In a significant ruling, the Court of Appeal for Ontario has upheld the ground-breaking $1.5 million punitive damages award by a Toronto jury in the case of Baker vs. Blue Cross Life Insurance Company of Canada. This decision marks the highest punitive damages ever granted in a Long-Term Disability ( LTD ) claim in Canada. Stephen Birman, the lawyer who represented the plaintiff, Sara Baker, stated that the court’s decision underscores the significance of holding insurance companies accountable for their actions.

In 2013, Baker suffered a brain bleed/stroke and was denied LTD benefits by the Blue Cross Life Insurance Company of Canada, who determined she could return to work in an alternate occupation that would pay her at least 60% of her pre-disability earnings, despite contrary opinions from her doctors. Due to the insurer’s misconduct in handling the LTD claim, Baker was awarded a significant amount in punitive damages.

The Court of Appeal found the insurance company to have been reckless and indifferent, or a possibly deliberate strategy was adopted by them, leading to the wrongful denial of her benefits. The court acknowledged the critical role of deterrence in dealing with claims against insurance companies, highlighting the severity of the situation and emphasizing that the punishment must be meaningful. It was observed that an award of anything less than $1.5 million would not deter future misconduct.

This landmark case not only delivers justice for Ms. Baker but also establishes an important precedent for future cases against insurance companies. For media inquiries, please contact Amanda Blitz, Director of Marketing at Thomson Rogers Lawyers.