Appeal Court upholds $1.5 million punitive damages against LTD insurer.
In Baker v. Blue Cross Life Insurance Co. of Canada, [2023] O.J. No. 5748, 2023 ONCA 842, the Ontario Court of Appeal (“OCA”) upheld a $1.5 punitive damages award against a disability insurer, finding that it was warranted in the face of what appeared to be a systemic approach by the insurer’s claims handling team to ignore the insured’s rights under the policy. However, the court found that the trial judge erred in creating a new category of cases where full indemnity costs will automatically follow (although they were allowed on the facts of this case). The insured suffered a...
read moreInsurer punished for improperly withholding payment.
On May 3, 2022, the BC Supreme Court ordered that a homeowner’s insurer pay PUNITIVE DAMAGES for withholding payment of the undisputed parts of a fire loss claim. In Green Estate v. Sonnet Insurance Co., 2022 BCSC 709, an executor brought an application against the estate’s insurance company for breach of statutory condition 12 and breach of the implied duty of good faith in failing to indemnify the estate for losses arising out of a house fire. Statutory condition 12 requires the insurer to pay or reject a claim 60 days after proof of loss. The insurer initially agreed to pay the...
read moreAppeal Court rules that not all bad faith attracts punitive damages.
On November 3, 2020, the BC Court of Appeal held that not all bad faith conduct will result in an award of punitive damages. In Gascoigne v. Desjardins Financial Security Life Assurance Co. (c.o.b. Desjardins Insurance), [2020] B.C.J. No. 1821, 2020 BCCA 316, the insured, an ICBC bodily injury adjuster, sued her disability insurer under her group benefits policy when her claim for long term disability benefits was denied. She developed inflammation of the tendons of her left elbow, requiring surgery, and subsequently developed depression. At trial, the medical evidence established that she...
read moreLTD Plan Administrator punished directly for bad faith claims handling.
On October 15, 2019, the BC Supreme Court ordered that an administrator of a long-term disability plan pay damages for mental distress, and punitive damages for its bad faith handling of a disability claim covered by a collective agreement. In Greig v. Desjardins Financial Security Life Assurance Co., 2019 BCSC 1758, Dennis Greig, who had suffered injuries in a motor vehicle accident, was re-injured on the job and was unable to return to work. He successfully applied for LTD benefits but his benefits were later suspended for 17 months before being re-instated. When Mr. Greig’s benefits were...
read moreInsurer must disclose internal documents in bad faith claim.
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 insurance company, 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,...
read moreInsurer may be sued for bad faith negotiations.
On May 17, 2018, the Manitoba Court of Appeal dismissed an appeal from an insurance company’s unsuccessful application for summary judgment to dismiss a claim brought by its insured. In 3746292 Manitoba Ltd. v. Intact Insurance Co., 2018 MBCA 59, the insured was the owner of a mixed-use property in downtown Winnipeg consisting of residential apartments and commercial space. In 2010, an accidental fire caused significant damage. A dispute arose over the cost of repairs and the amount of a co-insurance penalty. The parties negotiated a settlement, and the insured...
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