You’ve hired a long term disability lawyer after your insurance company has denied your long term disability claim. This post reviews the stages of long term disability lawsuits and trials. While the vast majority of long term disability lawsuits will not go to trial, the process can be intimidating. This blog post describes what you can expect in long term disability litigation in Canada and when you might want to consider serving a jury notice.

The Steps in Disputing a Long Term Disability Denial

Internal Appeals

When an insurance company denies or terminates a claim for long term disability benefits, the insurance provider may offer a right to appeal its decision. The right to appeal will be set out in the denial letter along with a request for new information related to the medical condition.

An internal appeal is attractive because you can do it without incurring any legal costs. The problem with the internal appeal is that the person considering the decision is often the case manager who made the claim denial. The denial letter will often indicate that in order for you to submit an appeal you should send any new medical assessments and information. Usually, there is no new information to submit .

Most disability lawyers recommend skipping the appeal and proceeding with a law suit. The basis for the appeal is simply that the insurance company wrongfully denied the claim. If the insurer simply reverses its decision to deny the claim, you will be paid past disability benefits and begin receiving your benefits again. However, if you have no new information, a lawsuit may be the better route to take. It is important to find out if your policy requires you to appeal the decision before starting a lawsuit.

Statement of Claim – Starting the Lawsuit

In Ontario, you have up to two years from the date the cause of action was discovered to file a lawsuit. If you do not start a lawsuit by issuing Statement of Claim with the court, you will be prevented from doing so by the Limitations Act, 2002, SO. 2002, c. 24, Sched. B. The other Canadian provinces have their own legislation which provides the limitation period to commence a lawsuit.

It is essential that you hire a lawyer who is experienced in handling long term disability benefits well before the limitation period is approaching. Even if the insurance provider considers an appeal, it will rely on the original decision date for the purposes of the limitation period in order to argue that you are out of time.

Statement of Defence

The insurance company will hire a lawyer to file a Statement of Defence. Many insurance companies will assign an in house disability lawyer to represent the company.

Discovery

The parties are entitled to discovery. Documentary discovery occurs first with the lawyers exchanging information. The insurance company will provide a copy of the long term disability claim file and your lawyer will gather your medical information.

After documentary discovery has happened, the parties are entitled to have oral examinations. Many long term disability claims are settled without the need for a discovery.

Mediation

Most long term disability cases will proceed to mediation either before or after oral discovery has occurred. This process involves hiring a neutral third party mediator to assist the parties and their lawyers in exploring whether the claim can be settled.

Experience with long term disability cases is essential to build the case and obtain maximum compensation for you. Long term disability claims can also be admitted or reinstated on a monthly basis as a result of a mediation although that result is relatively rare.

Pretrial

If the case does not settle at the mediation, the next step is setting the case down for trial. The court will appoint a pretrial judge who will see if the case is ready for trial. The pretrial judge will also see if the parties can settle the file.

Trial

It is rare for a long term disability lawsuit to go to trial. Lawsuits are risky and costly. It is important to hire a lawyer who has experience with long term disability cases.

What Are the Potential Outcomes of Filing a Long Term Disability Lawsuit?

A long term disability lawsuit can be resolved by settlement or trial. A successful result for the plaintiff in a long term disability trial is a declaration of disability and an order for past benefits. There can be no order for future benefits on a lump sum basis at trial. The declaration of disability means that the insurance company will start paying benefits on a monthly basis after the trial.

Most long term disability lawsuits are settled on a lump sum basis as a compromise amount considering the value of the benefits. They can also be settled for the payment of monthly benefits. For a detailed discussion of long term disability settlements, you can refer to our blog What is a win in an LTD case?.

When Might a Jury Trial Be Right for a Long Term Disability Case?

Jury Trials – The Risks and Some Context

Jury trials are generally more expensive and longer than trials heard by a judge. Jurors have little or no legal knowledge or training because judges, justices of the peace, lawyers and articling students are not eligible to sit as jurors. The jury assesses evidence and makes key decisions such as the liability of the parties and the value of the injured person’s losses without relying on legal precedent or training.

In a jury trial involving a personal injury, the parties are the injured person as plaintiff and the defendant person who caused the injury. The jury cannot be told that the damage award will usually be paid by the defendant’s insurer. The defence lawyer is paid by the driver’s insurance company, but the jury does not know this.

The rationale behind keeping the jury in the dark about the insurance company’s involvement is that juries will favour the plaintiff if they believe an insurance company with deep pockets will pay the award. If they think the person who caused the damage has to pay, they will feel badly for the negligent defendant.

The trial will appear to be a fight waged between two individuals, but everyone involved in the trial except the jury is aware that the fight is between an individual and an insurance company. The negligent defendant is at relatively low personal financial risk in the law suit due to the insurance.

In personal injury cases, insurers routinely choose to have a trial by jury. Their lawyers must feel that juries are inclined to find in favour of the defendant where the defendant is an individual.

Long Term Disability Actions and Juries – Some History

Long term disability (“LTD”) cases are different than personal injury cases because the defendant is the insurer. There is no mystery or secret about the real parties to an LTD lawsuit. The insured is suing their own insurance company to enforce their right to benefits in their insurance policy.

In personal injury matters, insurers prefer juries because plaintiffs sue individual defendants. Is the opposite true when a person sues their own insurer? A jury might be more inclined to find for an insured plaintiff in an LTD case. The jurors may personally relate to some element of the plaintiff’s situation. The jurors may have their own coverage – perhaps with that same insurer defendant – and may feel aggrieved for the plaintiff.

Life and disability insurers do not usually serve jury notices. When faced with a jury notice, LTD insurers used to apply to the court to strike out the jury notice in cases. They argued that a claim under an LTD policy was for declaratory relief. The plaintiff is seeking a declaration of disability. Actions seeking declaratory relief were not permitted to be tried by a jury under section 108 of the Courts of Justice Act. In the 1990s, Ontario courts agreed with this reasoning. Then, in the early 2000s, an Ontario judge comprehensively dealt with the argument, finding that the declaration of disability was a factual declaration which could be dealt with by a jury.

The fact that LTD insurers objected to juries may suggest that a plaintiff should want their LTD matter tried by a jury. However, the concerns involved in choosing to have a matter tried by a jury remain – they are costly, longer and it is risky to have people with no legal training determine a lawsuit. Simply put, juries are unpredictable which increases risk. Given that very few LTD matters go to trial, the potential benefit of a serving a jury notice may be entirely theoretical.

When Might a Plaintiff Choose a Jury for a Long Term Disability Trial?

Every person who has been denied LTD benefits is without income at a dreadful time in their life. They have become too sick to work and expected part of their income to be paid by their LTD insurer. Each client sees their own circumstances as compelling, their illness clear and  they  believe any reasonable person would conclude that they are disabled. The crisis they face is real and heartbreaking, and they cannot compare their case to anyone else.

Plaintiff #1 – Hilda – the housekeeper…

Hilda came alone to Canada as a refugee after a civil war in her home country. Hilda has taken courses and tried to learn English. Despite her best efforts, she continues to speak very little English. She has worked as a cleaner in office buildings for 25 years and drives her bicycle to and from work in good weather. Hilda has never been off work for illness and has an excellent work history. She is an engaged member of her community, was a valued employee for her work ethic and volunteered for local charities. She has no family. Her income is low but she lives  within her means.

Hilda fell off her bike on her way home from work and broke both of her wrists. She has never been able to use her hands in a meaningful way since the accident and has gone on to develop chronic pain and depression in addition to her physical limitations. The insurer pays her for two years. They terminate her claim at definition change, saying she can do another job, working for minimum wage. Hilda has been approved for CPP-D, has had to sell her house and is living in a rooming house. Her friends and neighbours are shocked by the changes in her. Hilda’s case might appeal to a jury.

Plaintiff #2 – Terry – the 911 operator….

Terry has been a 911 operator for years. He coped with the stress of his job by keeping to a regular routine of exercise and meditation. He has developed post traumatic stress disorder after a particularly bad series of calls. Terry’s PTSD has been treated and he has done everything recommended to him. The only thing that helps Terry cope with life is using marijuana to sleep, avoiding stressful situations, regularly exercising and meditating.

No medication has worked for Terry – several medications have made him suicidal and he has been hospitalized for periods as a result. The insurer pays Terry for a period and terminates his claim based on an in-house medical opinion that Terry should be on medication and not use marijuana. Terry’s psychiatrist, counsellor and family physician are all unequivocally supportive of Terry and have concluded after years of treatment that medication is not helpful. They support his claim. Terry’s case might appeal to a jury.

Other claims:

While this article refers to long term disability matters, the comments on jury trials apply equally to life insurance, long term care claims, critical illness matters and travel insurance. In any of these cases, an individual is suing their own insurer.

Plaintiff #3 – Evelyn – the widow and beneficiary …

Evelyn and Paul have been married for 30 years. They have had life insurance since the beginning of their marriage. Shortly after Paul turns 60, his company closes and he loses the job he loves. Paul had intended to work until his late 60s. He was in great health, he had great coworkers and enjoyed going to work every day. Until he lost his job, Paul seemed to live a charmed life.

Since they have paid off their mortgage and have no debt, Paul and Evelyn want to reduce the cost of their life insurance. They are sold a new life insurance policy by their agent. After looking for work and having no luck, Paul develops a habit of taking sleeping pills and drinking heavily every night to sleep. Paul dies of an accidental overdose one night. The insurer denies his claim on the basis that he has died from suicide within the first two years that the policy has been effective. Evelyn’s case might appeal to a jury.

Conclusion

Long term disability lawsuits and trials are what we do. Jury trials are risky and expensive. Most of the time a jury notice is not appropriate in an LTD, life insurance or critical illness insurance even if the plaintiff’s circumstances are compelling and sympathetic. We have the experience necessary to carefully consider your case and advise you appropriately. If your case is an appropriate one for a jury in Ontario, Burn Tucker Lachaîne PC has years of experience trying cases before juries.

For advice please text 613-777-0992 or call 613-233-6898  to schedule a meeting with one of our lawyers.  We provide free consultations, in French or English, to ensure that your rights are protected.   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.

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