Court of Appeal Upholds Damages for Mental Distress Against Insurer

November 4th, 2011 by

The Ontario Court of appeal in McQueen v. Echelon recently upheld a Jury’s award of $25,000.00 in damages for mental distress arising from the insurer’s improper handling of an insured’s Accident Benefits.

The Court of Appeal confirmed as follows:

…People purchase motor vehicle liability policies to protect themselves from financial and emotional stress and insecurity. An object of such contracts is to secure a psychological benefit that brought the prospect of mental distress upon breach within the reasonable contemplation of the parties at the time the contract was made….Ms. McQueen was entitled to that peace of mind and to damages when she suffered mental distress on breach.

At Devry Smith Frank we carefully consider what the Court of Appeal looks for in a claim for mental distress against an insurer such as: the number of denials, lack of information about reasons for the denials, reliance on inadequate Insurance Examinations, strong evidence of medical need for the benefits and the adversarial approach taken by the insurer in adjusting the file.

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