TORONTO, Jan. 8, 2024 /CNW/ – In a landmark decision, released on December 20, 2023, the Court of Appeal for Ontario has affirmed the groundbreaking $1.5 million punitive damages award by a Toronto jury in the case of Baker vs. Blue Cross Life Insurance Company of Canada, solidifying the largest known punitive damages ever awarded in a Long-Term Disability (“LTD”) claim in Canada.
“The Court’s endorsement underscores the significance of holding insurance companies accountable for their actions,” said Stephen Birman, lawyer from Thomson Rogers who, along with Robert M. Ben and Lucy Jackson, represented Sara Baker, the plaintiff, at trial. “It sends a clear message that misconduct by an insurance company will not be tolerated.”
In 2013, Baker suffered a brain bleed/stroke and was denied LTD benefits after Blue Cross Life Insurance Company of Canada determined she could return to work in an alternate occupation that would pay her at least 60% of her pre-disability earnings, despite that her doctors stated otherwise. At trial, she was awarded an unprecedented amount in punitive damages because of the insurer’s misconduct in handling the LTD claim.
“I’m just grateful this is behind me now,” said Baker, “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.”
Recognizing the important role that deterrence plays in dealing with claims against insurance companies, the Court of Appeal noted that “deterrence is impossible unless the punishment is meaningful”. Emphasizing the severity of the situation, the Court of Appeal observed that “it is difficult to envision how an award of anything less than $1.5 million would even garner the attention of senior executives let alone deter future misconduct.”
This landmark case not only provides justice for Ms. Baker but also sets an important precedent for future cases against insurance companies.
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SOURCE Thomson Rogers Lawyers
