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| Thelson Desamour |
In litigation related to long-term disability benefits and, to a lesser extent, accident benefits, a determination which may impact assessment by an insurer is whether a plaintiff has been awarded disability benefits from Canada Pension Plan (CPPD). In order to be awarded the same, an applicant must submit documentation which, in the eyes of the assessor, meets the threshold of a severe and prolonged disability.
Notwithstanding the definition of disability for a specific insurer for any occupation that is different from the test set out for CPPD and entitlement to long-term disability (LTD) benefits that is based in a contract typically with a percentage of disability to be demonstrated, an award of CPPD is sometimes viewed as definitive in the LTD context. When CPPD has been awarded to an applicant, it isn’t uncommon for it to be announced to defence counsel with only slightly less enthusiasm than that of expectant parents at a gender reveal party. The announcement is then generally followed up with comments to the effect that the federal government has deemed the plaintiff to be disabled.
The aforementioned may be persuasive but is not, in fact, determinative. Often the documents sent for assessment by CPPD are not a complete picture of the applicant’s condition, and more often than not do not include documents that would not support the plaintiff, such as assessments conducted by the insurer during the adjudication phase or in litigation phase.
The double-edged sword as it relates to CPPD is demonstrated when the plaintiff’s counsel has another client where CPPD is not awarded and the reconsideration and/or appeal has been dismissed.
It is remarkable how quickly counsel will attempt to downplay the decision from CPPD from week to week, particularly when their client is denied CPPD benefits. Curiously, in such an instance it is no longer the federal government agreeing with the insurer that the plaintiff is not disabled and should resume employment, but a wayward assessor/bureaucrat, etc.
The next double-edged sword that is wielded by the defence is that of the use of surveillance. In my respectful view, defendants have limited tools in their defence. Aside from reliance on their respective polices and regulations, insurers have two main tools: assessments and surveillance.
A picture can be worth a thousand words and as one of the insurer’s few tools, surveillance can be a critical piece of evidence illuminating whether or not a plaintiff is disabled, whether the plaintiff sustained general damages in excess of the deductible or whether there is a viable income loss claim.
A few years ago in the defence of an accident benefits action, a claimant was claiming income replacement benefits because he was no longer able to work following a collision. At the claimant’s examination under oath (akin to discovery), the claimant gave evidence supporting the severity of the collision, his injuries and confirmed that he had not worked and was not able to work post-accident. Thereafter, the plaintiff was presented with surveillance which demonstrated that the claimant was at work and worked on successive days. The accident benefits claim was withdrawn in short order. Had surveillance evidence not been obtained in that case, presumably myself and opposing counsel would have had to rely on the perceived veracity of the claimant in the absence of assessments.
Surveillance evidence is not always as probative or conclusive as just cited, however. Oftentimes surveillance is benign. The double-edged sword that insurers need to be wary of in utilizing surveillance is at least twofold. First, after having obtained surveillance, it must be reviewed objectively. In a case I’ve referenced before, Lalonde v. London Life [2001] O.J. 6088, counsel and adjusters must review surveillance for what it is and is not. In Lalonde, the court disagreed with the insurer’s view that the surveillance evidence showed the plaintiff “running” as opposed to quickly shuffling, and lifting football-sized stones as opposed to much smaller items.
Secondly, although it is a jury decision, the amount of surveillance may also be a consideration for insurers. In the recent decision of Baker v. Blue Cross, in which the jury awarded a significant punitive damages award against the insurer ($1.5 million), the insurer had obtained in excess of 300 hours of surveillance. Although speculative on my part, the aforementioned amount of hours of surveillance may have been deemed excessive given that the jury did not find it persuasive and the jury may have been put off by it.
Lastly, with regard to surveillance and the amount obtained by Blue Cross, the insurer should consider the financial costs. Investigators do not typically offer their services on a pro bono basis; as such, the law of diminishing returns could be at play when obtaining significant hours of surveillance. In further speculation, it may be that the jury in Baker may have held the view that those resources used for surveillance could have been better utilized elsewhere.
The last double-edged sword in this piece typically advanced by the plaintiff bar is ATE (after the event) insurance. ATE insurance has been a growing influence in personal injury litigation and is a beneficial tool to assist meritorious plaintiffs in bringing their cases forward. Combined with the contingency fee agreement, meritorious plaintiffs who do not have the financial resources to advance their case in the ever more costly realm of personal injury is most certainly an access-to-justice concern.
ATE insurance assists plaintiffs if the policy is purchased on a firm-wide basis or case-by-case basis by covering certain costs if a plaintiff abandons their claim or there is a cost award against the plaintiff after trial. In such an instance, depending on the coverage obtained, the ATE insurance can cover the lawyer’s disbursements, costs or both.
As necessary and as beneficial as ATE insurance may be for some meritorious plaintiffs from an access-to-justice perspective, the double-edged sword as it relates to the same is that it can also negatively impact access to justice in terms of having a matter dealt with as quickly as possible.
With contingency agreements working in hand with adverse costs insurance, not only have meritorious plaintiffs advanced their cases, but plaintiffs with less-than-meritorious cases have done so as well. With less risk associated with bringing forward a claim and maintaining the claim, having a sober review of one’s case is diminished and cases can have a longer shelf life. One plaintiff’s counsel advised me that one of the benefits of an ATE package is that they can negotiate from a stronger position because the impact of an adverse costs award is mitigated.
On the other hand, there is the school of thought that ATE insurance may further encourage counsel to take matters to trial because the plaintiff will be in a position to pay costs. With ATE insurance, counsel will conceivably carry more files and potentially for longer periods of time, which can negatively impact scheduling, the advancement of other meritorious files and contribute to court backlogs where the time delay can also be an access-to-justice issue. If defence counsel are taking more files to trial because of ATE insurance, this may cause an increase in trial scheduling issues.
Given the above, when faced with a double-edged sword, whether it’s one cited above or another, the question that arises is: how should one employ that double-edged sword? Like the bull entering the glass shop, the answer is with caution.
When employing these tools, a non-exhaustive list of questions that should be considered is: is too much emphasis being placed on said item? Are they yielding positive results? Are there any potential negative consequences in advancing this? Consistent evaluation of your position in consideration of all the facts and circumstances should promote the best use of these tools and hopefully mitigate any unintended consequences.
Thelson Desamour was called to the bar in 2006. He is claims legal counsel for Fenchurch General Insurance Company. He has been a member of the Lakeridge Health Board of Trustees since 2015 and is a former board member/director of professional development for the Canadian Association of Black Lawyers (CABL).
The opinions expressed are those of the author and do not reflect the views of the author’s firm, its clients, The Lawyer’s Daily, LexisNexis Canada, or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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