Showing posts with label good faith. Show all posts
Showing posts with label good faith. Show all posts

Friday, February 20, 2015

After my presence on CBC radio show, insurer cuts my benefits

January 8, 2015

Since I was on CBC's Ontario Today show on January 21st - 'So You Think You're Covered! (can listen to podcast by going to previous episodes), the car insurer paying my income replacement benefits has cut them without warning, Ten days after the show they prepared an Explanation of Benefits form and wrote: "Since you now have earnings which we can deduct from your weekly benefit entitlement, we cannot consider any further payments until we receive copies of earnings statements. You must submit a copy of each earning statement. Please note that we require documentation of any/all post accident income you have received. Please provide copies of your tax returns for the last 5 years."

You would think that they might first ask for these documents and then cut you off if you refuse, don't send them within a certain time period or have made a lot of money which you've been hiding. But I am found guilty from the get-go and lose my benefits immediately. I am cut off while getting to them what they request and are happy with the response. Going on public radio has displeased them tremendously so they are punishing me financially. For those of you who think people with serious injuries are scamming their insurers, think again. Winning my court case and the appeal doesn't mean they will ever leave me alone. People have no idea what they will have to face when they require their insurer to honour their policy for accident or disability benefits.
 
I have no idea what earnings they surmise me to have other than they think I am making money on the book, which was showcased on Ontario Today. It is interesting that they don't say what they think those earnings are based on, only that I have them. However, I am well in debt writing this book as I've been giving out copies all over the place to make people aware of what insurers do to legitimate claimants. The few book sales after the show are a pittance in relation to my disbursements.  I'm the first one to speak up by writing a book and they want to shut me up right quickly. And people think they're the good guys and claimants are the fraudsters. I won't be shut up. I am presently working (have been for weeks) on a major research piece backed by strong references (court cases, govt. docs, College of Physician and Surgeons and much more) which will show how shoddy these guys really are. This piece lays it on the line and exposes the industry with proof of altered assessment reports from catastrophic to non catastrophic, and much more. I can back up everything I say.
 
Insurers have the right to request your tax returns and send you to more medical evaluations even after you have won your case. But cutting off my benefits without warning, based on their notion that I now have earnings is incredible and is, as a matter of fact, intimidation and harassment. And this after an IBC rep (Insurance Bureau of Canada which is the industry umbrella for insurance companies) is on the show and probably ticked off to no end that someone had the audacity to write a book about what insurers do to claimants to deny their benefits as well as show readers how to fight back and get through the process successfully. A  good friend of mine who was in a serious car accident in May was sent  for an insurance assessment this past Jan. 7th. The assessor denied her claim verbally (didn't even have to wait for the forthcoming written report to get the news) saying, "It doesn't matter what I write on the assessment, the insurance company will deny it. If you appeal, they will send you to someone else and then deny that, because that is what insurance companies do."

Source: http://deniedbenefitclaims.com/blog.html

Wednesday, December 31, 2014

Ontario ombudsman accuses auditor general of ‘perilous’ power play

Andre Marin alleges Bonnie Lysyk is trying to limit his office, which has tackled systemic issues in the past, to investigating nothing but individual complaints.

“This (the auditor general's proposal) would constitute a perilous and massive step backward in terms of accountability and transparency … it would lead to neutering and gutting our office of its most valuable tool to help people,” Ontario Ombudsman Andre Marin said in a five-page letter.
Richard J. Brennan / Toronto Star File photo 

“This (the auditor general's proposal) would constitute a perilous and massive step backward in terms of accountability and transparency … it would lead to neutering and gutting our office of its most valuable tool to help people,” Ontario Ombudsman Andre Marin said in a five-page letter. 

Ontario Ombudsman André Marin is firing back at what he calls a “perilous” power play by Auditor General Bonnie Lysyk to restrict his investigative authority.

The Star has obtained a five-page letter that Marin wrote to Lysyk after she urged MPPs on a legislative committee last week to limit the ombudsman’s office to investigating individual beefs from citizens instead of looking as well into larger systemic concerns.

That would leave Marin — whose 30 broad-based investigations have exposed such issues as illegal child-care operations and have pushed for better screening of diseases in newborns — limited to probing one-off complaints.

“What you propose is essentially the abolition of the ombudsman’s ‘own motion’ investigative authority, which has existed in the (Ombudsman) Act for 39 years and served Ontarians well,” wrote Marin, who is nearing the end of his second five-year term in the post.

“This would constitute a perilous and massive step backward in terms of accountability and transparency … it would lead to neutering and gutting our office of its most valuable tool to help people,” he said.

Lysyk, who became Ontario’s auditor general last year after holding a similar job in Saskatchewan, was testifying before a committee studying the Liberal government’s Bill 8 on improved accountability measures.

Among other things, the Public Sector and MPP Accountability and Transparency Act would extend the ombudsman’s powers to include oversight of municipalities, school boards and universities.

Lysyk argued her auditor general’s office, not the ombudsman, should be responsible for investigating systemic problems within the government and its agencies.

On Sunday night, she defended her remarks to the MPPs, saying she wanted to present a “different perspective.”

“Everybody has the right to talk to a committee of the legislature. Everybody should be able to share their views,” she told the Star. “‎Whatever they decide, I respect.”

The auditor general said she was taken aback by the ombudsman’s letter.
“‎Mr. Marin obviously has different views and doesn’t take kindly when you don’t have the same views. At least he didn’t call me a slippery pig,” she added, alluding to his report into overbilling at Hydro One.

Lysyk said she made her remarks to the committee in a bid to get “clarity” in areas in which both her office and Marin’s share oversight, such as their separate investigations into Hydro One.

Marin’s letter said he was “shocked” and “blindsided” by Lysyk’s testimony, which went largely unnoticed last Wednesday.

“The ombudsman’s focus has always been and will remain on issues of administrative fairness … while the auditor general’s role is primarily to ensure financial integrity. Our two offices have coexisted for decades,” he wrote. “Bill 8 does not propose any change that would fundamentally alter the current state of affairs.”

The dispute comes as both their offices have been investigating Hydro One overbilling of customers. Marin has already issued a report. The auditor is expected to address Hydro One in her annual report, due later this month.
Marin’s letter, dated Friday, follows a tweet from his account at @Ont_ombudsman calling Lysyk’s remarks to the committee an “astoundingly inept attack on Bill 8.”

Aside from Lysyk, Marin sent copies of his letter to Premier Kathleen Wynne and MPPs on the legislative committee studying Bill 8, among others.



Source: http://www.thestar.com/news/canada/2014/12/01/ontario_ombudsman_accuses_auditor_general_of_perilous_power_play.html?app=noRedirect
 

Expert opinion evidence is no longer present

Burwash v. Williams, 2014 ONSC 6828
COURT FILE NO.: 09-43777
DATE: 2014/11/25
[6]               Cira is not a party to this litigation. It is a national company in the business of providing medical assessments and health services for several corporate, insurance and medical legal communities through a network of independent health professionals. Cira was created in June 2012 and is a combination of two companies, namely, Riverfront Medical Services (“Riverfront”) and Medisys IMA.
[7]               The Defendants retained Cira to co-ordinate defence medical examinations of Ms. Burwash conducted pursuant to s. 105 of the Courts of Justice Act, R.S.O. 1990, c. C.43.
[8]               The Defendants do not object to the production of the files.
[9]               The Defendants have requested disclosure of Cira’s complete files.  The Plaintiffs allege that only partial production of the files has been made to date.
Timing of the Motion
[10]           The Plaintiffs assert that they had no reason to suspect that Cira was involved in the review, revision and editing of draft expert reports until the examination for discovery of Dr. St. Pierre when answers and subsequent productions indicated that Cira may be using third parties to review and revise the Defendants’ expert reports.
[11]           I am satisfied that the Plaintiffs have brought this motion at the earliest opportunity and that they could not have reasonably discovered that the issue existed any earlier.
[28]             Rule 53.03 of the Rules of Civil Procedure is designed to ensure the independence and integrity of the expert witness. The duty of the expert witness is to be of assistance to the court. Each expert witness is required to sign an acknowledgement that they are providing an independent and unbiased opinion. If there is reason to believe that the expert’s report or opinion has been influenced by unknown third parties and is therefore not entirely the expert’s opinion, the fundamental rationale for accepting expert opinion evidence is no longer present and hence the report is not only not helpful to the court but may become misleading. This is an issue that is directly related to trial fairness.
Source: http://www.fairassociation.ca/

Sunday, November 9, 2014

Home insurer delays while couple freezes: Roseman

A couple waited two months in a freezing home to get their heating fixed by their insurer. Hiring their own contractor led to only a small settlement.

Insurance companies admit they find it hard to cope with severe weather events such as the ice storm that hammered Toronto last December. Stretched to capacity, they often use a triage system – as hospitals do – to deal with the worst cases first. 
CANADIAN PRESS FILE PHOTO
Insurance companies admit they find it hard to cope with severe weather events such as the ice storm that hammered Toronto last December. Stretched to capacity, they often use a triage system – as hospitals do – to deal with the worst cases first. CANADIAN PRESS FILE PHOTO 

Sandra and William lost their power during Toronto’s ice storm last December. They later found their boiler had sprung a leak, knocking out their home heating.

The couple waited two months in a chilly house for Aviva Canada, their insurance provider, to restore the heating. Fed up with the slow response, they hired a contractor to replace the boiler system at a cost of $27,500.
Aviva Canada agreed to cover only $6,500 of their costs, saying it hadn’t approved the claim before they went ahead with the work. An appeal to the ombudsman didn’t help.

“We believe we were mistreated by Aviva,” says Sandra. “It is unacceptable to keep a family without adequate heat for two months during the coldest winter on record in Toronto.

“The company is arguing that the work was not necessary, but they did not respond in a reasonable way or in a reasonable time frame when we were freezing and sick.”

As winter approaches, homeowners could face another storm that results in property damage and insurance claims. How can they get good service during a crisis?

Insurance companies admit they find it hard to cope with severe weather events. Stretched to capacity, they often use a triage system – as hospitals do – to deal with the worst cases first. 

The ice storm last December resulted in more than $200 million worth of property damage in southern Ontario. Aviva faced more than 1,400 claims in a short period, said spokesman Glenn Cooper.

“In these situations, our adjusters are forced to prioritize, based on severity of damage and customer safety,” he said. “After events that have such a widespread impact, the unfortunate situation is that contractors are at capacity, resulting in service delays and longer wait times for repairs.”

Sandra and William stayed home rather than move out and charge for additional living expenses, as their policy allowed them to do. They thought their claim would be handled more quickly.

Here is a summary of their two-month ordeal.

On Dec. 27, the couple shut off the water going to the heat exchanger. On Dec. 30, they informed Aviva of the issue. On Jan. 2, Aviva’s restoration company sent someone to replace the soaked attic insulation.

On Jan. 7, another contractor came to check the heat exchanger. The couple never heard anything again.

On Jan. 14, yet another contractor came to the home and found a fire hazard. The heat exchanger’s motor was still connected to electricity and was turned off.
On Jan. 21, the couple contacted their insurance broker. Could it ask Aviva’s adjuster to return their calls and report on their claim?

On Jan. 28, the adjuster left a telephone message, telling them to go ahead and hire their own contractor to resolve the heating issue. 

On Feb. 13, the couple called the adjuster – who was not available – and left a message. There was so much damage caused by freezing and loss of power that the entire system had to be replaced. Was that OK?

On Feb. 14, they left another message for the adjuster, whose voice mail did not give details of anyone else to call. Aviva’s customer service centre said they had to use the same adjuster and wait for a return call.

On Feb. 21, their chosen contractor restored the heating.

On Feb. 28, the adjuster called and left a message, saying she had been sick. Could they send the contractor’s report?

Aviva’s ombudsman, Lori DeAcetis, told the couple they had misunderstood the instructions given by the adjuster (by voicemail message). They were authorized only to obtain an estimate for review. Meanwhile, the insurer offered only $6,500 because the home’s heating system could have been repaired. 

“When a system fails due to inability to handle certain events, insurance policies do not cover replacement – just as a roof that is old and in need of replacement would not be covered if a leak were to occur,” Glenn Cooper added.

Advice: If you are told to hire your own contractor, do not proceed with work until you have the insurer’s approval in writing for the costs. Keep calling until you reach someone in the claims department.

Source: http://www.thestar.com/business/personal_finance/insurance/2014/10/14/home_insurer_delays_while_couple_freezes_roseman.html#
 

Monday, October 6, 2014

Rothbart Centre outbreak might have started earlier: lawyer

More patients treated at private clinic tell of medical ordeals that occurred before the time window identified in a Toronto Public Health probe.

Michael Glass has no memory of three weeks of his life in the spring of 2012. But the scars that run down his spine attest that something awful happened during that time.
The 67-year-old man nearly died after developing a serious infection in his spine and then sepsis, a life-threatening inflammatory response to the infection.
According to hospital charts, the spinal abscess was likely caused by an epidural steroid injection he received two weeks before he fell ill. Other medical records show he received the injection, for relief of back pain, at Toronto’s Rothbart Centre for Pain Care.
A neurosurgeon who performed emergency surgery told Glass’ wife there was a good chance he wouldn’t make it.
He did survive — but with a much-diminished quality of life.
The Rothbart clinic was the focus of a probe by Toronto Public Health (TPH) later in 2012. It found nine patients had developed serious infections after getting epidural steroid injections there, a recent Star investigation revealed. It identified the outbreak as running from August to November 2012.
But Paul Harte, a medical negligence lawyer representing Glass, said his client’s experience — and that of others who have come forward since the story ran — indicates patients were getting infected much earlier than the time frame indicated by Toronto Public Health.
“Since the Toronto Star broke the story about the Rothbart clinic, we have heard from almost two dozen people with concerns about infections they say they contracted at the clinic, many outside the outbreak period identified by TPH,” said Harte, who has launched a proposed multimillion-dollar class-action lawsuit against the clinic and two of its doctors.
The new reports of illness raise questions about whether Toronto Public Health erred on the timing and scope of the outbreak.
“Mr. Glass’s case demonstrates that TPH got the outbreak window wrong. It appears certain that there were earlier cases. We have heard from patients with infections as far back as 2011,” Harte said.
TPH insists it carried out its investigation correctly.
The new reports of illnesses also raise questions about the effectiveness of the College of Physicians and Surgeons of Ontario (CPSO) inspection program for “out-of-hospital” premises such as the Rothbart clinic. The clinic passed a college inspection in December 2011.
Harte said there must be a better of way of sounding the alarm when patients develop serious infections at clinics, especially when the province is moving more services, such as pain treatment, out of hospitals and into community clinics.
Health Minister Eric Hoskins told the Star on Saturday that sweeping measures he is introducing to improve transparency in the health system should help address problems like this.
His plans include strengthening oversight of clinics like the Rothbart centre with the aim of ensuring patient safety. He has asked Health Quality Ontario to lead an evaluation of current oversight programs in such clinics and to make recommendations on improvements.
Glass, a retired postal worker from Scarborough, went to the Rothbart clinic on May 2, 2012, for an epidural steroid injection to relieve back pain, his medical records show. Ten days later he went on vacation to Phoenix, Ariz. He started feeling ill shortly after his arrival.
“My legs felt like they were on fire. I started getting delirious. From that point I have no memory,” he recounted.
His wife, Lorraine, picks up the story from there.
“We got there on a Saturday, and by Monday he was not making any sense. He was clammy and he could hardly walk. We couldn’t get him up,” she said.
Glass was taken by ambulance to hospital, where, according to his medical records, he was diagnosed with an epidural abscess — an infection on his spine — and with sepsis, a potentially life-threatening condition caused by infection.
He underwent emergency surgery to drain what his charts described as a “copious amount of epidural pus” and to relieve pressure that the abscess was putting on the spinal nerves.
“The surgeon said that when they opened him up there was so much infection it was just like pea soup,” Lorraine said.
The surgeon, she said, warned her that her husband might not survive.
“They gave him a two out of 10 chance to live,” she said, and the hospital chaplain was sent to comfort her. “I was a mess. It was a horrible, horrible experience. I thought I was going to have a nervous breakdown, I truly did.”
Glass said he spent 12 days in intensive care in Phoenix before doctors deemed him medically stable enough to be airlifted back to Toronto. He spent another week in the ICU at the Scarborough Hospital.
Fortunately, the couple had travel insurance. The bills for Glass’s care in the U.S. and his air ambulance flight totalled $390,000, they said.
Dr. Michael Finkelstein, Toronto’s associate medical officer of health, said TPH became aware in late November 2012 that three Rothbart clinic patients had developed meningitis.
Meningitis is a reportable disease: when hospitals and health professionals encounter a case, they are required to inform public health.
The meningitis cases sparked an investigation into the outbreak, which found that a total of nine patients developed serious infections, including epidural abscesses, between August and November 2012.
All had received epidural steroid injections at the clinic from anesthesiologist Dr. Stephen James, who told the Star he was unknowingly “colonized” at the time with Staphylococcus aureus.
About 25 per cent of humans are colonized with the bacteria, meaning it is present on the skin but does not make the person ill. But it can be potentially deadly if it enters a puncture in the skin.
The Toronto Public Health investigation found 170 deficiencies in infection control at the clinic, including inadequate hand hygiene and sterilization of equipment.
Finkelstein said TPH is not aware of any infections linked to the clinic prior to the outbreak. Asked how this could be, given that so many people have since come forward, he said infections such as abscesses are not reportable diseases to public health.
When asked if there should be a way to track non-meningitis infections at clinics, Finkelstein responded: “This is a provincial policy decision related to designating reportable diseases and patient safety issues.”
Harte charges that Toronto Public Health didn’t cast its net wide enough in its investigation.
“Had TPH issued a media release, they would likely have discovered earlier cases and done a more thorough investigation,” he said.
As part of its investigation, Toronto Public Health did a “look-back,” which involved attempts to contact 272 patients who had visited the clinic between Aug. 1 and Nov. 30, 2012, a time frame chosen to take into account the two-week incubation for meningitis.
The nine infected patients were found several ways: through the look-back, by interviewing James about patients he knew had fallen ill, by looking at a provincial system that tracks reportable diseases and from hearing from other health professionals about infected patients.
“We were satisfied there wasn’t anybody else out there,” Finkelstein has previously told the Star, explaining that Toronto Public Health’s job was to ensure the outbreak was under control.
He said TPH issues media releases about outbreaks only when it is trying to find others who might be at risk. But if it can reach them directly — through a look-back, for example — there is no need for a media release.
“It is not our routine practice to make these outbreaks public,” he said, explaining why investigation results were not posted on TPH’s website.
Finkelstein said that TPH is exploring ways to provide more information about outbreaks in future.
Glass thought his infection was an isolated case until he opened up the Star two weeks ago.
“I couldn’t believe it,” he said. “Nobody contacted me from the health department or the clinic. If not for reading the paper article, I wouldn’t know anything about it.”
In addition to Glass, the Star has heard from a number of other former patients who say they got bacterial infections at the clinic. One is a 51-year-old Scarborough woman who asked that her name not be published.
She said she was diagnosed with an intramuscular abscess at the base of her skull after getting an occipital nerve-block injection for neck pain from James on March 15, 2011.
A week later, she was admitted to hospital after showing up at an ER with severe pain in her neck and a fever. Her entire body had turned red.
“I was really sick. I thought I was going to die that first night in the ER, that’s how bad I felt,” she said.
She spent a total of eight days in hospital, undergoing surgery to drain a staph A-filled abscess, she said. Her doctors told her it was related to the nerve-block injection.
She then developed Stevens-Johnson syndrome, an allergic reaction to antibiotics, she said. It causes the top layer of skin to die and shed.
The woman said she informed both Dr. James and a nurse at the Rothbart clinic about her illness.
James told the Star that health privacy laws prohibit him from discussing any patients.
The college’s 2012 report on its out-of-hospital premises inspection program states: “The public can be reassured that those premises that receive an inspection outcome of ‘pass’ are meeting a high standard of practice.”
Harte said the fact the Toronto Public Health inspection confirmed nine patients of the Rothbart centre developed serious bacterial infections less than a year after the clinic passed a college inspection is cause for concern. So is the fact the investigation found 170 infection-control deficiencies.
What’s even more troubling, he said, is that so many other former patients have come forward saying they developed infections as far back as March 2011.
Based on the passing inspection grade, “the public was told the Rothbart clinic was meeting a high standard of practice when it had substandard infection control practices,” Harte said.
“We need a public review of the CPSO inspection process to determine what needs to be fixed to re-establish public confidence in the system.”
Asked how the Rothbart clinic could have passed an inspection in December 2011, given all the problems that subsequently came to light, college spokesperson Kathryn Clarke said inspection outcomes reflect the conditions found when college officials do assessments.
“Inspection-assessments are point-in-time reviews and the expectation is that the premises will keep to the standard which earned them a pass,” she said.
Clinics are typically inspected every five years to ensure patients are kept safe with appropriate infection controls and with proper equipment and staff. But college officials will go back in sooner if, for example, they get a report from public health officials of problems.
In the case of the Rothbart clinic, the college has done four more inspections since 2011. It passed three “with conditions” related to improving infection control measures. It was given a full pass on the fourth inspection last month.
The college’s online register makes no mention of the 170 infection-control deficiencies found during the Toronto Public Health inspection. Nor does it mention that TPH confirmed nine people developed serious infections during an outbreak.
Clarke said the college’s bylaws do not permit it to make public any more information about clinic inspections than is already posted.
But, as Harte sees it, the lack of transparency compounds the problem: “Because so little information is provided, the public is entirely reliant on CPSO inspection results and there is now real reason to doubt that the CPSO inspections are being done adequately.”
The lack of transparency was highlighted in another recent Star story that showed the CPSO and TPH have also not made public three hepatitis C outbreaks at colonoscopy clinics since 2011.
Glass said his life has drastically changed since he got sick: “It has really affected the quality of my life because I was a pretty active guy before.”
He said he has lost nerve sensation on the left side of his back and has constant pain in his lower back. He takes 28 pills a day, many of them painkillers.
He feels most comfortable when he is lying down, so he spends 80 per cent of each day in bed, watching a lot of television.
Sleep is difficult, Glass said, explaining he usually gets only two or three hours a night. He often gets up during the night to take Epsom salt baths to relieve the pain.
He has difficulty getting around and must use a cane if he has to go long distances, he said. “If I go to Costco, most times I get a motorized cart because I can’t walk for a long time.”
Glass and his wife used to take two or three vacations a year but travel is now out of the question.
“I’m pretty well confined because of all the problems,” he said.
He has gained weight, lost sexual function and suffers cognitive impairments, he said.
“I had a very sharp memory and I was very good with figures. It has affected my penmanship. I’m a lot shakier now,” Glass said. “My speech at times slurs if I am talking for awhile.”
His mood has also been affected, he said, explaining he is often irritable.
“I have gone from a cheerful person to kind of angry now, all the time,” he said.
Lorraine said she is grateful her husband survived the ordeal.
“The quality of his life will never be the same. However, he is still with us, he’s still with our family, and we have to feel fortunate for that,” she said.
She said it’s difficult to understand why the infection problems at the clinic weren’t picked up sooner:
“It is so unnecessary that this had to happen to all these people. It is really sad to think it might have been prevented.”
 
Source: http://www.thestar.com/life/health_wellness/2014/10/05/rothbart_centre_outbreak_might_have_started_earlier_lawyer.html
 

 

Punitive Damages, and Insurer Conduct – The Court of Appeal Upholds a $200,000.00 Award

Written by
October 2014

In Fernandes v. Penncorp Life Insurance Company, [2014 ONCA 615], the Court of Appeal upheld the Trial Judge’s decision awarding $200,000.00 in punitive damages. The Court of Appeal did, however, reduce the damages for mental distress from $100,000.00 to $25,000.00. On appeal, the Defendant Insurer argued that there was no reasonable basis for an award of punitive damages and that the damages for mental distress were excessive.

The Plaintiff was a bricklayer.  On December 11, 2004, Mr. Fernandes fell off a scaffold and injured his back.  Two days later, he fell off a trailer and again injured his back.  Following the two accidents, he was unable to work. As a result, his successful company ceased operating and his employees departed.  At the time of the incidents, he was 40 years old.

The claim was advanced against his disability carrier, Penncorp Life Insurance.  This policy entitled him to benefits for a period of two years if he was unable to work at his own occupation as a result of injuries.  Thereinafter, the policy entitled him to benefits if he was disabled from working at any occupation for which he was reasonably suited by education, training or experience. While the insurer paid disability benefits, they were terminated as of July 21, 2005.

The Court of Appeal recognized that the Insurer disputing or refusing a meritorious claim did not, in itself, constitute a breach of the duty of good faith.  The Court of Appeal cited the decision in 702535 Ontario Inc. v. Lloyd’s of London, Non-Marine Underwriters [2000 CanLII 5684] which described the parameters of an Insurer’s duty as follows:
The duty of good faith also requires an insurer to deal with its insured’s claim fairly.  The duty to act fairly applies both to the manner in which the insurer investigates and assesses the claim and to the decision whether or not to pay the claim.  In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced and reasonable manner.  It must not deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement.  A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy.  This duty of fairness, however, does not require that an insurer necessarily be correct in making a decision to dispute its obligations to pay a claim.  Mere denial of a claim that ultimately succeeds is not, in itself, an act of bad faith.
When these principles were applied, the Court of Appeal noted that the Trial Judge considered the applicable jurisprudence.  The Trial Judge concluded that in addition to the breach of the insurance contract to pay disability benefits, the Insurer had also breached its duty of good faith.  The Trial Judge found that the Insurer had not dealt with the Insured in a fair and balanced manner.  Instead, the Insurer’s representative had taken an adversarial approach to the claim.  The Insurer’s representative stopped benefits based on a vacuum of medical evidence that would support the Insurer’s claim. This resulted in the benefits being terminated contrary to the medical evidence.  Further, the surveillance evidence did not reasonably support the decision to terminate benefits.  Finally, the Insurer failed to formally advise the Insured of the termination of benefits until five months after the fact.  It simply ceased sending disability cheques.
With respect to the mental distress damages award, the Insurer acknowledged that benefits were owing but took issue with the quantum of same.  The Court of Appeal noted that there was no explanation for how the Trial Judge arrived at his figure of $100,000.00 or what facts justified such an amount.  The award appeared inordinately high and entirely disproportionate, where the evidence was that circumstances apart from the appellant’s conduct contributed to the psychological distress.  The Court of Appeal noted that the cases which were cited by the Trial Judge ranged from $20,000.00 to $25,000.00.  Accordingly, the amount was reduced to $25,000.00.

This case confirms the need for Insurers to ensure that a decision to terminate benefits is well supported by medical and other evidence. Further, the Insurer must continue to consider information as it becomes available to make certain that their termination is still warranted in light of new documentation. The failure to do so could expose Insurers to significant punitive damages.

Source: http://lernersinsurancedefence.ca/reference-library/323/
 

Drew Hasselback: Pinning down a legal definition of good faith

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More from Drew Hasselback

The law might require you to negotiate agreements in 'good faith,' but that concept doesn't come with a ready-made list of Dos and Don'ts
  • The legal and ethical implications of bluffing have been around for eons.
Back in 1968, Albert Carr published a paper called the “Is Business Bluffing Ethical?” in the Harvard Business Review. He argued the more a businessman respects the truth, the more respect he deserves. Yet bluffing, he added, is not morally offensive because it’s an acknowledged strategy in the negotiating process.

To crudely paraphrase his point (and that of Henry Taylor, whom he cites with authority): You’re not really lying when no one expects you to be telling the truth.

So what about the law? Is it legal to bluff when you’re negotiating a contract?
The law addresses this question from several angles. One of these is the “duty of good faith” — an obligation that binds the parties to act in a way that does not defeat the object or purpose of a contract. The law tells us that while you’re entitled to act in your own self-interest, you must also be honest and candid when negotiating or implementing anything in an agreement that goes to the purpose and objective of the deal.

I think the law lines up with the Carr position: Bluffing is fair when no one expects the truth, lying is out-of-bounds when people expect full disclosure.
That might answer the question for judges and lawyers, but I’m not sure the legal approach easily translates into a checklist of Dos and Don’ts that would satisfy the practically minded. You can let your moral compass guide the way, but entrepreneurs aren’t ones to opt for the safest route in every instance.

There are some areas of law, such as labour and insurance, where “good faith” becomes part of every contract, even if those words are absent from a written deal. But even when “good faith” is not a specific term of a contract, it can become the focus of a lawsuit over how a deal was negotiated or implemented. One of the legal problems is whether the existence of “good faith” creates a basket of identifiable rights the parties can rely on.

A recent example of this is an Ontario case called SCM Insurance Services Inc. v. Medisys Corporate Health LP. These companies had a deal in which SCM was granted what the judge called a “right of first negotiation” should a particular Medisys division come up for sale. This happened. The two sides held negotiations but couldn’t reach a deal.

SCM then challenged whether Medisys had actually negotiated in “good faith.” When the talks failed, Medisys struck a deal with a third party. SCM argued that “good faith” meant it should have been given a right to match the offer from the third party buyer. The judge disagreed. The duty to negotiate in good faith was satisfied when Medisys gave SCM a reasonable opportunity to buy the business, the judge said, adding that it doesn’t include the creation of rights that weren’t specifically included in the deal.

But remember that case law looks backward at past events. The SCM case is how one judge applied the notion of “good faith” in one case. A future judge may find that acting in “good faith” triggers some specific acts or behaviours.

“This case is a good reminder that, in certain circumstances, courts may be prepared to imply duties of good faith into commercial arrangements, even where the parties are at arm’s length,” wrote Larry Lowenstein, Laura Fric, Robert Carson of Osler, Hoskin & Harcourt LLP in a note on the SCM case.

This is an area where the law will always be ambiguous. Case law might provide some clarity. But if you’re looking for a bright-line test, you’ll have to rely on your own sense of whether you’re doing the right thing. Even if you think you’re onside with the law, enough ambiguity remains on the table for legal disputes to arise.

Financial Post
dhasselback@nationalpost.com
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Source: http://business.financialpost.com/2014/09/22/drew-hasselback-pinning-down-a-legal-definition-of-good-faith/