One of the User's isn't able to create " NEW CASES" using the " SET REGARDING " functionality.

when the User clicks on SET REGARDING icon  in Outlook  -  CRM 2011 opens the LOOK UP RECORD window  - After clicking on the NEW button - CRM doesn't open a new window either to create a case /  COntact or an Organisation. 

There are other users with the same permission rights as this user who is having issues but for them it's working fine.

Has anyone faced this problem ??