Punitive damages have been levied against yet another long-term disability insurance business. This time, a Toronto jury determined that Blue Cross’s actions deserved a startling 1.5 million dollar judgement, in addition to the payment of past LTD benefits owed that Blue Cross had refused to pay.

Concerning the Case
Baker v. Blue Cross Life Insurance Company of Canada is the case.

Sara Baker, the plaintiff, had a stroke in 2013. Blue Cross first honoured its responsibility to pay long-term disability benefits but then refused the claim after determining that Ms. Baker could work in a profession that paid at least 60% of her pre-disability earnings. Ms. Baker’s therapy providers, on the other hand, believed she could not return to work.

To pursue legal proceedings, the plaintiff hired a long-term disability attorney. A complaint was filed seeking reimbursement of past benefits, as well as punitive and aggravated damages. The matter went on for years, partly because Blue Cross insisted on a jury trial. The COVID-19 pandemic caused court delays, particularly for jury trials.

It is unusual for a long-term disability insurer to insist on a jury trial. A judge decides on the majority of cases. A long-term disability claim going to trial is also unusual. The great majority, more than 97%, reach an out-of-court settlement.

Blue Cross put up a strong fight in this case. It performed 375 hours of surveillance in order to undermine Ms. Baker’s credibility in front of the jury. While background checks and a few days of surveillance are quite standard for insurers, the degree of surveillance performed here is nearly unheard of.

Given the outcome of the trial, the insurer’s approach of needing a jury and performing so much monitoring looks to have backfired. Given the scale of the punitive damages award, it was clear that the jury was not impressed with Blue Cross.

Blue Cross has suggested that it will file an appeal. It remains to be seen whether the Ontario Court of Appeal reduces the punitive damages amount or otherwise interferes with the jury verdict.

What Exactly Are Punitive Damages?

Punitive damages are paid to penalise a defendant for especially egregious behaviour. Punitive damages are intended to punish and deter rather than recompense. Punitive damages are uncommon rather than the rule in Canada. Punitive damages are only used in exceptional circumstances to address punishment, deterrence, and denunciation.

Long-Term Disability Lawsuit Punitive Damages

Long-term disability benefit lawsuits typically seek reimbursement of prior benefits owed, a declaration that benefits be reinstated, and extracontractual damages for the manner in which the claim was refused and the impact of the decision on the individual. Extracontractual claims are typically structured as punitive, aggravated, or general damages. Although extracontractual damages verdicts at trial are uncommon, they should be pursued when there is proof of the insurer’s bad faith.

Punitive damages have been levied against yet another long-term disability insurance business. This time, a Toronto jury determined that Blue Cross’s actions deserved a startling 1.5 million dollar judgement, in addition to the payment of past LTD benefits owed that Blue Cross had refused to pay.

Concerning the Case

Baker v. Blue Cross Life Insurance Company of Canada is the case.

Sara Baker, the plaintiff, had a stroke in 2013. Blue Cross first honoured its responsibility to pay long-term disability benefits but then refused the claim after determining that Ms. Baker could work in a profession that paid at least 60% of her pre-disability earnings. Ms. Baker’s therapy providers, on the other hand, believed she could not return to work.

To pursue legal proceedings, the plaintiff hired a long-term disability attorney. A complaint was filed seeking reimbursement of past benefits, as well as punitive and aggravated damages. The matter went on for years, partly because Blue Cross insisted on a jury trial. The COVID-19 pandemic caused court delays, particularly for jury trials.

It is unusual for a long-term disability insurer to insist on a jury trial. A judge decides on the majority of cases. A long-term disability claim going to trial is also unusual. The great majority, more than 97%, reach an out-of-court settlement.

Blue Cross put up a strong fight in this case. It performed 375 hours of surveillance in order to undermine Ms. Baker’s credibility in front of the jury. While background checks and a few days of surveillance are quite standard for insurers, the degree of surveillance performed here is nearly unheard of.

Given the outcome of the trial, the insurer’s approach of needing a jury and performing so much monitoring looks to have backfired. Given the scale of the punitive damages award, it was clear that the jury was not impressed with Blue Cross.

Blue Cross has suggested that it will file an appeal. It remains to be seen whether the Ontario Court of Appeal reduces the punitive damages amount or otherwise interferes with the jury verdict.

What Exactly Are Punitive Damages?

Punitive damages are paid to penalise a defendant for especially egregious behaviour. Punitive damages are intended to punish and deter rather than recompense. Punitive damages are uncommon rather than the rule in Canada. Punitive damages are only used in exceptional circumstances to address punishment, deterrence, and denunciation.

Long-Term Disability Lawsuit Punitive Damages
Long-term disability benefit lawsuits typically seek reimbursement of prior benefits owed, a declaration that benefits be reinstated, and extracontractual damages for the manner in which the claim was refused and the impact of the decision on the individual. Extracontractual claims are typically structured as punitive, aggravated, or general damages. Although extracontractual damages verdicts at trial are uncommon, they should be pursued when there is proof of the insurer’s bad faith.

Because the Baker v. Blue Cross case was resolved by a jury, there are no written reasons from a court to explain why the award was made. If Blue Cross files an appeal, the Ontario Court of Appeal may issue written reasons describing part of the evidence concerning punitive damages.

One can only presume that the jury was unimpressed with Blue Cross’ behaviour throughout the claim, denial, and potential trial. It’s also likely that the jury decided it was unfair to undertake 375 hours of covert monitoring, effectively eavesdropping, with no evidence of wrongdoing on the plaintiff’s part.

What Impact Will This Case Have on Other Claims?

It is impossible to predict whether Blue Cross or other insurers will change their behaviour to avoid a repeat of this outcome. However, insurance firms may be more careful when determining which claims to bring to trial. In addition, LTD insurers may be less willing to devote as much time and effort to surveillance. Insurers are likewise likely to shun jury trials in favour of judge-only proceedings.

Long-term Newmarket disability lawyers will use this case to pursue punitive damages. Despite the fact that LTD claims seldom go to trial, insurers must now carefully assess the danger of a seven-figure punitive damages award, which might give plaintiffs additional bargaining power when negotiating a settlement.