Toronto, Canada (PressExposure) July 28, 2009 -- I have been asked to discuss the topic of Coombe v. Constitution - Dead or Alive? There are a number of perspectives to this series of cases from which to consider that question.
For the uninitiated, Mr. Coombs and Constitution have been litigating entitlement to weekly income benefits arising from a motorcycle accident in June, 1974, since 1976. The amount in dispute is a weekly benefit in the amount of $70. I won't continue with the history of the litigation but will instead move on to the substantive question behind whether this case is "dead or alive".
Does a declaration of entitlement to weekly or periodic benefit payments bring the matter to a close? Coombs has answered this with a resounding no.
In litigation arising out of Long Term Disability contracts ("LTD") or Statutory Accident Benefits disputes in automobile accidents, courts have declined to order or award a lump sum amount in lieu of the declaration of ongoing entitlement (with a discount for present value calculations of future entitlements, reduced by relevant contingencies, such as prospects for future employment, life expectancy, and other factors). The courts have just not seen fit to cross the line into the murky area of substituting their judgment, for the ongoing scrutiny of insurance companies. The basis for denying the lump sum award appears to be the constraints of the LTD contract, or legislation providing for disability and other benefits. Payments are only due for so long as the claimant can establish varying degrees of disability, although most of the litigation focuses on permanent, total or partial disability.
Recent case law indicates that Coombs is very still very much alive.1 The cases noted here all have upheld the concept that only declaratory relief is available with respect to future disability benefit payments. In Richardson v. Great-West Life,2 Justice Holmes stated the following at paragraph 29:
Counsel for the plaintiff argued that the plaintiff should be entitled to terminate the L.T. contract of insurance and receive as damages the present day value of the plaintiff's future benefits to age 65. I agree with representations made on behalf of the defendant, however, that where as here there is some uncertainty as to the permanence of the plaintiff's disabilities and the policy allows the insurer to require the plaintiff to submit to ongoing physical examinations as well as for offsets with regard to receipt of other benefits, a lump sum award for future benefits would not be appropriate. Nevertheless, the plaintiff is entitled to a declaration directing the defendant to pay the plaintiff continuing monthly benefits after April 15, 1996, until such time as she reaches the age of 65 years or dies or is no longer totally disabled within the provisions of the L.T. policy.
While damages in lieu of a declaration may not always be preferable, the possibility of such an award would certainly add a strong weapon to the plaintiff's arsenal. On the basis of the Richardson case, the court has opened a very small window of opportunity in cases where there is certainty as to the permanence of the plaintiff's disability. Tendering evidence with this type of standard may prove to be fruitless in the realm of establishing entitlement to a lump sum award, but it seems to be all that we've got, or is it?
Some of these same recent cases may assist in putting forth more forceful arguments for a lump sum award in the future. Where the plaintiff has had their benefits terminated and has suffered significant mental stress, financial uncertainty and general hopelessness, an argument can be advanced that what is needed is an end to the relationship between plaintiff and defendant insurer.