The Ontario Court of Appeal has upheld a $1.5 million punitive damages award, the largest in a Long-Term Disability (LTD) claim in Canada, according to law firm Thomson Rogers.
The ruling in Baker vs. Blue Cross Life Insurance Company of Canada reinforces the jury’s original verdict from a Toronto court, it said.
The case revolves around Sara Baker, who suffered a brain bleed/stroke in 2013. Despite medical advice to the contrary, Blue Cross Life Insurance Company of Canada denied her LTD benefits, asserting she could resume work in an alternative role that paid at least 60% of her pre-disability earnings. The trial concluded with a significant punitive damages award, reflecting the insurer’s misconduct in handling Baker’s LTD claim, it said.
Stephen Birman, a lawyer from Thomson Rogers, represented Baker alongside Robert M. Ben and Lucy Jackson. Birman commented on the court’s decision, emphasizing its impact on enforcing accountability in insurance companies.
“It sends a clear message that misconduct by an insurance company will not be tolerated,” he stated.
Baker expressed relief and gratitude following the ruling. “I’m just grateful this is behind me now,” she said, “and that the court recognized it wasn’t right for me to be treated this way.”
The Court of Appeal found the insurance company “…at best, shows reckless indifference to its duty to consider the respondent’s claim in good faith…and at worst, demonstrates a deliberate strategy to wrongfully deny her benefits, regardless of the evidence that demonstrated an entitlement.”
The court highlighted the essential role of deterrence in such cases, stating, “deterrence is impossible unless the punishment is meaningful.” The judges also acknowledged the gravity of the situation, suggesting that a lesser award would fail to capture senior executives’ attention or deter future misconduct, according to the press release issued by Thomson Rogers.
