My most memorable case of 2016.

The past year has seen many interesting and surprising cases land on my desk. But my most memorable case involved a woman I’ll call April.

April had been employed by a financial institution for a number of years when she developed cancer that forced her to stop work in May 2001. She applied for long-term disability benefits under her employer’s group insurance policy. Her claim was approved and benefits were paid starting in November 2001.

Although the cancer treatment went well, April developed a number of mental illnesses including major depression, a generalized anxiety disorder and phobias about leaving her home. She was under appropriate care for all conditions, and dutifully reported everything to the insurance company.

The insurance company carefully monitored April’s condition, and determined that she was disabled from “any occupation” as of November 2003. They continued to monitor her claim carefully, and in 2005 sent her for a full psychiatric assessment by one of their own experts. The insurance company’s expert confirmed that April was seriously ill and totally disabled from working.

Over the next 10 years the insurance company continued to monitor April’s claim, regularly collecting and reviewing her medical records, conducting telephone interviews and consulting their own experts. The result was always the same: April is not able to work.

During this time April applied for CPP Disability Benefits, which were approved on the basis that April suffered from a “severe and prolonged” disability. The insurance company then reduced April’s benefits by the amount she received from the CPP.

In April 2015, April was subjected to another complete psychiatric assessment by one of the insurance company’s other experts. In a report that month the other expert advised the insurance company that April’s condition had not changed or improved over the past 10 years, that she was “completely limited and restricted from returning to work” (his exact words), and there was no reason to question April’s credibility (that is, he believed her).

Not content, the insurance company then sent portions of April’s file to another psychiatrist, one who had never met her or even spoken with April on the phone. In his report, that expert said that April “might” be able to work from a “home-based business.”

The insurance company latched onto that “might”, and in a letter in early November 2015, told her that:

As a results (sic) of our review of your file in its entirety, we find that the primary psychiatric symptoms described relates (sic) to anxiety when in public and therefore, we find that there so (sic) not appear to be any limitations that would preclude you from working in a home based environment. …

As discussed, we would like to offer you the opportunity to work with a rehabilitation consultant to provide support in the form of job search and resume preparation skills.

Trusting her insurance company, April told them that she would participate in the offered rehabilitation program. The “rehabilitation program” consisted of a single letter to April, which provided her a list of 6 job search websites and the contact information for the local branch of the YWCA (where she could get some resume preparation help).

In mid-December 2015, the insurance company sent April a letter terminating her long-term disability benefits, effective December 31, 2015.

Completely frantic, April retained me. I commenced a lawsuit within days. About three weeks later I received a phone call from the insurance company’s in-house lawyer who left me a voicemail message. In that message he admitted that terminating April’s long-term disability benefits was a mistake, and went on to say that since they would put her back on claim right away there was “no harm” and we should abandon the lawsuit.

This left April with a difficult choice: to go back on claim with an insurance company she no longer trusted, or terminate the relationship. She chose the latter.

I wrote to the insurance company in early 2016 and offered them a choice. They could either pay out the full value remaining on April’s claim plus a reasonable amount to cover all of her expenses and legal fees, or go to trial.

The insurance company refused both options and unilaterally re-instated April’s benefits. April was horrified; she had no trust in the insurer and didn’t want to be in a relationship with them again. She also told me that had she not retained me she might have simply accepted the insurance company’s termination. She was afraid that other vulnerable people might fall victim to similar tactics if the insurance company was not taken to task. She instructed me to push forward with a “bad faith” lawsuit against the insurance company.

I set up an examination for discovery of the person who terminated April’s claim, and had a major fight with the insurance company about getting her training records. It turned out that the decision maker had a business and collections background, and was likely unqualified to handle such a complex claim.

I set the action for a jury trial.

Finally the insurance company came to me and offered to buy out April’s claim, but at a significant reduction on the basis that she may die or get better before age 65 (when her policy benefits would end). April decided to try, one last time, to get the insurance company to settle her claim. I wrote another letter, in which I said, in part:

In opening to the jury I will highlight the fact that there is no issue as to what the insurer did, the question is: why?

Why, in the face of 15 years of medical records supporting total disability, did the insurer cut her off?

Why, in the face of the CPP independently finding her disabled, did the insurer cut her off?

Why, in the face of its own expert supporting total disability, did the insurer cut her off?

Why was it so easy for the insurer to reverse the termination, without additional medical evidence, just weeks after it cut her off?

In my closing I will educate the jury about the purposes of punitive damages: not just to denounce and punish, but to deter – specifically and generally. I will ask the jury to consider how high a punitive damages award must be to change the behavior of a corporation with net annual profits of several billion dollars.

Additionally, I will ask the trial judge to charge the jury on the law as set out in Asselstine v. Manulife and UBC, 2003 BCSC 1119 (affirmed on this issue at 2005 BCCA 292), where the Court noted that:

A duty of good faith and fair dealing requires an even-handed evaluation of all evidence before the insurer by the insurer. Just as one cannot cherry-pick the information to send to an assessor for a rehabilitation opinion, one cannot choose only to accept certain medical evidence in the face of compelling, conflicting evidence.

One hour after I sent my letter the insurance company accepted April’s offer and settled her claim.