LTD Benefits Claims Part One: Do IME Physicians Hired by the Insurer Owe a Duty to the Insured?
In this six-part series we will be discussing some of the major court decisions regarding long-term disability benefits from across Canada in 2020. The first, Sansome v Rubens, 2020 NLSC 157, discusses the duty that an independent medical examiner hired by a disability insurer owes to the insured.
In Sansome v Rubens, 2020 NLSC 157, the Plaintiff was denied long term disability benefits and then unsuccessfully internally appealed that decision with the insurer several times before commencing his LTD claim. During the internal appeal process, the insurer asked the Plaintiff to attend for a psychological IME but when the Plaintiff failed to attend the appointment, it was decided to proceed with a paper only review. The resulting report was not favorable to the Plaintiff.
The Plaintiff ended up settling his disability claim with the insurer. Oddly, though, the Plaintiff in any event of the settlement, brought an action against the IME physician for breaching a duty of care owed to the Plaintiff for conducting the paper only review without his knowledge, and without an up-to-date and complete medical record. The action went to Summary Trial and the Judge agreed that a duty of care existed and was breached. The Court of Appeal upheld the finding of a breach of duty of care to the Plaintiff but found that causation had not been appropriately addressed at summary trial and thus the Court of Appeal remitted the action back to the trial Judge.
The Court of Appeal’s decision is a substantial warning to insurers and physicians conducting paper-only IMEs or medical consultations. The Court found that such paper-based reviews will give rise to a duty of care when the doctor’s actions have the “potential” to affect the patient’s interests. Further, and more importantly, the Court found that paper-only IMEs conducted for the purpose of evaluating insurance claims will always inherently affect the interests of the claimant patient. This last finding puts a heavy onus on medical consultants providing paper reviews to ensure that they have all the necessary information upon which to base their opinion prior to rendering it.
Upon a rehearing on the issue of causation, the trial Judge found that the emotional and financial losses suffered by the Plaintiff had already taken place at the time of the breach and, as a result, the Plaintiff failed on causation. In effect, the Court found that no compensable loss could be causally attributed to the breach.
It remains open for subsequent Plaintiffs prove causation on the facts of their case.