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“Getting to Yes” in a Long Term Disability Case

Determining how much your case is worth in a Long Term Disability Case can be a bit of a weird science. But, there is a method to what many perceive as madness.

Plaintiff side personal injury lawyers would LOVE for your number to be accepted by the long term disability insurer.

Wouldn’t it be great if coming up to a number in a long term disability case was as easy as imagining the highest number in your head, spitting it out, and then the case is settled.

This would be your personal injury lawyer’s dream. The client gets what s/he wants. That number is very high. The lawyer feels great for having achieved such a significant recovery on behalf of his/her client.

Long term disability cases are not cases for pain and suffering. Nobody from the long term disability insurer committed an actionable wrong which led directly to your disability. Meaning, no one from the long term disability insurer ran you over with their car resulting in your disability (unless this actually really happened). For the most part, the disability has little to do with the action(s) of the insurer, and vice versa. While the decision of the insurer to deny, or terminate benefits will likely cause emotional stress and financial duress; it has little to do with the onset of the actual disability giving rise to the claim in the first place.

When we assess the values of long term disability cases, we have to look at a number of objective factors which personal injury lawyers, insurers, judges and juries need to look to. These objective factors are concrete facts which don’t sway one way or another.

What is the age of the Plaintiff?

How much was the Plaintiff earning prior to his/her disability?

What is the monthly long term disability benefit owing of the Plaintiff?

When do the payments of long term disability benefits begin?

When do the payments of long term disability benefits end?

Is the long term disability benefit taxable, or not?

Is the long term disability benefit subject to a cost of living allowance?

What are the applicable set offs to the long term disability benefit, and by how much is the long term disability benefit reduced (if any) by these set offs?

Did the Plaintiff return to work over any period of time, and what was the duration of that return to work?

Is there an applicable means test for the Plaintiff’s disability?

Does the Plaintiff’s disability fall within, or outside any pre-existing condition exclusions under the long term disability policy?

Chances are if your personal injury lawyer along with the lawyer for the long term disability insurer can get on the same page with respect to these questions, your case will settle. The reason for this is that once these questions are answered, the parties will be comparing apples to apples as oppose to apples vs. oranges. Everyone will have a shared understanding of the size and limitations of the case so that the parties can move forward in lockstep.

While there will certainly be differences of opinions on certain issues which are more subjective in nature such as the severity of the disability, the Plaintiff’s ability (or lack thereof) to return to gainful employment along with the duration of the disability; the lawyers on both sides will have a shared and common ground from which to negotiate from. Answering these questions will set parameters on the case to make the case more manageable for the parties to resolve.

When the parties to a long term disability case cannot agree on the above noted questions, it will lead to a lot of friction during negotiations. Reason being is that the the parties won’t be using common variables in order to calculate damages.

Take the case where the Plaintiff believes that the monthly long term disability benefit is $4,000/month and 15 months of past benefits are owing, along with future benefits of 100 months.

Contrast that the with Defendant position that the monthly long term disability benefit is $2,000/month with just 5 months owing, along with future benefits of 25 months.

The parties are more than 100% apart on their initial valuations of the case. This doesn’t take in to consideration any disagreement on the severity of disability or whether or not the Plaintiff actually meets the definition of disability in the past or on a go forward basis.linkedin-2-300x300

Going in to any settlement meeting, negotiation, or mediation, these questions need to be sorted out in order to bring the parties together. Often prior to long term disability mediations, the parties can sort out these questions between counsel, state their positions in their respective mediation briefs, or even have the lawyers chat before the mediation begins to narrow these issues. You don’t want to spend the entire day arguing about the quantum of the long term disability benefit instead of negotiating a settlement on the entirety of the case itself. These issues can, and should be taken care of prior to mediation and discussing settlement.

Understanding what a case’s floor (minimum) and ceiling (maximum) is should be important to any plaintiff in a long term disability case. Some plaintiffs make these calculations on their own and set unreasonable expectations for their case because their calculations are wrong. The main reason that their calculations are wrong is because they fail to take in to consideration any set offs to the monthly long term disability amount; and fails to apply a present value discount on future benefits. The biggest set off to monthly long term disability benefits which we see is the credit granted to the insurer for receiving CPP Disability Benefits. Even in cases where the Plaintiff has applied for, but not yet received CPP Disability Benefits, the insurer will seek the credit. A Plaintiff will have a hard time making the case that they qualify for disability benefits under their long term disability benefits policy, but that they do NOT qualify for CPP Disability benefits. It’s akin to sucking and blowing. You can’t say that you’re disabled under one policy, but not disabled under another. Granted the tests are similar, but aren’t the same. However in the vast majority of cases, the tests are so similar that you can’t have one without the other.

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