Insurance Company Loses Landmark F.M. Case in Chilliwack, B.C.

(Lawyer's Weekly, May 26, 1995) In 1995, the Great West Life Assurance Company was ordered to repay two years' disability benefits and $10,000 aggravated damages. The man had been forced by Great West Life to pay for all medical reports. The judge said "This took food from the table". This is the first bad-faith judgement against a disability insurer in B.C. $10,000 was the largest punitive (aggravated damages) fine in a bad-faith case. According to an internal Great West memo, one reason for refusing payment of disability benefits was that the company did not want to set a precedent for a similar claim, also from B.C. Great West had hired a private investigator, who took videos of the man working on his car. The judge discounted this evidence because the man had to sell the car to live, and "the plaintiff was bedridden with pain following these activities." Shortly before the trial, Great West agreed to pay the benefits up to that date. The judge also said "However, the defendant exhibited such a resolute and unreasonable determination to deny the plaintiff's benefits under the policy in the face of overwhelming medical and other reports, consistently reporting the plaintiff to be in fact disabled, that I have concluded the defendant failed in its duty to the plaintiff to act in good faith".