What Every Lawyer Needs to Know about Efforts to Secure Bad Faith Damages at the Trial of an LTD Action

Transcription

1 What Every Lawyer Needs to Know about Efforts to Secure Bad Faith Damages at the Trial of an LTD Action By: Hugh R. Scher & Caroline Schulz Date: February 1, 2013 Scher Law Professional Corporation Barrister & Solicitors 69 Bloor Street East Suite 201 Toronto, ON M4W 1A9 Telephone: Facsimile:

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3 2 What Every Lawyer Needs to Know about Efforts to Secure Bad Faith Damages at the Trial of an LTD Action Preliminary Steps Preparation of a claim for bad faith damages begins at the very commencement of the retainer relationship between the lawyer and the client. It is essential that the lawyer obtain a full and proper history relative both to the nature of the condition, treatment and medical status of the client while at the same time obtaining a full assessment of the complete file of the insurer in respect of adjudication of the claim. This often requires a conscientious effort on the part of the lawyer to compel the insurer to produce any and all relevant documentation, including internal claims memos, medical opinion reports, communications between the insurer and private investigators, independent medical assessors and anyone else engaged in the file. This includes all such reports, tapes, notes and other information. It is also fundamentally important to ensure that you have a full understanding of your client s situation and requests must be made for all relevant information in respect of the client s medical condition and disability benefit claim, but also in respect of other collateral claims that may be engaged such as claims to WSIB benefits, EI benefits, CPP disability benefits, ODSP benefits, IRB benefits, employer pensions, or severance entitlements. The lawyer must also be aware of the client s personal situation by securing full Facebook and social media documents that are certain to be relied upon by the insurer at the time of trial in an effort to discredit and undermine the client. The client should be advised not to engage in social media communications as these are more and more becoming the subject of production orders and often contain a gold mine of information that can be used by insurers, employers, and other third parties to dispute and undermine the claims of the client. Pleadings After conducting a proper intake process, a full assessment of the scope and documentary basis of the claim, it is then imperative to draft an appropriate and comprehensive pleading relative to

4 3 your claim for bad faith. Such a pleading cannot simply assert a bald accusation of bad faith and hope that these issues will be divined at the time of trial. Your statement of claim should as best one can articulate the nature, scope and factual basis for a bad faith claim from the outset. Obviously, it may well be necessary to supplement and amend your claim over time as more and more information becomes known to you about the merits and scope of your bad faith claim. Full familiarity with the terms of the insurance policy at issue and a complete review of its terms should be undertaken before the commencement of legal action. Care must be taken to ensure that the appropriate version of the policy is obtained as policies can be modified by the employer/insurer over the course of time. After all, the duty of good faith and fair dealing is an implied term of the insurance contract itself. As noted by Justice Binnie in Whiten v. Pilot Insurance Co. One of the purposes of a statement of claim is to alert the defendant to the case it has to meet, and if at the end of the day the defendant is surprised by an award against it that is a multiple of what it thought was the amount in issue, there is an obvious unfairness. Moreover, the facts said to justify punitive damages should be pleaded with some particularity. The time-honoured adjectives describing conduct as "harsh, vindictive, reprehensible and malicious" (per McIntyre J. in Vorvis, supra, p. 1108) or their pejorative equivalent, however apt to capture the essence of the remedy, are conclusory rather than explanatory. 1 The use of boilerplate pleadings should be avoided. Courts have been critical of the use of such pleadings in bad faith cases. The use of boilerplate pleadings also suggests that there is not a substantive foundation or basis for a bad faith claim which is not the message one wishes to send either to the insurer or the Court at the outset. Poor pleadings will also limit the scope of discovery and can also impact on claims to litigation privilege. They may also be subject to motions to strike. 1 [2002] S.C.J. No. 19 at para 87 (SCC)

5 4 Courts will be far more inclined to permit amendments to a pleading after discovery to expand the scope of a bad faith claim that is already set out and founded in the pleading as opposed to allowing a fishing expedition to develop such a claim. A proper pleading will typically set out the following: 1. the identity of the parties, including the defendant s capacity as an insurer; 2. particulars of the contract of insurance, including any implied terms (of which the duty of good faith and fair dealing is one); 3. the insured s performance of any conditions precedent under the policy; 4. the facts giving rise to the insurer s liability under the policy; 5. particulars of the insurer s failure to perform; 6. particulars of any benefits owing under the policy; 7. particulars of the insurer s breach of the duty of good faith; 8. the facts giving rise to any additional or alternative theory of liability in tort, if appropriate; 9. particulars of the insurer s tortious conduct, if so alleged; 10. particulars of any pecuniary damages resulting from the insurer s breach of contract or tortious conduct; 11. particulars of any claim for non-pecuniary damages, including damages for mental distress; 12. if claimed, the facts upon which aggravated damages are sought; 13. if claimed, the facts upon which punitive damages are sought. 2 Counsel preparing a statement of defence in a bad faith action must be mindful that their conduct during litigation may be relied upon by the insured as further evidence of bad faith. As such, one must be careful to make proper admissions and appropriate denials of the matters at issue. A limitations defence must be specifically pleaded. It must be remembered that the burden of proof does not rest with the insurer to demonstrate good faith, but rather rests with counsel to show lack of good faith. Insurers must be careful in how they apply the defence of reliance upon the advice of counsel in the context of a bad faith action. This is particularly important as once a challenge to solicitor and client privilege is successfully addressed in the course of the action, it would be difficult, and likely impossible for an insurer to rely upon that solicitor and client privilege relating to issues that arose prior to the breach of privilege, even where the waiver of privilege arises at the time of trial. 2 Insurance Bad Faith The Bad Faith Action at pp

6 5 Production Requirements As noted above, the requirement of full production must be taken seriously. Failure to produce relevant documents to a claim, in the absence of a cogent and reasonable excuse should and will be exploited at trial by counsel for the insured to support a claim of bad faith. Insurers may thus be required to review not only the claim file itself, but also their underwriting files, the adjudicator s files as well as any legal files, personnel files, reserve files or advertisement and promotional files, underwriting manuals and procedures, as well as claims manuals and procedures and training manuals and procedures and any other relevant files. 3 The underwriting file may contain significant relevant information to a bad faith claim including policy documentation, identification about the particular insured, the nature of the risks and the form of coverage at issue. It may also contain documents relating to communications with the insured or an insurance agent relating any number of things. It may also contain manuals on interpretation of policies and procedures concerning the underwriting practices and the interpretation of the coverage obligations and policy provisions of the insurer. The extent to which a plaintiff is entitled to explore the scope of an underwriting file will depend significantly on the scope of the pleadings and the nature of the allegations raised in respect of bad faith. For example, if coverage is denied on the basis of a misrepresentation in the application, then the application form and related documents are relevant and must be produced. The claim file is essential to both parties as it demonstrates exactly how the company processed the claim. As noted by the Court in Samolia v. Prudential of America General Insurance Co. (Canada): Bad faith actions against an insurer, like actions by client against attorney, patient against doctor, can only be proved by showing exactly how the company processed the claim, how thoroughly it was considered and why the company took the action it did. The claims file is a unique contemporaneously prepared history of the company's handling of the claim; in an action such as this the need for the information in the file is not only substantial, but overwhelming. 4 Policy manuals and claims manuals are another significant element of discovery that needs to be explored but can only be explored if proper pleadings permit it. 3 Insurance Bad Faith The Bad Faith Action at pp [2000] O.J. No. 2746, 50 OR (3d) 65 at para 6 (Ont. SCJ)

7 6 One of the most notorious examples of these cases involved the State Farm companies. The insurer s documents revealed a routine practice of requiring adjusters to pay less than book value in 65 per cent of their claims. Once this target was met, the goal was increased to 75 per cent in the following year. The company also had a contest known as pride month to see which adjuster could settle the most claims for less than they were worth. Particularly telling in the litigation against State Farm was an internal directive ordering adjusters to destroy documents related to bad faith claims. 5 Balancing Interests in Production As the conduct of a bad faith action often involves challenging the actions and credibility of one or more persons employed by the insurer, it is often relevant and important to obtain information as to their background and experience. The scope of discovery permitted relative to such investigation will depend on the scope of pleadings. In Canada, the case law is contradictory as to when the Courts will permit production orders relative to employee personnel files. The use of incentive plans by insurers relative to claims adjudicators may also be a relevant consideration in the context of bad faith claims. To the extent that insurers rely upon incentive plans which provide targets and other inducements for claims representatives to dismiss or rescind a claim or policy, in certain instances, such conduct may well be relevant to an assessment of bad faith and could be producible to the extent that the pleadings give rise to a reasonable basis for such claims. Advertising materials relied upon by the insurer may also be relevant in assessing a bad faith claim. To the extent that insurers rely upon such materials as the basis for selling and marketing their reputation and image to the public with respect to claims adjudication and client peace of mind, this can be a factor relied upon to contradict and cast doubt on the credibility of an insurer who engages in bad faith practices. Reference may also be had to other claims when assessing an insurer s record in order to establish a systemic problem in support of a claim of bad faith. Such evidence may well point to the fact that the bad faith conduct in question is not simply an isolated incident, but rather represents a systemic policy and practice with regard to claims adjudication. In those instances, 5 Miller, How Insurance Companies Settle Cases (Santa Ana, Calif: James Publishing, 1990) at para 1501A; Insurance Bad Faith The Bad Faith Action at p. 161

8 7 it would be relevant to a claim of bad faith damages, in particular, punitive damages. Such considerations were a factor laid out by the Supreme Court of Canada in Whiten where the Court acknowledged that a pattern of misconduct is an important matter to take into account in regard to the assessment of punitive damages. This was the case in Clarfield v. Crown Life Insurance Co. 6 Here, the Court took account of the fact that the insurer followed an established course of practice from which the Court found that the insurer needed to be deterred. Obtaining financial information from the insurer may also be a relevant consideration both to a claim of punitive damages but also to the reason as to why the insurer may be denying an otherwise legitimate claim. 7 Insurers will resist the production of such information, particularly where there is no basis for it in the pleadings. They may also assert that such information is public in any event and that the plaintiff can have access to it through the internet or otherwise, in terms of public financial statements. Once again the scope of pleadings will have significant bearing on the likelihood of any production order that may be made by a Court relative to financial information, advertising materials, training manuals or other such file documents. One approach often employed by the Courts to prevent unfairness to the insurer of production of certain information of this kind may be to bifurcate claims of liability and damages. This may prevent reliance upon such information in the context of the liability phase of a trial, but would permit an insured to rely upon it in the context of establishing the quantum of damages. Such an approach was advocated by Justice Binnie in Whiten, for appropriate cases. The scope of privilege is an important consideration that can defeat or bolster a bad faith claim. The Ontario Superior Court in Davies v. American Home Insurance Company 8 sets out the battle lines in respect of competing claims about privilege in the context of a direct attack: The fact that an insurer has sought and obtained a legal opinion for purposes of assessing its liability to respond to an insured's claim, and presumably has considered that opinion in deciding what to do, is not sufficient in and of itself to render the legal opinion producible in litigation - even "bad faith" litigation - at the instance of that insured. The assertion of a bad faith claim for punitive and exemplary damages for breach of the insurer's obligation of good faith may affect the scope 6 [2000] O.J. No. 4074, [2000] I.L.R. I-3895 (Ont. S.C.J.) 7 Insurance Bad Faith The Bad Faith Action at p [2002] O.J. No. 2686, 40 C.C.L.I. (3d) 22 (Ont. Div. Ct.)

9 8 of what is relevant and what is not relevant in the proceedings. However, in my view, the nature of the claim - even a bad faith claim against a "bad" insurer - should not (and in my opinion, does not) change the analysis as to what is or is not protected by solicitor-client privilege and/or litigation privilege. The principles that the courts have enunciated for determining the existence or non-existence of those privileges - and the evidentiary basis necessary to establish them - remain the same. 9 Not all communications between solicitor and client, however, are privileged. As noted in Davies v. American Home Insurance Co. 10 : Certainly, an insurer may not protect investigative information that it has gathered and that would otherwise be producible, behind the cloak of solicitor-client privilege simply by the expedient of placing control of the claim investigation in the hands of its lawyer. The legal opinion rendered by the lawyer to the client based upon the information obtained in the course of that investigation is another matter, however. It remains privileged, in my opinion, unless the insurer puts its state of mind in issue in the sense contemplated in Bank Leu and other related cases, or otherwise waives the privilege. 11 Improper reliance upon medical expert evidence is another factor that can impact a bad faith claim in the LTD context. When the insured s evidence is compared to the factors the insurer took into account in denying the claim it may well become apparent that the insurer failed to conduct an objective evaluation of the claim. Other expert evidence may deal solely with the bad faith claim itself. Expert evidence is not admissible, however, when it consists simply of an opinion that the conduct in question amounts to bad faith. The determination of whether bad faith has been established on the evidence is a matter within the exclusive purview of the court. 12 Oral Discoveries The oral discovery process is another field of information relative to bad faith claims. Careful planning and preparation is essential. Regard must be had for the narrative you wish to explore relative to the bad faith claim, as well as its evidentiary basis. 9 Ibid. at Insurance Bad Faith The Bad Faith Action at p Ibid at Insurance Bad Faith The Bad Faith Action at p. 174

10 9 Efforts should be taken to obtain admissions relative to various documents and actions that support your pleading of bad faith. Exploration of the full scope of the claims adjudication process, including all documentary evidence, potentially privileged documentation, claims memos, medical memos, medical documentation and assessments, are all relevant considerations. You must also carefully look at the other extrinsic documentation referenced above as those documents may also bolster a claim of bad faith, including reference to documents in the various claims, underwriting and other files of the insurer as well as their financial background, incentive plans, personnel, and training manuals and advertising. Careful assessment must be made of efforts to obtain independent medical examinations or surveillance on the part of the insurer and other claim practices. Such conduct itself may demonstrate the elements of bad faith in addition to improper reliance on medical evidence, failure to properly investigate, and preference of one medical opinion over the balance of others. Extensive writing has been done on the effective conduct of discovery examinations in LTD claims and I will not explore in full detail those principles here. Proof of a bad faith claim at trial is largely dependent upon your ability to unearth and demonstrate the indicia of bad faith throughout the process leading up to trial. Below I outline the legal principles of bad faith. Duty of Good Faith An insurer has contractual obligations to an insured and also has an independent obligation to deal with an insured s claim in good faith. The Supreme Court of Canada in Fidler v. Sun Life Assurance Co. of Canada 13 stated the legal standard to which insurers are held is correctly described by O Connor J.A. in Ontario Inc. v. Non-Marine Underwriters of Lloyd's London, England 14 at para. 29: The duty of good faith also requires an insurer to deal with its insured's claim fairly. The duty to act fairly applies both to the manner in which the insurer investigates and assesses the claim and 13 (2006) 2 S.C.R.3 14 (2000), 184 D.L.R. (4th) 687 (Ont. C.A.) at para. 29

11 10 to the decision whether or not to pay the claim. In making a decision whether to refuse payment of a claim from its insured, an insurer must assess the merits of the claim in a balanced and reasonable manner. It must not deny coverage or delay payment in order to take advantage of the insured's economic vulnerability or to gain bargaining leverage in negotiating a settlement. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy. This duty of fairness, however, does not require that an insurer necessarily be correct in making a decision to dispute its obligation to pay a claim. Mere denial of a claim that ultimately succeeds is not, in itself, an act of bad faith. In Fidler v. Sun Life Assurance Co. of Canada, the Supreme Court found that the insurer had not breached its duty of good faith as the denial was based on the insurer s genuine doubt as to whether the insured was disabled from working and upheld the trial judge s decision. In Fidler, the Court did find that the insurer s conduct did cause mental distress and awarded damages accordingly. In assessing whether an insurer has met its duty of good faith, courts will look at the conduct of the insurer throughout the claims process and consider whether the insurer has met the following duties 15 : a) Duty to assess the evidence in a balanced and reasonable manner As part of their duty of good faith to their insured, insurers have a duty to assess an insured s claim in a balanced and reasonable manner and to act fairly in dealing with it. Courts have found that an insurer s reliance on selective medical documentation or disregard of evidence not in alignment with the interest of the insurer amounts to bad faith conduct. In Asselstine v. Manufacturers Life Insurance Co., 2005 BCCA 292, [2005] B.C.J. No. 1152, 2005 CarswellBC 1226 (B.C. C.A.), the Court found that the insurer breached its duty of good faith to Ms. Asselstine in denying her claim for long-term disability benefits despite clear evidence in support of her claim. The insurer relied on the opinion of the plaintiff's original treating physician that the plaintiff could work with accommodations. The insurer maintained this position in the face of several internal appeals, and despite additional medical evidence provided by the plaintiff. 15 Brenda J. Lutz, Q.C. The Duty of Good Faith. 9 th Annual Conference on Litigating Disability Insurance Claims: Effective Strategies for Successfully Litigating or Defending Claims. October 27-28, 2008; Gordon G. Hilliker, Insurance Bad Faith Second Edition, LexisNexis Canada Inc. 2009

12 11 The claims adjudicator s relied on the opinion of one specialist while disregarding the views of two other specialists and failed to obtain proper information from Ms. Asselstine. Further, the adjudicator requested and obtained a report regarding the claimant s employability based on selective information provided by the adjudicator. The adjudicator then relied on the flawed occupational report in rejecting the claim. The trial judge found that the insurer had failed to assess Ms. Asseslstine s claim in a balanced and reasonable manner and failed to act fairly in dealing with it and that such conduct amounted to bad faith administration of the claim. The court awarded $50,000 in punitive damages and $35,000 in aggravated damages. The Court of Appeal affirmed the decision. b) Duty to interpret the policy reasonably An insurer s decision to refuse payment should be based on a reasonable interpretation of its obligations under the policy. In Johnston v. Alberta School Employee Benefit Plan (Trustee of) (1995), 172 A.R. 123, 1995 CarswellAlta 231, [1995] A.J. No. 605 (Alta. Q.B.), the plaintiff was forced to stop working as a teacher as a result of her type 1 diabetes and severe hypoglycaemia related to anxiety and stress. Her physicians agreed that she could only work under strict conditions. She was able to work part-time for her husband's business. The LTD Plan required the plaintiff to prove that she was "unable to perform the duties of any occupation for which [she] is or may become suited by reason of education, training or experience" (para. 41). The insurer took the position that the plaintiff was not eligible for disability benefits as she did not meet the definition of total disability as defined under the policy. Mason J. said, at para. 43: Total disability" defined in terms of "any occupation" or even "any reasonable occupation" interpreted literally or in the strict sense leads to an absurdity. Such interpretation effectively nullifies coverage under the policy unless an insured establishes he or she has been rendered almost helpless. The rules of interpretation and construction of contracts in insurance law require the definition of "total disability" be interpreted within the context of the coverage provided by the insurance plan. Contracts of insurance are contracts of utmost good faith on the part of both parties. This imports principles of fairness for both the insured and the insurer when interpreting disputed provisions in an insurance policy by having regard to the nature, extent and purpose of the insurance coverage provided...

13 12 In Clarfield v. Crown Life Insurance Co. 16, the insurer denied the plaintiff s claim for residual benefits because he was earning no income in the year prior to his claim and therefore had no income loss at the time he made his claim. The court found that the insurer had given the policy an unreasonable interpretation. The policy provided a formula for determining an insured s prior earnings and entitlement to residual benefits. Further, the insurer did not render a decision on the claim in a timely manner despite having medical evidence in support of the claimant s total disability; failed to provide the insured with reasons for its denial of the claim; and made the insured sign a letter agreeing to specific terms as a condition of receiving the disability payments. The court awarded punitive damages of $200,000 and aggravated damages of $75,000. c) Duty to adequately investigate The duty of good faith and fair dealing requires that a denial of benefits be based upon a reasonable investigation and evaluation of the circumstances of the loss. As stated by Gordon G. Hilliker in Insurance Bad Faith Second Edition, LexisNexis Canada Inc at page 48: The insurer s role is not to look for a putative basis to deny the claim, and, having found one, to then abandon the investigation and leave it to the insured to present evidence to the contrary. A one-sided investigation does not satisfy the requirement of good faith and fair dealing. Instead, the insurer must fairly consider all of the evidence. This requires the insurer to initiate a reasonable investigation at the outset and to refrain from reaching a conclusion to deny coverage until the basis for the denial has been fairly investigated. In Evans v. Crown Life Insurance Co. 17, the insured received disability benefits under his disability insurance policy for a period of over four years before being abruptly terminated by the insurer. The insured s treating physician had provided periodic medical documentation in support of the insured s claim. The insurer provided no explanation for its sudden denial of benefits and indicated simply that a review of the insured s file with the insurer s medical director indicated that the insured was able to work. The court noted that the insurer made no attempt to contact the insured, her treating physicians or her employer for an explanation of her disability. The insured was not requested to submit to an independent medical examination nor CarswellOnt 3822 (Ont.S.C.J.) CarswellBC 1400

14 13 was there a review of her file by a rehabilitation specialist. The court awarded $20,000 in aggravated damages. In Inglis v. Nova Scotia Public Service Long Term Disability Plan Trust Fund 18 the insurer was found not to have acted in bad faith in wrongfully denying disability benefits to an insured. The insurer made mistakes in adjudicating the insured s claim however, the court found that the insurer s conduct did not rise to the level of bad faith. Conflicting medical evidence from the insured s treating physicians had provided a reasonable basis upon which coverage was originally denied. In McDonald v. Insurance Corp. of British Columbia 19 the court determined that the insurer breached its duty of good faith by failing to conduct a reasonably thorough investigation. The court determined the insurer was too ready to assert policy breaches on flimsy grounds. The insurer failed to contact relevant witnesses and placed undue emphasis on evidence that aligned with the insurer s interests. The court awarded punitive damages of $75,000. d) Duty to inform An insurer who fails to properly advise the insured of the available policy benefits or fails to provide adequate assistance with completing the claims documentation may be in breach of the duty of good faith and fair dealing. 20 In Clarfield v. Crown Life Insurance Co. 21 the insurer denied the insured s benefits without providing a reason for the denial and did not advise the insured who suffered from a mental disorder of his entitlement to residual disability benefits. The Court found the insurer s conduct amounted to bad faith and noted that the insurer s failure to inform the insured of its decision was significant because an insured who is not given notice of an adverse decision cannot contest it. In Atchison v. Manufacturers Life Insurance Co. 22 the insurer s failure to advise the insured s beneficiary of the insured s life insurance and application for excess coverage and the insurer s refusal to provide the beneficiary with the policy upon request constituted bad faith conduct. In CarsweeNS CarswellBC 652 (BCSC) 20 Gordon G. Hilliker, Insurance Bad Faith Second Edition, LexisNexis Canada Inc CarswellOnt 3822 (Ont.S.C.J.) CarswellAlta 1685 (Alta. Q.B.)

15 14 the circumstances, the court held that the insurer s unconscionable conduct amounted to a fraudulent concealment of the cause of action so as to postpone the running of the limitation period. Principles applied at Trial The conduct of a trial is most significant in terms of one s ability to demonstrate a bad faith claim. Effective cross-examination of expert witnesses of the insurer is essential as well as effective assessment of the claims adjudication process, including through significant crossexamination of claims representatives and medical personnel. Such preparation includes review of the personnel documentation of claims representatives, financial history and incentive plans of the insurance company as well as their marketing and policy manuals for adjudication of a claim. Also required is careful assessment of the medical credentials of the medical witnesses relied upon by the insurer and any writings they have prepared, their past performance in other Court hearings as assessed by the Court. Counsel must be prepared to confront the witnesses with each of these factors as well as their particular assessments and opinions rendered with regard to the claim at issue. The first rule of success for cross-examination in a bad faith action, or any action is preparation. The second and third rules of success are preparation and preparation. One cannot expect to divine profound wisdom in the course of one s cross-examination. One must plant the seeds for that divine wisdom to sprout before the cross-examination ever begins. Where there is a significant bad faith claim, plaintiffs will be put to a choice of selecting a trial by judge or by jury. One might believe that a carefully reasoned and analyzed assessment of the issue of bad faith by a trained judicial officer would carry more weight than a determination made by lay people without any rationale provided. The Courts have nevertheless held that it is much harder to overturn a jury verdict than it is to undermine the findings and reasons of a trial judge in respect of a bad faith claim. As to whether to select trial by judge or jury, it often depends on the nature of the claim itself. One must assess whether your client is likely to be sympathetic in the eyes of a jury or whether

16 15 their particular situation would be viewed as laziness, or seeking to win a lottery without working for it. How your client and the insurer will be perceived is fundamental to the determination of whether to proceed by judge or jury. Judges are trained to assess credibility while at the same time differentiating between and applying discreet legal principles. Juries have no such training and may be influenced by their own life experiences relative to the matters at issue. For example, I am often worried about bringing claims before a jury in cases of chronic fatigue syndrome, fibromyalgia or depression or other such invisible disabilities where there is a serious risk that juries may question the veracity of the plaintiff s claims or their severity. This is an unfortunate stigma associated with mental health and other invisible disabilities by the Courts and by lay people in society at large. Conclusion Successful advocacy in bad faith litigation depends entirely on preparation, planning, and tenacity. The process begins from the outset of your initial retainer meeting with the client and goes through to the final address to the judge or jury. In between, there will be multiple battles in the course of what is generally perceived as a war of wills to win the hearts and minds of the trier of fact. Your ability to put forward a compelling narrative backed up by concrete facts and evidence will ultimately impact your prospect of success on the claim. Your ability to portray your client in a sympathetic light in the eyes of the jury and to portray the insurer as the wrongdoer, as engaged in dishonest tactics to defeat your client s legitimate interests, is fundamental to success in a bad faith claim. Such claims are not for the faint of heart. You must be mindful of the economic advantage that the insurer carries by virtue of their vast resources. You must be prepared for a war and not simply a battle. There will be numerous battles over the course of your action and you likely will not win them all. It is important to assess with your client and yourself your capability, your

17 16 capacity and stomach to enter on to the battlefield and your ability to sustain the fight throughout the duration of the war which may well include numerous motions, a lengthy trial and appeals before you are able to secure any funds for you or your client. Having said that, the establishment of a successful bad faith action is one of the most satisfying victories one can accomplish as a lawyer and is central to the principles that should guide all good plaintiff lawyers in their task of diligently representing the best interests of their client with fierce determination, strong ethics and the willingness to fight to right the wrong. * Hugh Scher is a Toronto lawyer who practices civil litigation, labour, employment and human rights law with a focus on complex terminations of employees, disability insurance claims, CPP claims and workplace accommodation and harassment disputes, particularly for individuals with chronic pain, chronic fatigue and fibromyalgia and depression. He was counsel in the landmark case of Keays v. Honda where he obtained the largest employment trial award of punitive damages in Canadian history and argued the case up to the Supreme Court of Canada. He also has an extensive appellate advocacy practice including at the Ontario Court of Appeal, Federal Court of Appeal, BC Court of Appeal Court of Canada. and Supreme *Caroline Schulz is a Toronto lawyer who practices labour, employment and human rights law on behalf of both employers and employees with a focus on complex terminations of employees, disability insurance claims and workplace accommodation and harassment disputes. Scher Law Professional Corporation Barristers & Solicitors Suite 210, 69 Bloor Street East Toronto, Ontario, Canada, M4W 1A9 Telephone (416) Facsimile (416) hugh@sdlaw.ca