Disability Claims and Civil Procedure Rule 57 (claims under $100,000)
The total value of all past and future claims for disability benefits can be anything but small. While it is well known that a claimant is limited to a judgment for benefit arrears up to the time of trial even if disability is proven, the insurer could potentially face a serial string of lawsuits for disability benefits if the claimant asserts that the disability continues past the trial. Once the amount of all such past and future claims are added together, what once might have seemed notionally small is really quite financially significant.
Nova Scotia Civil Procedure Rule 57 provides for streamlined procedures for claims under $100,000. Among other things, that Rule limits pre-trial disclosure rights, forbids a request for a jury trial and requires parties to exchange witness “will say” statements as part of an expedited litigation process.
Recently, an insurer unsuccessfully sought to have a claim for Section B weekly indemnity benefits removed from the constraints of Rule 57 in the case of Royal & Sun Alliance Insurance Company of Canada v. Raymond¸ 2014 NSCA 13.
The insurer had relied, in part, on a series of cases from the Nova Scotia Supreme Court more than a decade ago in which insurers were successful in having claims for ongoing disability benefits removed from the hands of the Small Claims Court. At that time, there seemed to be an understanding on the part of the judiciary that the lack of pre-trial disclosure and other procedural protections made it inappropriate for ongoing disability claims to proceed in the Small Claims Court. In fact, parties are expressly prohibited from splitting one large claim into many different claims so as to fall within the limited monetary ceiling of the Small Claims Court.
After being unsuccessful with this argument before Justice Gerald P. Moir in the first instance, the insurer appealed to the Nova Scotia Court of Appeal. The unanimous Court held, however, that while the insured person’s total potential claim for weekly indemnity benefits might eventually exceed $100,000 given his significant injuries and his young age, the insurer’s concern about a multiplicity of future proceedings was merely hypothetical. In short, the plaintiff’s claim was permitted to continue under the restraints of Rule 57. In coming to this conclusion, the Court of Appeal distinguished the caselaw pertaining to the Small Claims Court as being inapplicable to claims in the Nova Scotia Supreme Court.
The insurer was rightly concerned about how a finding of disability in the present might impact upon the likely continued claims for weekly indemnity benefits into the future. The Court of Appeal noted that the insurer had raised generic arguments about possible prejudice but only real and specifically tangible concerns about the propriety of a Rule 57 action would support a finding that the claimant’s choice to invoke Rule 57 should be set aside.
Generally speaking, judges do not find generic arguments concerning prejudice to be compelling as opposed to specific complaints that are backed up with supporting evidence. This holds true in cases involving missed limitation periods and also appears to hold true in the above-noted context as well.
Obviously it is a laudable goal to seek limitations on unbridled discovery and other pre-trial procedures that inevitably drive up the cost of litigating a claim. On the other hand, there is a justifiable concern about being unfairly constrained by rules that are expressly designed to simplify and shorten the litigation process.
As the insurer in this case did not advance specific complaints about why a claim for Section B weekly indemnity benefits was too complicated to fit within Rule 57, it is not obvious if there was, in fact, a more focused concern about limited but yet available pre-trial procedures.
That said, an insurer could always consider ways in which the Civil Procedure Rules could be used to side-step the limitations of Rule 57 where it is not confident that it will be successful in having a claim removed from the confines of Rule 57 in the first place.
For example, an insurer could consider bringing a summary judgment motion in order to test a plaintiff’s case. On such motions, parties are required to “put their best foot forward” and thus an insurer might gain valuable insight into the strength of a Plaintiff’s case even in the face of the other limited pre-trial procedures set out in Rule 57.
Another possible tactic would be to attack the comprehensiveness (or otherwise) of the “will say” statements of a claimant’s proposed witnesses at trial. Although there is, as of yet, no decision by a judge in Nova Scotia on this point, the Civil Procedure Rules clearly leave it open to a party to argue that a witness should not be permitted to testify about matters not expressly covered in the “will say” statement.
Finally, Rule 57 does not preclude independent medical examinations. Such examinations can often provide helpful evidence that supports an insurer’s challenge of a disability claim.
All of this is not to say that an insurer might not potentially be successful in convincing a judge to remove a disability claim from Rule 57 if it is demonstrated that justice cannot be done by applying the rule. The insurer’s complaints will, however, have to be significant, specific and substantiated for such an argument to be successful.
If you have any questions about this or any other insurance matter, please feel free to contact a member of our Insurance Law Group.
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