[CO-CURE] Supreme Court of Canada, Landmark Decision Affecting Long-term Disabil

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Supreme Court of Canada to Make Landmark Decision Affecting Long-term

Disability Insurance Claims

Decision to be rendered June 30th, 2006

For up-to-date information, visit FM-CFS Canada at:

http://fm-cfs.ca/Fidler.html

Summary, as per the Supreme Court of Canada web site:

" The Respondent was a Royal Bank employee and was covered by a group

insurance policy underwritten by the Appellant insurer. In June 1990, at 36

years of age and while still a full-time employee of the bank, she became

ill with an acute kidney infection known as pyelonephritis. She developed

chronic fatigue syndrome and fibromyalgia a short time later, in 1991.

Although the direct effects of the kidney infection were resolved relatively

quickly, the chronic fatigue syndrome and fibromyalgia persisted.

At the time the Respondent became ill, the bank's employees were covered by

a group insurance policy with the Appellant which included a long-term

disability insurance benefit provision. Under that provision, a " Totally

Disabled " employee was eligible to receive long-term disability benefits

after a six month elimination period. An employee was eligible to receive

benefits until their 65th birthday or normal retirement age, provided that

they continue to be " Totally Disabled " . The policy did not include any

provision as to who bore the onus of establishing that an employee meets the

definition of " Totally Disabled " , nor did it state whether this

determination was to be made according the medical or non-medical evidence,

or some combination of the two. Nor did it provide any procedure for

termination of benefits once payments had commenced.

The Appellant paid disability benefits until May 1997, then ceased payments

on the grounds that the Respondent was no longer disabled. During the time

the Appellant paid benefits to the Respondent, she received medical care

from a number of physicians which consistently confirmed her total

disability. In August and September 1996, the Appellant retained Tower

Investigative Group to conduct video surveillance of the Respondent. The

investigators produced a video that depicted the Respondent carrying out

what the trial judge described as " errands or personal business activities. "

An internal memo stated that the video disclosed that the Respondent was

active for 5 full days. Benefits were discontinued thereafter.

Further to her efforts to appeal the discontinuance, requests for a copy of

the surveillance tapes and a letter in which she stated never having claimed

" to be unable to walk, shop or bend " , the Respondent sued for unpaid

benefits and aggravated and punitive damages. One week before trial and

further to examinations for discovery, the Appellant paid the benefits owed

and offered to reinstate the Respondent's long-term benefits. The only

remaining issue was whether the Respondent was entitled to punitive and

aggravated damages. The trial judge held that she was entitled to aggravated

damages but not punitive damages. Both parties appealed to the Court of

Appeal. The Appellant's appeal from the trial judge's award of aggravated

damages was dismissed and the Respondent's cross-appeal from the trial

judge's refusal to award punitive damages was allowed. "

FM-CFS Canada thanks the lawyers who volunteered to defend the case, Faith

Hayman and ph J. Arvay, Q.C.

http://www.haymanlaw.com/

http://www.arvayfinlay.com