would have had a claim and a denial would have been unfair. Was this done? No one has said.
In addition, you mentioned he went on to "greener pastures". If that pasture is a flying position, irrespective of what was written above, he would not be eligible for LIPS payments anyway (which cease upon recovery of ANY AVIATION LICENSE as far as I am aware). As such, if he went back to the U.S. and holds a valid FAA license (which he would still be able to hold given the "alternative" color blindness tests the FAA allows) he is not entitled to LIPS payments (as he is not disabled and unable to work as a pilot); he has lost his job with Emirates due to not being able to pass a GCAA exam but is fully capable of holding an FAA license. The two are different cases.
In short:
-the EK payout is a 1-time event because you cannot operate as a pilot with EK because you cannot pass the GCAA medical;
-the LIPS payout is ongoing because you cannot operate as a pilot ANYWHERE because you cannot pass ANY aviation authority medical exam and cannot be employed as a pilot.
I applaud LIPS for taking a hard look at each and every case. That is my money (and that of my fellow pilots) that they are playing with. I want to be sure it will be there for me if I truly need it (as it has for the 3 unfortunate pilots who are currently collecting). That means a CATASTROPHIC medical condition which precludes me from ever flying ANYWHERE again.
I am sorry to hear about this fellow as no one wants to have this happen to them. I hope every dime I put into LIPS will never have to be used by me but I damn well want to feel secure they are there to protect me.
My opinion for what its worth.