When you hire a lawyer to help you pursue your long term disability (“LTD”) benefits, you often hear the phrase “you only pay if we win your case”. Traditionally, a “win” is a successful decision by a judge after a trial. However, a positive result in an LTD case (a “win”) is usually a negotiated settlement. Very few LTD matters proceed to trial because of the risk, time, cost and stress involved in proceeding to trial. The best way to obtain a reasonable settlement is through proper preparation of your case as though it will proceed to trial.

What can happen at a trial:

A win at trial is….

While very few cases will proceed to trial, any settlement which your lawyer negotiates should be measured against the result you could obtain at trial. LTD cases are different than personal injury actions because they are based on the LTD contract and not in damages for pain and suffering or compensation for all of your income loss. LTD policies provide that if the insured person satisfies the definition of disability found in the contract, they will be paid the LTD benefit set out in the policy. The LTD benefit is intended to replace some but never all of the disabled person’s income loss. It only payable after a waiting period in a monthly basis.

An insurer will only pay benefits if the insured person continues to be disabled, has not reached the expiry period/date set out in the policy and is still alive. This means that a win at trial will result in a declaration that the insured person has been disabled up to the date of the trial, an order that the insurer owes all past disability benefits (known as arrears) and the court will make a finding on costs. It is rare for a successful party to receive an award compensating them for all of their legal costs.

A win at trial is not…..

A win at trial is not a guarantee that the insurer will keep paying you for any period into the future. Winning your case not an end to the relationship with the insurer and will mean that you need to continue to prove your disability and that you are in appropriate treatment as required by the policy. The insurance company will still have a right to assess you or send you for medical assessments.

A loss at trial…

In order to win your LTD case, you must prove that you have been disabled on a continuous basis until the trial date. The court will find that you have proved your case or that you have not proved disability. If you fail to prove disability, you will receive nothing from the insurer.

How do most LTD lawsuits end?

Most LTD cases conclude with a negotiated settlement. To reach a settlement, both parties must compromise their position. In an LTD case, the insurer takes the position that no benefits are payable, and the insured person is taking the position that the ongoing monthly benefits are payable.  During a lawsuit, the insurer may admit the LTD claim and pay monthly benefits. If the lawsuit results from a terminated disability claim (such as a definition change termination), the insurer may agree to reinstate LTD benefits. Settlements which result in admission/reinstatement of the LTD claim are rare as the insurer must accept that the LTD claim is payable, and this is not a compromised position. Admission of the claim or reinstatement is the result you would obtain after winning a trial.

The majority of LTD cases end with a lump sum settlement. This is the “win” lawyers refer to when they state “you only pay if we win your case”. A lump sum settlement is paid by the insurer to end the lawsuit. The settlement figure will be calculated based on the disability benefit amount set out in the contract, the past benefits payable to you at the time of settlement and, in many cases, some amount for future disability benefits. A settlement amount will depend on the diagnosis, medical treatment, impact of your condition on your ability to function and work and the medical prognosis for your recovery. You will need to sign settlement documents which outline the terms of the settlement.

When will a settlement occur?

Your lawyer will assess the possibility for settlement at various stages of the litigation. Common times to review the potential for settlement will be after your medical evidence has been provided to the insurance company’s lawyer, before or after the examination for discovery or at a mediation.

If your lawyer cannot achieve a settlement at any of these interim steps in the litigation, they must set your action down for trial. By setting the action down for trial, the party is telling the court that it is ready to proceed with a trial. The next step will be pretrial and, if a settlement does not occur at pretrial, we will prepare to proceed to trial. Very few cases will proceed to trial and there are opportunities to settle at pretrial and any time up to the trial.

“You only pay if we win your case” means….

In most cases, we can offer to represent you on a contingency fee basis.  This means that you do not pay legal fees unless you win or achieve a settlement on your case. For advice please text 613-777-0992 or contact us through our website to schedule a meeting with one of our lawyers.  We provide a free consultation, in French or English, to ensure that your rights are protected.