While punitive claims are reserved for the most exceptional of cases, the fact that a jury in an Ontario Superior Court awarded Sara Baker $1.5 Million in punitive damages against Blue Cross Life Insurance is a very big deal. This is particularly in light of the jury’s award of $40,000 in aggravated damages for the mental stress suffered by Ms. Baker with respect to the continued denial of her LTD claim and the delays by the insurer in moving her case forward.
Punitive damages claims are awarded when a plaintiff proves that an insurer, in adjusting her claim, acted in a high-handed or malicious manner. This is not an easy feat to undertake, but it paid off for Sara Baker as it was more than warranted in her case.
Background
In 2013, Ms. Baker suffered a brain bleed and a stroke at the young age of 47. At the time, she was working as a director at a hospital where she had been employed since 2002, paying long-term disability payments to Blue Cross.
Ms. Baker’s LTD claim was later denied in 2016 as she was deemed by Blue Cross to no longer meet the criteria for “total disability” under its policy. Blue Cross’ decision was premised on the fact that she was capable of working in alternate occupations, which would have paid her nearly half of her pre-disability income. The decision was also made despite Ms. Baker’s treating doctors recommending that she remain off work indefinitely due to the symptoms of her disability (headaches, cognitive impairment, and fatigue).
Ms. Baker issued a claim in 2017 which was to proceed with a jury trial. Following the COVID pandemic, she sought to change the method of trial to judge alone in the hopes of moving her claim forward, given the temporary suspension of jury trials. However, Blue Cross opposed the judge alone request on the basis that it had voluminous surveillance on her that supported its strategy. Ultimately, it was found at trial that none of the surveillance contradicted Ms. Baker’s symptoms of disability.
Outcome of Trial
After a 5-week jury trial in May of 2022, Ms. Baker received the decision she was entitled to. Not only was she awarded more than $220,000 for past LTD benefits owed to her, but the award of $1.5 Million in punitive damages against Blue Cross will go down as the highest award in long-term disability claims in Canadian history.
Previously, the highest punitive damage claim was awarded in Whiten v. Pilot Insurance [2002] 1 SCR 595, wherein the Supreme Court of Canada reinstated a jury award of $1 Million reduced to $100,000 on appeal. This case, while involving a dispute with an insurance company, dealt with the denial of coverage in a house fire claim where the insurer had alleged that the plaintiff had set the fire on purpose in light of evidence to the contrary by the fire chief and experts hired by the insurer.
Takeaway
Dealing with insurance companies when suffering from a serious disability is overwhelming. However, where it is warranted, claims for punitive damages should be considered to remind insurers of their duty to act in good faith when adjusting such claims. It is also a stark reminder that insurers should avoid in engaging in similar behaviour with other claimants going forward.
Contact MA Disability Lawyers
At MA Disability Lawyers, we will review each case individually and thoroughly to determine whether such is claim is warranted. We know the process of appealing a denial is daunting, but we are well-versed in dealing with insurance companies. We know the process and the insurer’s language, so to speak. Please contact us for a free consultation. We’re here to help.
