Steps in a Long-Term Disability (LTD) Insurance Case
Updated: Mar 17
You may be considering starting a lawsuit or you may have already decided to sue the insurance company for your Long-Term Disability (LTD) benefits. At this early stage, you probably have many questions about what is involved in suing the insurance company for your long-term disability benefits. We hope that you will find this article useful in addressing your questions and concerns. If you still have questions, we encourage you to contact us or an experienced disability insurance lawyer.
1. Timing of the Lawsuit
The question of timing is one that often comes up when we first speak with a client. We understand timing is important because our client does not have an income. However, the timing of a disability insurance lawsuit is difficult to predict. It depends on many things, including what actions the insurance company decides to take and when, the lawyers’ and court schedules, and the decisions you and your lawyer make throughout the litigation process. In fact, a long-term disability lawsuit can take up to two years or longer to settle or to go to trial. Although we work hard to resolve our cases as quickly as possible, we find the litigation process will take at least nine to twelve months before a case resolves. Irrespective of timing, most long-term disability lawsuits go through the same basic steps, though not necessarily in the same order.
As you read on, it is important to understand that all lawsuits are different; they have different sets of facts and issues, there are different lawyers and insurers and they are brought in different jurisdictions. Just because your friend or neighbour’s case was resolved quickly and for a large settlement, does not mean that your case will resolve the same way.
The steps listed below are the usual steps we take, representing our disabled clients in their long-term disability insurance lawsuits. We hope this list and information will give you a general sense of what you can expect as you move through your own long-term disability benefits lawsuit.
2. Gathering the Facts
The first thing we do, together with our client’s help, is to gather all the available facts and evidence to support our client’s claim. This includes, requesting the insurance claims file from the insurance company, requesting medical records and reports from treating doctors, specialists and other treatment providers. We may also send our client for independent medical assessment(s) to help us prove to the insurance company that our client is totally disabled.
Making these requests often takes time and money. The money spent on requesting these documents and medical assessments will form part of our client’s disbursements. We will pay for our client’s disbursements upfront. Generally, the insurance company will then repay us for some or all of the disbursements during the litigation or at the end of the lawsuit, as part of a settlement or court judgment. Whatever the insurance company does not repay, will be up to our client to repay to us when the case resolves.
It is important to understand that although you may have to repay us for disbursements, the cost of these documents and medical assessment(s) is relatively small compared to the value they will add to your case by providing
evidence of your totally disability.
2. Starting the Lawsuit
Once we have the information we need about the facts of our client’s case, we will begin the lawsuit by preparing the necessary court documents, serving them on the insurance company and filing them with the Court. The Court document that starts the lawsuit is called the Statement of Claim. This step also involves disbursements such as the cost of process servers and Court filing fees.
When we provide our client with a copy of their Statement of Claim we explain that the amounts claimed in the lawsuit are usually much higher than they can expect to receive in a settlement or if they are successful at trial. The reason for making these claims in the lawsuit is because it is often difficult to predict exactly how much our client may be entitled to in terms of benefits, damages, costs, etc., so early on in the litigation. It is important that we make these claims in the Statement of Claim knowing that if we do not include them, we may not be able to pursue them later on in the litigation.
3. Bringing Motions
After we start a lawsuit but before trial, we or the insurance company may need to ask the Court to make various determinations or Court Orders. Going to Court to ask for an Order is called bringing a Motion. Motions in long-term disability cases are usually about how the lawsuit should proceed or what documents or witnesses need to be produced for Examinations for Discovery. For example, on a Motion we might ask the Court to order that the insurance company provide us with answers to our questions, information or documents that they are refusing to provide. We might also bring a Motion asking the Court to impose deadlines for completing various steps in the lawsuit.
4. Examinations for Discovery
Once the facts and documents been gathered and exchanged by way of the Affidavits of Documents, the lawyers will schedule Examinations for Discovery. This is a process by which each lawyer has a chance to ask the opposite party questions about their case and answers are given under oath. This usually takes place in a boardroom, where a court reporter records and transcribes all of the questions and answers. The process typically takes a few hours for each examination, though sometimes the process takes longer or sometimes shorter, depending on the particulars of the case, the lawyers involved and the parties’ ability to answer questions and the frequency and duration of rest breaks.
In a Long-Term Disability benefits lawsuit, we ask to examine the person who made the decision to deny or terminate our client’s long-term disability insurance claim (usually it is the Case Manager). The insurance lawyer will ask to examine our client. We spend as much time as necessary to prepare our client, in advance of their examination so that they know what to expect and to to ensure that will be less anxious during the process. We also attend with our client and sit beside them, to ensure that the insurance company’s lawyer’s questions are fair and relevant to the case. Our client does not attend at the examination of the insurance company representative. However, we will report back to our client about the examination of the insurance representative.
At the examination of the insurance company, we question the insurance representative or case manager about how they handled our client’s claim and how they reached their decisions. We also ask them for all relevant documents and detailed explanations about those documents. The insurance company’s lawyer questions our client about their disability and about why they are not able to work, as well as to explain some of the documents provided in their Affidavit of Documents. They may also ask us for updated medical records and other documents we might not yet have provided.
While the lawyers will likely be polite, professional and possibly even friendly with each other and with each other’s clients, it is important to remember that at the Examinations for Discovery, both sides will be working hard to obtain facts and evidence to support their own cases.
5. Review of the Law
After all of the facts and evidence have been brought to light, we will review the applicable law and consider the risks to the client of proceeding to trial as opposed to resolving the case by way of settlement negotiations. At this stage, we provide the client with our opinion about what the likely outcome of a trial would be, and also how much money our client could reasonably expect to obtain at trial or on a settlement. We spend time discussing risks of trial and settlement. It is important to remember that we cannot guarantee any specific outcome. All we can do is provide our opinion based on the law, the facts of the case and on our experience in litigating long-term disability insurance cases.
6. Negotiation, Mediation and Settlement
Throughout the lawsuit the parties will have opportunities to discuss settlement. A Settlement is an agreement between the parties to a lawsuit which sets out how they will resolve the dispute (how much will be paid and the terms and conditions of the payment). If the lawsuit is settled, it does not go to trial and the parties agree to have the lawsuit dismissed by the Court.
In our experience with litigating long-term disability insurance disputes, most cases settle at Mediation. Mediation is an informal process whereby an impartial third-party mediator assists the parties in coming to an agreement to settle the lawsuit. Prior to Mediation, the parties exchange Statements of Issues, these are legal briefs that set out the facts and evidence, issues and arguments that each side intends to make at trial.
At the Mediation we negotiate with the insurance company, following instructions from our client. We provide our client with information and recommendations to allow them to make the best possible decisions about how their case resolves. The Mediation usually takes a full-day and we encourage our client to bring a friend or family member for support.
It is important to understand that it is only at Mediation or by way of informal settlement negotiations, that you have the opportunity to decide how to resolve your case (for example, you decide how much money to accept and other terms of the settlement). If your case does not settle and goes to trial, the judge/jury will make those decisions for you and for the insurance company.
7. Preparation for Trial
If a lawsuit does not settled, it will proceed to Pre-Trial and and ultimately, Trial. Preparing the case for Trial includes compiling all the necessary documents, arranging for witnesses to attend, preparing witnesses and evidence, and preparing any legal opinions. Very few long-term disability insurance cases go to Trial. Most settle through negotiations or at Pre-Trial, with the assistance and encouragement of a Judge who provides his/her opinion regarding how the case would likely go at trial.
Long-Term Disability insurance trials often last as long as two to three weeks depending on how complicated the issues, facts and evidence are. Usually, these cases are decided by a judge and not a jury. It may take the judge or jury deciding the case an additional few days, weeks, or months after the trial to make a final determination about the case. If the lawsuit goes to trial, it could be two to three years or more from the start of the lawsuit to a judgement at trial.
It is important to remember that in a long-term disability benefits lawsuit, if you are successful at trial the judge/jury is only able to award you a Declaration that you are disabled as of that date. This means that the insurance company will be ordered to pay you past benefits to the date of trial and some of you legal costs and then it will continue to assess your claim and pay benefits so long as you are complying with the terms and conditions in the insurance policy. They can terminate your benefits again, if they so choose.
If you are unsuccessful at Trial, will not be awarded anything and you might not owe your lawyer any fees (depending on the Retainer Agreement you signed), but the Judge may order you to pay all or some of the insurance company’s legal fees or costs. This can be quite costly and is therefore an important consideration when deciding whether to go to trial as opposed to settling your case.
9. Concluding the Lawsuit
If the case settles or if our client is successful at trial, the insurance company will be required to pay money to our client. The funds are usually sent to us in Trust for our client. We will deposit the funds into our Trust bank account and then distribute the funds to our client, less our fees, disbursements and HST, according to the terms in our Retainer Agreement. We will then either obtain an Order dismissing the lawsuit from the Court or consent the insurance company obtaining the Order. Once the lawsuit is concluded, monies paid to our client and lawsuit dismissed, we will close our client’s file.
Please understand that these Steps in a Long-Term Disability (LTD) Benefits Lawsuit are meant to give you a general sense of what happens in litigation. The litigation of these types of cases is complicated, based on contract (the insurance policy) and fact- and evidence- specific. If you have questions about your case or about the litigation process, we encourage you to contact us or an experienced disability insurance litigator.
Posted by Courtney Mulqueen, Principal Lawyer,
Mulqueen Disability Law.
If you wish to discuss these options with a lawyer, Courtney has over 20 years experience dealing with disability cases. We would be happy to provide you with a free consultation, during which we can discuss these options and answer your many questions. We are here to help.
The preceding is not intended to be legal advice. This blog is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog, you understand that there is no solicitor client relationship between you and the blog publisher. The blog should not be used as a substitute for competent legal advice from a licensed lawyer in your jurisdiction. If your disability claim has been denied and you require legal advice, contact a lawyer specializing in disability law.