Baker v. Blue Cross Life Insurance Company of Canada – Court of Appeal Decision

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The Ontario Court of Appeal recently upheld a trial decision that resulted in a huge win for the plaintiff, including $1,500,000 in punitive damages, more than $220,000 for past long term disability benefits owing to her, $40,000 in aggravated damages for mental distress, plus reinstatement of LTD benefits.

The trial outcome got even worse for Blue Cross when the judge ordered it to pay legal expenses of more than $1,000,000.  

I originally wrote about this case here: Long Term Disability Insurance Company Must Pay Punitive Damages, and again regarding costs, here: Baker V. Blue Cross Life Insurance Company Of Canada – Costs Award

The Court of Appeal Decision

The Ontario Court of Appeal upheld the trial decision, including the largest ever punitive damages award in a long term disability insurance case.  Ontario’s highest court cited several examples Blue Cross’ conduct that justified an award of punitive damages, including:

  • It stopped payment of benefits on three separate occasions, each time denying first and asking for more information later
  • It relied on opinions from contracted medical practitioners when it knew, or ought to have known, those opinions were incorrect
  • It selectively relied on evidence that supported denial, while ignoring conflicting medical evidence
  • It delayed obtaining an independent medical exam despite the conflicting medical evidence
  • It distorted the medical evidence
  • It misinterpreted a Transferable Skills Analysis report in a way that supported denial of long term disability benefits

The decision is essential reading for long term disability lawyers, claims examiners, insurance company executives, and anyone else with an interest in insurance law.  Some of the more noteworthy portions of the decision include:

Overall, we see repeated instances of the Blue Cross team ignoring information, misinterpreting experts’ reports, and relying on the ill-informed advice of their contracted doctors to deny benefits. In effect, they created a closed loop of information that ignored contrary information and created a counter-narrative based on their misinterpretation of the relevant data. This is a pattern of misconduct that, at best, shows reckless indifference to its duty to consider the respondent’s claim in good faith and conduct a good faith investigation, and at worst, demonstrates a deliberate strategy to wrongfully deny her benefits, regardless of the evidence that demonstrated an entitlement.

And regarding $1,500,000 being reasonable:

Another point worth emphasizing is that there was ample evidence for the jury to conclude that the problems within Blue Cross are systemic. This was not a case of a rogue disability claim examiner. The many Blue Cross employees who touched this file took the same approach, which ignored the respondent’s rights under the policy. This evidence suggests that there may be many other claimants that may have been treated in the same manner by Blue Cross. The difference is that, unlike Ms. Baker, most claimants do not have the stamina to engage in long-term litigation.

On the issue of the plaintiff’s legal expenses, the Court of Appeal disagreed with the trial judge’s approach, but nonetheless upheld the amount awarded for different reasons, including the conduct of Blue Cross.


A Toronto Jury came down hard on Blue Cross.  The Court of Appeal found no basis to interfere with that decision, and in fact went out its way to highlight some of the conduct that warranted such a large award.

The principles outlined in this case should be a warning to all long term disability insurers – not just Blue Cross – that if they treat their insureds poorly during the claims handling process, there may be a large price to pay.

You can read the entire decision, here: Baker v. Blue Cross Life Insurance Company of Canada, 2023 ONCA 842 (CanLII)

For more information about this case, or any other long term disability questions, contact Michael Jordan, a top rated long term disability lawyer, for fast, free legal advice from

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