Civil Litigation, The Profession

OCA's long-term disability ruling alters limits

By Rob Lamberti, Contributor

A recent Ontario Court of Appeal (OCA) ruling raises the possibility of an injured worker claiming long-term disability (LTD) after leaving the job, says Toronto arbitrator and mediator Victoria Romero.

Romero, principal of the mediation and law firm VR Law, tells she expects insurance companies to take the ruling into account and reword policies to close the legal loophole.

The ruling by Justice Jean L. MacFarland on behalf of the three-judge panel found the employee was able to claim LTD five years after he left the company. The ruling in part relied on s. 5 of the Limitations Act, where the appellant "could not reasonably have appreciated he had a cause of action" until five years later. It was at that point he understood the severity of his injuries.

"This allows a person to continue to receive long-term disability benefits even after he leaves work," Romero says. "I think this is why the case is important."

The plaintiff, who held a senior position in the company, suffered serious head and back injuries during a work-related event in 2005 and returned to work after a few months of convalescence. He continued to work for the company until 2008 until he left. He began working for another company but the second firm let the plaintiff go in 2009 and that's when he realized the extent of his injuries, the OCA decision states.

The plaintiff filed an insurance claim with the second company but was denied because the injury wasn't related to work at that firm. He filed a claim with the other company in 2010 but was denied because it was five years after the injury.

"One of the main points of this case is the insurance policy said coverage ends when employment ends," Romero says. But that's not what the court found. She says the ruling determined termination of coverage deals with future claims, not only those that arose during the course of employment.

"Obviously if the injury occurs during the course of their employment, in their view, that policy provides coverage," Romero says. "If he was injured after he left that company, he wouldn't be covered.

"In this case, I find the judgment to be so very unique because the court started the clock not from the time he was working with the company but from the time after he worked at the other company when he became aware of the severity of his injuries," she says.

The ruling also says the plaintiff will receive a monthly benefit if the disability continues, she says.

"Another point that is important is that the judges say there is not any type of exclusion in the policy" because there is no language that says the coverage terminates when the employee stops working, Romero says.

The court ruled the policy didn't include "the type of exclusionary language that terminates coverage for undiscovered disability claims the employee had and that originated during their employment when their employment ceases. To so conclude would leave former employees, like the appellant, in the untenable position of having no disability coverage from either their former employer or any new employer. Such a result would be contrary to the very purpose of disability insurance and the plain meaning of the coverage provision," MacFarland wrote.

Romero says the "only conclusion we can draw here" is that the policy covers an employee if an injury occurred during employment, despite the worker leaving the firm and working for someone else.

"The court found that would be the fair thing to do," she says.

Romero says the plaintiff told the court he only discovered that the severity of his brain injury would prevent him from working in the future from discussions with the staff of the second company in 2009.

"The court saw the plaintiff did not appreciate how severe his disability was, that he tried to get better, he quit the first company because he was frustrated he couldn't do as much and then he went to the second firm," she says.

"Only then, after pushing himself to do his best, he got fired and then he became aware how severe his brain injury was," Romero says. "And that was taken into consideration" by the court.

"The Court of Appeal looked at it from beyond the employment period and reviewed it from when the injury occurred and when the employee appreciated the issue and ensured it applied the principles of fairness," she says.

Romero says she sees the ruling as precedent-setting for Ontario. "I think employees should be aware of this case because it allows them to file a claim," she says.

But she predicts insurance companies will cite the ruling to change the language in their policies.

"Insurance companies will obviously look closely at this case to make sure they are clearer in term of the language of their policies," Romero says. "They're going to look at the language in their policies and try to define in a clearer way the periods of coverage, the periods of discoverability and when a person has a right to apply."

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