We must admit, long term disability cases can be very strange. Liability and calculating damages is not straight forward like in a dog bite or car accident case. The reason for that is long term disability cases are contractual in nature. That means that they are based upon, and defined by your long term disability contract.
This long term disability contract can be under a group benefits plan, or an individual policy of insurance.
Either way, chances are you haven’t taken the time to read the entirely of your long term disability contract because the majority of people (who aren’t lawyers or insurance professionals) simply don’t. Why curl up with a good book when you can read over your long term disability contract right?
Determining liability in a dog bite case is easy. Bad dog bites innocent passerby and causes damages. Liability has been established and now we can move along to damages.
Calculating damages in a dog bite case is easy as well. What are the injuries; look up similar fact case law and damage awards and then process those figures. Factor in the person’s age, education, employment, and how the injuries impact their daily lives along with any past/future care needs.
It’s not so easy when it comes to long term disability claims. Every contract is different, every disability is different as well. There are lots of terms and conditions contained in the long term disability policies our lawyers have seen which are real head scratchers for our clients.
Here are a few of those clauses which tend to confuse long term disability claimants.
Why do Long Term Disability Insurers insist that you apply for Canada Pension Plan Disability (CCPD) benefits as soon as possible? They will even go as far as setting you up with a paralegal, or an insurance professional to help you complete the application. Why?
The reason for this is under every Long Term Disability policy we have seen, the insurer is entitled to a dollar for dollar set off from any disability benefits which come in from different sources. So, if you are awarded $880/month from CPP Disability, the long term disability insurer is entitled to an $880/month credit which is deducted from your long term disability benefit. The more CPP Disability benefits you are awarded, the more the long term disability insurer saves. They do it not because they like you. They do it because they like to save money. And they like to save money more than they like you.
Why do Long Term Disability Insurers want me sign all of these Consent and Release Forms? In some cases, they simply want to gather your employment, hospital, medical and tax information. In other cases, I believe they simply want to bombard you with paperwork to make you feel uncomfortable. But there is one form which can catch you for a real loop. And this form often gets lost in the shuffle with other consent forms.
This form is referred to as a “Request to Deduct and Pay a One Time Retroactive Payment to an Insurer” form along with an “Irrevocable Consent to Deduct and Pay and Insurer” How’s that for a mouthful?!?! These forms are generated by Service Canada and you would NOT know about them unless they were presented to you by an insurer because at the end of the day, these forms are designed to protect an insurer’s interests and not yours.
By signing these forms, you are consenting for Service Canada to pay an insurer directly an amount payable in retroactive CPP Benefits directly to your long term disability insurer. You don’t know how much is going to be paid. You are leaving that entirely up to Service Canada in conjunction with the insurer’s calculations sent to Service Canada. That means before you see a dime in disability benefits, the insurer MAY get paid before you do out of the proceeds of your own CPP Disability benefits. By signing these forms, you are relinquishing all control of the payment of the CPP Disability Benefits to Service Canada. Few people read these forms before signing and most are under the misconception that you MUST sign the forms.
It clearly states on the forms that if you don’t consent, you need not sign. Service Canada will send you the entire payment directly, and then it will be up to you to repay the insurer the amount owing (if any). Should you opt to sign the forms, Service Canada will pay the insurer directly and you need not worry about any repayment obligation. The problem with signing for many is that it’s unsettling when giving up authority to your benefits, without knowing how much in benefits you are giving up. If there is a dispute in the amount being paid to the insurer, you are left with little to no recourse to get that money back other than by way of retaining a personal injury lawyer. Disputes in quantum can arise and when they do, you want some say in terms of how much money is owed.
What we don’t like to see are insurance adjusters pushing throats down disability claimants’ throats and coercing them to sign forms which don’t have their best interest in mind or which they simply don’t understand. When an unsophisticated disability claimant who is NOT WORKING, and relying on a monthly disability income to make ends meet is presented with a form form their insurer which they are told that they are required to sign “or else“; that sort of pressure isn’t right. It’s a situation whereby innocent disability claimants are being taken advantage of to sign forms which are never properly explained to them and which they don’t understand. Quite frankly, you need to be a lawyer or need a lawyer present in order to properly understand what these forms are about and the consequences of signing. Service Canada should also do a better job at pushing disability claimants to get legal advice before signing such forms, just like we saw at the past in dealing with accident benefit settlements at the Financial Services Commission of Ontario.