In a recent case decided at the Supreme Court of British Columbia, Greig v. Desjardins, 2019, BCSC 1758, the court decided whether disability insurance companies should be held accountable when they take unreasonable positions that are contrary to their obligations of good faith, and result in financial and emotional disaster for plaintiffs.
The Greig case is especially interesting because its primary focus was not on entitlement, per se, but rather, on whether aggravated and punitive damages should be payable when the defendant insurance company is found liable for breach of duty of good faith. Based on the facts of this case, the court awarded $50,000 for aggravated damages and $200,000 for punitive damages.
The Plaintiff worked in a unionized environment so their claim for actual disability benefits was governed by a procedure set out in the Collective Bargaining Agreement. Notwithstanding the objections of Desjardins, the Trial Judge found that she was entitled to consider whether damages for failing to meet obligations of good faith could be litigated. After a highly technical analysis, Mdm. Justice Young determined she could assess whether damages under these headaches should be payable.
Arguments of Plaintiff
The Plaintiff argued that the defendant acted in bad faith because:
- the insurance company failed to acknowledge or investigate psychological or emotional aspects of the Plaintiff’s injury despite overwhelming evidence,
- that it required objective proof of physical injury contrary to the policy,
- that it acted on an unfounded belief that the Plaintiff was motivated by desire for secondary gain,
- that it wrongfully alleged the Plaintiff did not pursue optimal treatment,
- that it failed to take basic required steps to adjudicate the claim properly
The Trial Judge found all of these complaints were substantiated.
In this case, the Plaintiff was in a motor vehicle accident in 2011 and reinjured his arm at work in 2014. The Plaintiff made efforts to rehabilitate and return to work, but he was not successful. His family doctor did not support the Graduated Return to Work proposals being made by the insurance company. Rather than work with the Plaintiff, the insurance adjuster treated the Plaintiff like a child and failed to consider his concerns.
Arguments of Defendant
Insurance company complained that the Plaintiff was not being active enough with respect to medical treatment and ignored the fact that he indicated he lacked the financial resources to even drive to see his family doctor who was located 70 km away from his house. The Plaintiff told his adjuster that the LTD payments were insufficient to even cover his mortgage payments and they had no money left over for treatments, but she failed to listen. Even when the medical reports made references to growing psychological and psychiatric challenges, she failed to take those under consideration. The insurance adjuster decided that a reasonable claimant should be see his doctor every month or two and she held the Plaintiff to that standard even though she did not communicate it to him.
After the termination letter was sent, the correspondence sent to Desjardin, by legal counsel, was ignored. Additional evidence was never considered. In the meantime, the Plaintiff and his family lost everything, including their home.
The trial judge was critical of the fashion in which the insurance adjusters had conducted themselves with respect to Mr. Greig. She found that the positions taken by the defendant were improper, not supported by the policy, contrary to the facts, and failed to meet the obligation of good faith handling of the file. She carefully considered the fact that this was a “peace of mind” contract and that the wrongful termination of benefits was unreasonable and had caused great harm and humiliation to the Plaintiff. She therefore awarded $50,000 for aggravated damages for the Plaintiff’s mental distress and an additional $200,000 due to the high-handed, arbitrary, and blameworthy conduct of the agents for the defendant.