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What has my experience been with the LTD insurance company?

When our clients come to us because their long-term disability (LTD) benefits have been terminated, we ask them many questions, including details about their experience in dealing with their insurance company.  

Usually, our clients will have dealt with only one or two different case managers or claims specialists (as they are often referred to), by the time we see them.  For some, despite having their LTD benefits terminated, they may still have had a relatively positive experience with the insurance company; having felt respected and understood by the person or people they dealt with.  

However, more often than not, our clients will describe feeling harassed, manipulated, targeted, bullied and disbelieved by the insurance representatives they dealt with in the course of their LTD claim.  They will express to us that they felt as though the insurance company representatives were “out to get them” and that they were aggressively seeking a basis to terminate their benefits, when no such basis existed.  

My insurance company has caused me to suffer financially and emotionally.

In these circumstances, our clients may tell us that their case manager was aware of their medical condition and of their financial circumstances and despite knowing their vulnerable state, proceeded to conduct themselves in a way that caused our clients extreme stress; often terminating their benefits (with little or no notice), causing them extreme financial hardship.  Our clients will describe conduct that appears to completely disregard our clients’ vulnerabilities. 

The consequences of an insurance company’s representatives’ conduct can be serious and long-term.  For some, it may take years to recover emotionally and financially and others might never fully recover.  For example, the stress of dealing with the insurer, while also dealing with a serious medical condition, could trigger a serious mental health-related illness which could take months or years to effectively treat and to recover from.  Similarly, the stress caused by the insurer’s conduct could aggravate existing physical medical conditions and cause major setbacks in our clients’ recovery.  

Financially, the abrupt loss of income resulting from the termination of LTD benefits could result in our clients having no choice but to cash in retirement savings or force them to sell their home or other assets.  Without an income, some clients are left homeless and without any savings and no money for treatment; all due to the actions of their LTD case manager or claims specialist.

Can I sue the case manager who terminated my LTD benefits?

As a result of how they were treated, our clients will want to sue the case managers or claims specialists personally, because they were the individuals who not only made the decision to terminate their benefits, but also the people who were responsible for causing an aggravation or deterioration of their existing medical conditions or new medical conditions such as, anxiety, panic or depression

In essence, our clients are asking us whether they can sue the specific people they believe wrongly terminated their benefits and whose conduct was the direct cause of or contributed to their emotional and financial distress.  

While it is reasonable to expect that individuals should be held accountable for their actions and for how those actions affect others, in the context of most LTD benefit cases, courts have not been willing to entertain claims against insurance representatives, personally. Unfortunately, we must advise our clients that it is not normally possible to sue the specific people that our clients believe wrongly terminated their benefits and whose conduct caused or contributed to their emotional and financial distress.  

Guidance from the Burns v. RBC Life, McLean and Oslizlok case

The recent Ontario case of Burns v. RBC Life, McLean and Oslizlok, provides an excellent explanation of why LTD claims specialists and case managers can not normally be sued, personally. 

In the Burns case, the plaintiff, Mr. Burns, had a disability benefits insurance policy issued by the defendant, RBC Life Insurance Company. The Defendants, Mclean and Oslizlok, were the RBC Life employees who administered Burns’s long term disability claim.  Burns alleged in his statement of claim that he stopped working as a fire alarm system technician in June 2013 after he began experiencing pain in his lumbar spine, waist, and lower right extremity. He was diagnosed with disc protrusion and cauda equina syndrome, and as a result, underwent urgent spinal surgery.   RBC Life approved Burns’s LTD benefit and paid LTD benefits to Burns for five years. Then, in October 2017 Maclean, a disability claim specialist, advised Burns that his LTD benefits were being terminated. In 2018 Oslizlok, an appeals consultant, denied Burns’ appeals of the termination of his LTD benefits.

When faced with the issue of whether Mr. Burns could sue the insurance representatives personally, the Ontario Superior Court of Justice struck the claims brought by Mr. Burns against the RBC Life disability claim specialist and appeals consultant in their personal capacities because the claims did not “manifest a separate identity or interest from their employer and the employee’s actions are themselves tortious”. 

The Ontario Court of Appeal upheld this decision on appeal and found that the alleged misconduct of Ms. Mclean and Ms. Oslizlok (the insurance representatives) arose as an aspect of their being employees and did not constitute any independent interest they might have had outside of their role as employees. In other words, the Court concluded that the allegations against Ms. Mclean and Ms. Oslizlok did not manifest a separate identity or interest from their employer, RBC Life, who was vicariously liable for their misconduct as employees. 

How can I get compensation for how my LTD case manager treated me?

In the end, we must explain to our clients that, while it may be difficult (if not impossible in most cases) to argue that the specific people responsible for terminating our clients’ claims and for aggravating their financial and emotional conditions, these claims can still be made against their insurance company and that, depending on the evidence, these claims can be and will be aggressively pursued in litigation.  

On a positive note, awards for bad faith and aggravated damages have become larger and more frequent in Ontario and throughout Canada.  (Please see our upcoming article on Bad Faith and Aggravated Damages, for more information.)

What types of claims can I make against the LTD insurance company?

Mr. Burns’ Statement of Claim and the Court of Appeal decision contained several bad faith, aggravated and punitive damages claims that are typically made in cases where the insurance company’s conduct has been egregious and caused financial and emotional distress. These include:

(a) they terminated Mr. Burns’ LTD benefits on the basis of an erroneous, extra-contractual, reckless, misleading, and/or bad faith interpretation of the language of the Policy;

(b) they terminated Mr. Burns’ LTD benefits on the basis of language, criteria, terms, and/or conditions that were not prescribed in the Policy and which they, instead, elected to import into the Policy;

(c) they terminated Mr. Burns’ LTD benefits on the basis of their unilateral interpretation of the phrase “gainful occupation” in the Policy and despite the Insurer’s written admission of May 4, 2018 that “the term gainful occupation is not defined in the policy”;

(d) they terminated Mr. Burns’ LTD benefits on the basis of a single, 16 year old, extra-provincial case involving a different type of insurance policy and different type of benefits;

(e) they “cherry picked” case law when interpreting the Policy and terminating Mr. Burns’ LTD benefits;

34. Mr. Burns pleads that the Defendants knew or ought to have known that at or around the time that it terminated his LTD benefits and/or denied his appeal(s), Mr. Burns was under financial strain and was financially dependent upon the receipt of his LTD benefits. The Defendants nevertheless embarked upon a course of conduct that caused and/or aggravated Mr. Bums’ vulnerable psycho-emotional state.

35. Mr. Burns pleads that in terminating his LTD benefits when it did, and without any material change since the Insurer had found him totally disabled for over five years, the Defendants engaged in bad faith, high handed, reckless, wilfully ignorant, and/or grossly arbitrary conduct. So as to condemn this conduct, to modify the Defendants’ behaviour, and/or to deter the Defendants from engaging in such conduct in future, Mr. Burns pleads that an award of punitive, aggravated, and/or exemplary damages are warranted.

Bad Faith and Aggravated Damages Claims are Complex 

While you may be able to look at the list above and find that many of the claims could apply to your case, it is important to retain a disability lawyer experienced in litigating complex LTD disputes.  A thorough review of the claims file; a detailed interview with the client; and a strategic examination for discovery of the insurance company representative will be necessary before determining the potential success of any bad faith-related claims.  

If your LTD claim has been denied or terminated or if you are currently receiving LTD benefits but the insurance company’s conduct is negatively impacting your mental health, we encourage you to contact us for a free consultation.  We are a women-led team of disability lawyers experienced in representing clients in their complex LTD claims for benefits and bad faith damages. Please contact MK Disability Lawyers online or call us at 1-844-697-4600.

The preceding is not intended to be legal advice.  This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice.  By using this blog, you understand that there is no solicitor-client relationship between you and the blog publisher.  The blog should not be used as a substitute for competent legal advice from a licensed lawyer in your jurisdiction.  If your disability claim has been denied and you require legal advice, contact a lawyer specializing in disability law.