This is not an easy story to tell but it is an important one. This is my story about a battle I fought and sadly, lost. By giving away the unfortunate end result at the start of this article, I hope that as you read on. Instead of wondering how it all turns out, you can focus on how the Court’s decision on this issue has and continues to impact disabled individuals in Canada. I also hope that you might begin thinking about creative solutions to help unionized employees achieve equal access to justice when it comes to disputing their Long-Term Disability (LTD) benefit claims with their insurance companies.
If you are a unionized employee who wants to sue for LTD benefits, read on but remember that no two cases are alike and if in doubt, we encourage you to contact MK Disability Lawyers for a free consultation to determine whether or not the law will allow you to sue for LTD benefits. My unique experience in an important case on the issue of jurisdiction over LTD benefit disputes has provided me with in-depth knowledge and understanding of the law necessary to properly assess LTD cases for jurisdictional issues.
I first began to appreciate the injustice surrounding this jurisdictional issue years before I walked into that beautifully adorned Osgoode Hall courtroom to argue against Manulife’s motion to have my client, Adrian Barber’s LTD benefit lawsuit tossed on the basis that the Court did not have jurisdiction over her dispute. It was a long-time before that fateful hearing that I first encountered the jurisdictional issue in LTD benefit disputes. It was also a long time before Ms. Barber that I had encountered a prospective client who I would not be able to help with their LTD benefit dispute because they were unionized and for that reason alone, they would need to go through their union and the arbitration process to fight the denial/termination of their LTD benefits.
It was not uncommon in the years that followed my first meeting with a unionized employee, that I would regularly have to relay this difficult news to prospective clients who came to me, desperately seeking help. As these disabled individuals turned to leave, I would often wonder whether they would have adequate representation at the arbitration of their LTD benefit dispute. I would also wonder whether they would be successful at arbitration, knowing that success at arbitration would be limited compared to potential success in Court.
At arbitration, even if benefits were ordered to be paid to them, these unionized employees would not be afforded the same right to seek damages from the insurance company for such things as emotional and financial distress or for bad faith conduct. There would be no right for them at arbitration to claim compensation for the insurance company’s role destroying them, financially and emotionally. Nor would they likely have representation at arbitration that they themselves had chosen to fight for them at a hearing that could have life-altering consequences.
How was it fair to these disabled individuals to not have the option to take their LTD insurance companies to Court, when they were often the ones paying all or part of the premiums for their disability insurance coverage? How was it fair that insurance companies could avoid any potential risk of paying damages if their policyholder was unionized? Did the fact that they would never be held accountable for their conduct in assessing disability claims affect how these insurance companies handled these claims and the decisions they made? How was it fair that insurance companies were technically not bound by an arbitrator’s decision, in any event? Since the insurance companies are not a party to the collective agreement, what legal requirement was there for them to comply with an arbitrator’s decision to award LTD benefits? The injustice of it all was obvious to me but I would soon find out that it would not be so obvious to our judiciary.
Little did I know back then that years into the future I would find myself working tirelessly to change the law on jurisdiction, arguing vehemently to allow disabled unionized employees the same rights to justice in their LTD disputes as afforded to non-unionized employees. Nor did I ever dream, when taking on that fight, that I would be entirely unsuccessful in my efforts and as such, I continue to find myself in the same heartbreaking position; explaining the injustice of the law of jurisdiction over LTD disputes and turning away disabled individuals, whom I could have otherwise helped.
These days, just like all the other days that have come before, one of the first questions I ask people who are seeking my help with their Long-Term Disability (LTD) benefit disputes is whether they are a member of a union. The answer to this question will usually “make” or “break” the rest of our initial consultation and potentially, determine whether our solicitor-client relationship is “meant to be”. Depending on which union they are with and depending on the wording of their collective agreement, I may or may not be able to help them.
Usually, people who tell me that they are unionized have no idea whether they are able to fight the insurance company in Court or whether they must pursue their entitlement to LTD benefits by way of a grievance and arbitration. If it is not immediately obvious to me, I will sometimes ask that they inquire from their union whether LTD disputes must be grieved or whether they may sue the insurance company in Court. I might also ask to review a copy of their collective agreement. Depending on what their union says and on the wording of their collective agreement, I may be able to determine the proper jurisdiction over their LTD benefit dispute.
Sometimes, however, a prospective client may come to me and explain that they have already sought the assistance of their union and that their union was neither supportive nor helpful. They express their frustration and deep concern that their LTD matter, which affects their entire financial future, has not been taken seriously or has not been made a priority by their union. They may tell me that they filed a grievance but nothing has come of it or that they have a hearing date but their representative or union’s lawyer does not know their case and does not have a background in arguing LTD benefit claims disputes. They tell me that they would like to pursue a Court Action or have me represent them at their arbitration. Generally, neither of these options is possible and they must go to roll the dice at arbitration, relying solely on their union to fight for their LTD benefits.
If we determine that the issue of jurisdiction is not entirely clear based on our reading of their collective agreement and also based on the information they have garnered from their union, we may choose to roll the dice ourselves and issue a Court Action to see whether the insurance company will take issue with jurisdiction in their response to our lawsuit. This “nothing ventured, nothing gained” approach can go either way. In the case of Barber v. Manulife, nothing was gained. Sometimes, however, we find that the insurance company is prepared to have the matter litigated. While other times, the insurance company will argue improper jurisdiction and our client will be forced to go back to their union and participate in arbitration, without our help.
When I tell a person that they have a good claim for LTD benefits and that they should pursue all avenues to dispute a denial or termination of their benefits, they can be disheartened to hear that I will not be able to help them if it turns out the Court lacks jurisdiction to deal with their dispute. Unfortunately for these individuals, the Courts have been clear on this point and there is very little if no room to dispute jurisdiction over LTD disputes where a person is unionized and the LTD policy is incorporated into the collective agreement or benefits are provided by virtue of the agreement. Though the analysis of jurisdiction is more complicated, this is the gist of what the Courts have said and continue to say on this issue. A prime example of a relatively recent case addressing the issue of jurisdiction over LTD disputes is the case of Barber v. Manulife.
A few years ago, I defended a Motion concerning the Court’s jurisdiction over an LTD benefit dispute with an insurance company, where my client, Adrian Barber was a member of a union (police union). Much to my dismay, the judge on the motion sided with the insurance company; finding that Ms. Barber’s LTD dispute must proceed by way of grievance and the Court did not have jurisdiction to deal with the matter because the LTD policy wording was “incorporated” into the collective agreement and the LTD benefits were provided for by virtue of a collective agreement. I lost that motion.
However, I was not willing to give up so easily. It made no sense to me that when LTD benefits are insured by an insurance company (meaning that the insurance company and not the employer assesses and pays the LTD benefits) and the plaintiff pays premiums for the insurance, that the dispute would be required to proceed by way of grievance and arbitration as opposed to Court Action.
It was and continues to be my view that a dispute over LTD benefits is entirely with the insurance company and since the insurance company is not a party to the collective agreement and not bound by an arbitrator’s decision, an arbitration is the wrong jurisdiction for these disputes. Unionized employees could never resolve their LTD disputes directly with the insurance company, if these disputes must always proceed by way arbitration. On that basis, I drafted an application to the Ontario Court of Appeal. I was perhaps far too optimistic the Court would read the materials I had drafted and consider my arguments and understand my position and easily move to overturn the lower Court’s decision. That did not happen. Instead, the Court of Appeal upheld the lower Superior Court’s decision and I had lost, again.
Relentless and determined to assert what I believed to be an access to justice issue, I sought Leave to Appeal to the Supreme Court of Canada; a final “kick at the can” as it were. In my written submissions, I explained in great detail how current law does not adequately address the issue and how the issue of jurisdiction in these types of cases was of public importance; affecting unionized employees across Canada, as well as all of the insurance companies in Canada who provide LTD insurance to unionized employees. Shockingly, (at least to me) I had lost, again. Leave to Appeal was not granted and the Supreme Court of Canada, the highest Court in the land was not willing to entertain my appeal. Three strikes and I was, for all intents and purposes, out. There was no other avenue for me to pursue this important access to justice issue.
Still to this day, I am perplexed by those three losses. What was confounding to me was the Courts’ inability to appreciate the importance of the issue I had brought before them and the apparent simplicity and logic of my arguments. It was clear to me and others that the issue was one of equal access to justice for both unionized and non-unionized disabled individuals in their LTD benefit disputes. If unionized employees were not afforded the right to sue insurance companies for LTD benefits and damages, then they were not provided with the same protections and remedies under the law as non-unionized employees. These individuals would be especially vulnerable to misconduct by insurance companies and they would, in some circumstances, not have proper or adequate representation at the arbitration of their benefit entitlement.
I would be the first to admit that the decisions in Barber v. Manulife were disheartening. I had spent weeks of my life researching law and constructing arguments and drafting submissions. Despite not being rewarded for the time and effort I had poured into the case, I can appreciate that fighting a good fight for an issue I was and continue to feel strongly about, provided me with unparalleled oral and written advocacy experience. However, while I can appreciate the opportunity I had to pursue a legal issue to the highest level, in an area of law which I have dedicated 20 years of my professional life, I still wonder whether there was some other argument or means by which I could have successfully persuaded the Court that unionized employees should have the right to sue insurance companies for their LTD benefits.
Unfortunately, all three Courts in Barber v. Manulife chose to rely on previous decisions where the legal tests, in my view, do not adequately consider the specific nuances of LTD insurance benefit entitlement disputes. The Courts reasoned that the LTD coverage was provided for under the collective agreement and therefore any disputes over LTD benefits were subject to arbitration.
I argued that while entitlement to LTD coverage was one thing (and quite rightly, any issues regarding an employee’s entitlement to LTD coverage must be arbitrated), the entitlement to the actual LTD benefits was an entirely different issue. Entitlement to benefits was determined pursuant to an insurance policy (not collective agreement) and determined by an insurance company, who was not a party to the collective agreement and therefore not bound by any arbitrator’s decision. On that basis, I argued that any dispute concerning the insurance company’s decision to deny/terminate benefits (not coverage) could only be characterized as a dispute with the insurance company (not in any way with the employer) and entitlement to the benefits themselves, could only be determined pursuant to the insurance policy (not the collective agreement) and therefore LTD benefit disputes must be allowed to proceed by way of Court Action.
At the end of the day we are left with the Court of Appeal decision in Barber v. Manulife. The best we can do now, as disability lawyers, is to provide unionized employees with some support, guidance and information when we meet with them; we can offer to consult with their union representative, if they would like; and we can take a run at insurance companies where the collective agreement is not clear with respect to assessing jurisdiction. Beyond that, we can hope (perhaps naively, in some circumstances) that insurance companies will continue to exercise their ongoing duty of good faith in adjudicating and deciding the LTD claims of unionized employees. We can also hope that employers and unions will consider their LTD insurance companies’ conduct in handling their employee/members’ claims when they decide whether to renew their policies or whether to find other insurance providers who may be more fair in their handling of their employee/member LTD benefit claims.
When jurisdiction over an LTD dispute is not obvious, it is important for the disability lawyer to review the tests for jurisdiction set out in the case law and then to determine whether to turn a client away and refer them back to their union or whether to take a chance and issue a Court Action. If you are a unionized employee whose LTD benefits have been denied or terminated, it is best to first check with your union regarding your rights to dispute the issue. Sometimes your union representative might not know for certain whether a Court Action is a viable option. Even if your union tells you that you must grieve the denial/termination, you may want to confirm this information by consulting with a disability insurance lawyer. MK Disability Lawyers offers free consultations and we are able to review your collective agreement and provide you with some additional assurance with respect to jurisdiction.
Remember that a Court Action can provide you with the right to claim damages and make other claims that might not be available to you by way of arbitration. If you have the option, commencing a Court Action can often provide you with a better and more satisfying process and outcome. However, where jurisdiction is not clear, commencing a Court Action will require a strategic and measured approach to ensure that your right to grieve and your LTD insurance rights are not jeopardized.
If your LTD benefits have been denied/terminated and you are a unionized employee, not sure of whether you have the option to sue in Court, we encourage you to contact us for a free consultation.
If you already have a union representative working on your LTD grievance/arbitration, you may still want to contact us to confirm that you are not foregoing a Court Action. LTD insurance law can be complex and we are happy to either consult with you or with you or you and your union to ensure a coordinated approach that achieves the best outcome of all issues.
Together, our three law partners have over 50 years of LTD litigation experience representing professionals, self-employed individuals, teachers other unionized employees and all other types of employees with a variety of medical conditions. It is our hope that the information we have provided here will increase the likelihood of these claims being approved early on so that you can focus on your recovery and eventually, returning to work.
If you have specific questions about LTD claims that have been denied benefits for any reason, please contact us to schedule a free individual consultation. We also invite you to visit our website www.mkdisabilitylawyers.com, where you will find an extensive collection of blog articles about LTD, including our most recent articles:
“LTD and COVID-19: Applying for Disability Benefits During COVID-19,” “LTD and COVID-19: Mental Health Claims Related to the Pandemic” and “Struggling to Be Seen and Believed: Making an LTD Claim for an “Invisible Condition”” and our “Guide to LTD for Union Representatives”, as well as other information related to applying LTD.