For the average disability lawyer in Canada, 2017 is turning out to be a year of major court decisions based on two recent cases in British Columbia and Nova Scotia. Both cases deal with litigation issues related to disability insurance; one sets an important precedent in terms of indemnification for legal expenses accrued while the other is related to future disability benefits that an individual may claim after a motor vehicle accident.

Tibbetts v. Murphy and CPP Disability Benefits

In early May, the Nova Scotia Court of Appeals ruled that benefits from the Canada Pension Plan as they relate to disabilities are deductible from auto accident court awards. The gist of the court’s decision is that individuals should not be overcompensated after a motor vehicle accident that results in diminished earning capacity; if a plaintiff receives a monetary award after an accident, the proceeds can be deducted from future CPP disability benefits.

Let’s say a Halifax truck driver suffers an accident that allows her to draw CPP disability benefits; if she is not able to drive due to her injuries and she receives a monetary award after filing a liability lawsuit, the amount of the compensation could be deducted from future benefits received from the CPP.

Tanious v. The Empire Life Insurance Company: Indemnification for Legal Expenses

In April, the British Columbia Supreme Court issued a decision that provides for awards to fully cover the expenses of a plaintiff who files a lawsuit related to disability insurance. In this case, the plaintiff suffered from multiple sclerosis and chronic pain that prompted her doctor to recommend against her continued employment. To learn more, please visit Anu Blog for additional information, resources and references.

The plaintiff was terminated from her job and would later be declined for long-term disability benefits by the Empire Life Insurance Company; for this reason, she filed a lawsuit that not only succeeded in honoring her disability claim but also resulted in a court order issued to the insurance company for the purpose of paying benefits retroactively to the date of the original claim.

As to the indemnification of the plaintiff’s legal expenses, the court ruled that disability claims are different from other torts in the sense that these are cases that require special handling. Whether the plaintiff prevails in the lawsuit or not is immaterial; the legal costs incurred deprived a disabled person from enjoying benefits.

The two cases mentioned herein suggest that 2017 is going to be momentous for Canadian legal professionals who specialize in disability insurance claims. Aside from important court decisions, there are proposed amendments to the Canadians With Disabilities Act, and the changes are expected to focus on issues related to employment such as making workplaces accessible and creating programs to give people with disabilities more job opportunities.

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