Court orders insurer to produce internal documents.

On April 29, 2019 the Nova Scotia Supreme Court ordered an insurance company to produce its policies, procedures, guidelines and internal documents concerning how an accident benefits claim was handled in a bad faith action.

In Malloy v. Intact Insurance Co., [2019] N.S.J. No. 170, 2019 NSSC 131, Shauna Malloy was injured in a motor vehicle accident. Ms. Malloy’s insurer, Intact, accepted the claim for accident benefits, but denied reimbursement for a medical procedure. Ms. Malloy sued alleging bad faith and sought an order that Intact produce its policies, procedures, guidelines, internal documents and other documents concerning how Intact handled and resolved accident benefit claims. Intact argued that the materials sought were irrelevant because there were no allegations concerning Intact’s policies and procedures.

The Court agreed that there would be no basis to order disclosure if the pleadings contained only a boiler plate allegation of bad faith with no specifics. However, the allegations in this case were not simple or boiler plate. Among other things, Ms. Malloy alleged that Intact denied her claim in an arbitrary manner without consideration of all medical evidence, allowed a lay person to interpret medical evidence while adjudicating her claim and ignored reports from Ms. Malloy’s physicians that demonstrated an entitlement to benefits under the policy.

While there was no specific reference to policies and procedures, the Court held that evidence that Ms. Malloy’s claim was not reviewed and assessed in compliance with Intact’s own policies and procedures would be relevant to determining if Intact had acted in bad faith. Intact was ordered to produce the documents sought.