Deadlines for long-term disability (LTD) claims involve more complexities than many claimants (also known as “insureds”) realize. An initial denial of a claim may or may not trigger the two-year period, called the limitation period. The limitation period is the time in which the insured must file a claim in court. As it turns out, a lawyer who is inexperienced in LTD claims may not correctly advise their client when they should start filing a claim. This issue emerged in the recent Court of Appeal case of Pepper v. Sanmina-Sci Systems (Canada) Inc. (“Pepper”).
In Pepper, the insurer stopped paying the insured’s LTD benefits on November 1, 2007. A few months later, in January 2008, the claimant retained a litigation lawyer to deal with his LTD claim. Despite the two-year limitation period, the lawyer did not start a legal claim for the denial of the LTD benefits until February 2010. The insured’s lawyer argued that the insurer failed to convey a clear denial in November 2007, and therefore, the insured had not “discovered” that he had a claim. As such, according to the insured’s lawyer, the limitation period was not triggered on that date.
However, the Ontario Court of Appeal held that the insured should have started a legal claim in November 2007 when his claim was first denied. The fact that the insurer did not have its internal appeal process meant that that the insured had no other legal recourse to retrieve his LTD benefits but to pursue a claim in court. The Court clarified that the insurer did not have an obligation to advise the insured about the limitation period. Furthermore, since the insured hired a lawyer shortly after the denial of his claim, it would seem that he was aware of the “appropriateness” to commence a claim around that time. The Court further highlighted that the “failure on the part of legal counsel… to recognize November 1, 2007, as the date on which the limitation period commenced is an error in law.”
This ruling is a stark contrast to that in Kassburg v. Sun Life Assurance Company of Canada, in which the Court decided in favour of the insured. Like in Pepper, the insured in Kassburg started a legal claim after more than two years had passed since the denial of the LTD claim. However, the lawyer in Kassburg successfully argued that a legal claim had not been discovered at the time of the denial of the benefits since the insurer allowed for three internal appeal processes without a “clear and unequivocal” initial denial. Moreover, the insured in Kassburg did not retain a lawyer until much later, adding to the argument that he did not “discover” that he had a claim at the time of the denial. Although pursuing a legal claim over two-years after the denial seems to be an uphill battle, the experienced lawyer in Kassburg was able to overcome this obstacle.
The cases above demonstrate the importance of retaining lawyers with extensive experience in disability claims. Generally, the more specialized the lawyer is towards fighting for disability benefits, the more knowledgeable that lawyer will be, and therefore, the more they would be able to navigate the complexities of LTD claims. At Monkhouse Law, we specialize in the litigation of LTD claims and have experience helping clients who pursued claims beyond the limitation period. That said, it is always wise to call a lawyer as soon as your insurer denies your claim to avoid losing out on your benefits like the insured did in Pepper. If you have been denied LTD benefits or have other questions regarding LTD, call us today for a free consultation.