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TYPES OF DAMAGES - General damages - Categories of - Emotional and mental distress - Exemplary or punitive damages

Monday, February 26, 2018 @ 8:29 AM  


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Action by the plaintiff for damages for mental distress and punitive damages against the defendant insurer. The plaintiff was insured under a group disability insurance policy issued by the defendant. The plaintiff became totally disabled from her employment as a paralegal in June 2011 due to psychiatric illness, including a panic disorder, anxiety and depression. After a series of denials and appeals, despite medical evidence in support of the plaintiff's condition, the plaintiff's claim for Own Occupation benefits was allowed in November 2012. In July 2013, following an independent medical examination, the defendant denied the plaintiff's claim for Any Occupation benefits. Days before trial, the defendant advised the plaintiff it was electing to reinstate her disability benefits with interest on the outstanding arrears.

HELD: Action allowed. The defendant's denials of coverage breached its implicit contractual obligation to weigh evidence fairly and in a manner consistent with the policy wording. The independent medical examination relied on by the defendant demonstrated significant gaps in the reporting of the plaintiff's history. There were serious reasons for the defendant to doubt that the examiner had properly assessed the plaintiff's history and symptoms. The defendant breached its duty of good faith in repeatedly failing to analyze the evidence and making findings not supported by the evidence. The deficiencies in the handling of the plaintiff's claim delayed the acceptance of her claims. The defendant's conduct of its defence was not improper. The mental distress suffered by the plaintiff as a result of the delays in the payment of her claims was sufficient to warrant compensation. The plaintiff was awarded $30,000 in damages for mental distress. The defendant's handling of the claim warranted punitive damages of $30,000.

Godwin v. Desjardins Financial Security Investments Inc., [2018] B.C.J. No. 96, British Columbia Supreme Court, A. Saunders J., January 23, 2018. Digest No. TLD-February262018002