Source: https://www.sharelawyers.com/depressiondisabilityclaims.html
Timestamp: 2019-04-22 12:26:13+00:00

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A diagnosis of depression does not necessarily connote disability. For some, depression can be managed effectively with antidepressant medications and psychotherapy. For those who do not respond or respond only superficially to these treatment modalities, however, depression can be severely debilitating, affecting activities of daily living, social functioning and functioning in the workplace.
Disability carriers are increasingly being faced with claimants seeking disability benefits on the basis of mental illness. These types of claims pose their own unique challenges. The potentially subjective nature of the symptoms associated with mental illnesses such as depression can lead to disputes as to functional limitations and these types of disabilities are often approached with skepticism by insurers.
Generally the "own occupation" test is time limited, often restricted to a two-year period. The "any occupation" test does not encompass any possible occupation but rather, has commonly been interpreted to mean an occupation for which an insured would be "reasonably suited" by means of his or her "training, education and experience".
The application of the "any occupation" test is subjective in that it is tailored to the individual's idiosyncratic "training, education and experience". As such, the determination, although a legal one, is largely based on the specific factual matrix including, the insured's education or lack thereof, age, work experience and medical condition . The interpretation of "total disability" by our courts has further circumscribed the "own occupation" and "any occupation" tests.
In Sucharov v. Paul Revere Life Insurance Co. 3 the court rejected the interpretation that being able to perform each employment task individually, amounted to a determination that the insured was not completely unable to engage in his regular occupation. Instead, the court adopted a more holistic interpretation and looked at whether the insured was unable to perform "substantially all" of his employment duties.
In Foden v. Co-Operative Insurance Association 4, Reid J. held that a person who was unable to perform a "substantial portion" of his or her employment, or an essential or material aspect of it, or, in general was unable to perform tasks to the standard of a reasonable employer, was totally disabled.
A determination by the insurer that an insured is "totally disabled" from his or her "own occupation" or from "any occupation" and therefore entitled to benefits, does not mean that an insured is automatically entitled to continue receiving benefits indefinitely. There is an obligation on the insured to make reasonable efforts to rehabilitate. A failure to do so could result in a termination of benefits by the insurer and may result in a reduction in the benefits awarded by a court based on mitigation of damages principles.
"While a plaintiff has the burden of proving both the fact that he has suffered damage and the quantum of that damage, the burden of proof moves to the defendant if he alleges that the plaintiff could have and should have mitigated his loss".
Although mitigation of damages is an accepted principle in our law, many disability insurance policies now specifically incorporate rehabilitation clauses. These clauses may require the insured to undergo therapy, treatment, rehabilitation programs or retraining aimed at reintegrating the insured into the workforce.
In considering whether a plaintiff has failed to mitigate damages, our courts generally consider the steps that the plaintiff would have been required to take to prevent or minimize the loss, the reasonableness of those measures and the extent to which pursuing those measures would have minimized or prevented the loss 8.
Thus a defendant alleging that a plaintiff has failed to mitigate his or her damages has the burden of proving these elements.
Some disability insurance policies may specifically require that an insured submit to medical treatment as a condition of receiving benefits. 9 Generally the insurance policy will define this requirement and often the definition is in the form of requiring the insured to be under the "regular care and attendance of a legally qualified physician".
In Hamilton v. Constellation Assurance Co., 10 the plaintiff applied for disability benefits after a leave of absence from his position as a director of finance at a hospital due to a stress related illness. After his benefits were terminated, the plaintiff brought an action against the insurer. The court held that the plaintiff had satisfied the onus that he was totally disabled however his b enefits were reduced by 25 % because of his failure to mitigate his damages by following medical advice and continuing his use of alcohol, coffee and tobacco.
In contrast, in Brown v. Canada Life Assurance Co ., 11 the plaintiff, who was suffering from a hiatus hernia in his esophagus, esophagitis, and chronic bronchitis, brought an action against the insurer for disability benefits. The policy specified that no payments would be made unless the individual was receiving appropriate medical treatment. The plaintiff smoked and drank daily, against the advice of his treating physicians. The insurer refused to pay benefits to the plaintiff on the basis that his continuing use of alcohol and tobacco and his improper eating habits exacerbated his condition.
The court found that the plaintiff was disabled and allowed his claim for benefits. The court held that there was no evidence before it that the plaintiff was advised of the treatment that he had to follow to remain eligible for benefits.
The court also held that the portion of the policy requiring the plaintiff to receive "appropriate treatment" could not be interpreted as requiring the plaintiff to "receive and follow appropriate treatment and recommendations". The court found that the plaintiff's bad habits were beyond his control and that if the insurer wanted to rely on the plaintiff's bad habits to deny benefits, it could have specifically included the failure to follow a physician's advice with respect to eating, drinking and smoking in the policy. In reaching its decision, the court held that the Hamilton decision does not reflect the present state of the law.
In the context of depression disability claims, the failure of an insured to follow treatment recommendations or to seek consistent medical attention may sometimes be a consequence of the illness itself.
In the decision of Liesch v. Standard Life Assurance Co . 12 , the court found that the insured's use of cocaine and failure to inform his treating physicians of this was a symptom of his depression. The court found that it was unnecessary to determine whether he had failed to seek appropriate treatment.
Accordingly, an insurer looking to terminate benefits on the basis of a failure to seek consistent medical attention should carefully consider the reason behind the insured's failure to seek consistent medical attention.
In determining entitlement to benefits, the courts have considered whether or not regular treatment will be of any significant benefit to the insured in remedying his or her disability.
In Martin v. Mutual of Omaha Insurance Co. 13 Mr. Justice Fanjoy was called upon to consider whether a plaintiff diagnosed with soft tissue rheumatism was entitled to long-term disability benefits and whether her benefits should be reduced as a result of her failure to enter into a rehabilitation program. Mr. Justice Fanjoy held that the plaintiff had not failed to mitigate her damages on the basis that, she had made various unsuccessful rehabilitation attempts in the past and there was no evidence that a proposed rehabilitation program had any prospect of success.
In Kirkness (Committee of) v. Imperial Life Assurance Co. of Canada 14, an insured schizophrenic's committee claimed long-term disability benefits on his behalf under a group policy which required him to be under the regular care and personal attendance of a psychiatrist before he could recover benefits.
The insured refused medical treatment and in an approximate eight-year period, he was seen only three times by three different psychiatrists. A symptom of the insured's schizophrenia was the denial of any illness and the consequent refusal of treatment.
In reaching his decision, Justice Blair considers American case law and states that in his opinion, the tenor of American decisions is in favour of a liberal construction of "regular care" clauses such that they will not bar recovery where permanent disability is established and no useful purpose would be served by regular attendance at a physician.
"The majority rule is that, in instances where the insured's disability is established, such a policy provision is evidentiary only. The principle appears to be well settled that such a requirement has no application in cases of permanent disability. Two reasons are given in support of such holdings. First, it is said that the law does not require performance of futile acts and, although fulfillment of this requirement attests the serious nature of the illness, to give a literal meaning to such provision would be to exalt the letter of the law while submerging the spirit of the contract. Second, it is recognized that the primary purpose of such a provision is to establish the good faith of the insured's claim to guard against fraud. Thus, where it is manifest fraud could not exist, the purpose of the contract would be violated by giving such provision a literal and narrow construction."
Justice Blair indicates that statements to the same effect occur in many US decisions including, Music v. United Insurance Co. of America, 370 P.2d 603, which held that "regular care" clauses do not apply in cases of permanent disability; Hunter v. Federal Casualty Co. of Detroit, 191 N.Y.S. 474 (App. Div. 1921), where the plaintiff suffered a spinal cord injury at the grain elevator where he worked, which resulted in paralysis in his lower limbs. In affirming the lower court decision, the appellate court held that where undisputed testimony by the physicians established that treatment would serve no purpose, the effect of the regular care clause should be suspended; Dixon v. Pacific Mutual Life Insurance Co., 151 F. Supp. 106 (S.D.N.Y. 1957), where the regular care clause was not enforced on the grounds that no treatment was available to alleviate the severe dermatitis which prevented a surgeon from performing surgery; and Brown v. Continental Casualty Co., 200 Kan. 632 , 498 P.2d 26 (Sup. Ct. 1972) where the plaintiff, a carpenter, who had suffered back injuries in an automobile accident, recovered under his disability policy, even though he failed to meet the conditions set out in the policy's "regular care" clause.
In his decision, Justice Blair also refers to the American case of Yager v. American Life Insurance Assn., 44 N.J. Super. 575 (App. Div. 1957), in which the court refused to enforce literally a provision requiring two medical treatments weekly. The court held that such clauses are merely evidentiary. They served no purpose where the evidence had clearly established the existence of the disability and that medical treatment would be of no benefit to the plaintiff.
Justice Blair also considers the relevant Canadian jurisprudence and states that the law of Ontario is correctly stated in the decisions of Krugerv. Mutual Benefit Health & Accident Assn.,  O.R. 157 (H.C.) and Taaffe v. Sun Life Assurance Co. of Canada (1979), 24 O.R. (2d) 790 (H.C.) which are also in favour of a liberal construction.
Plaintiffs claiming benefits on the basis of mental illnesses such as depression should note that mental illnesses such as depression often have a cyclical nature, in the form of periods of remission and recurrence. In light of this and, in light of the fact that there is often a need to continuously monitor the efficacy of antidepressant medication, the requirement that the insured be under the regular care and attendance of an appropriate medical practitioner may be more strictly applied in cases of depression.
The stage of the mental illness may also determine the frequency of care required. More frequent care may be required in the acute phase than in the maintenance phase. An insurer should therefore carefully consider the stage of treatment and what may be reasonable in the circumstances before denying or terminating benefits on the basis of a decline in visits to a medical practitioner.
The foregoing leads to the issue of the level of autonomy that an insured has in directing his or her treatment. Ultimately, this will come down to a question of what is reasonable in the circumstances. If an insured completely shuns any form of traditional medical treatment in favour of alternative therapies, he or she may experience difficulty when trying to justify the reasonableness of this decision. The question of autonomy is discussed further below.
What is "Reasonable" or "Appropriate" Medical Care?
Both the American Psychiatric Association and the Canadian Psychiatric Association have clinical guidelines and established treatment protocols for the treatment and management of depressive disorders.
Although the guidelines proposed by psychiatric associations provide some form of framework for what may be regarded as "reasonable/appropriate" medical care in the context of depression, it is important to bear in mind that different individuals respond differently to treatment. Accordingly, the determination of what would be considered reasonable or appropriate often depends on the facts of each case.
In addition, the inexactitude of medical intervention, particularly in the case of mental illness, lends itself to dispute amongst medical practitioners as to the appropriate treatment and management of mental illnesses such as depression. In general, the reasonableness and likelihood of success of a proposed treatment will be an evaluation made by the court based upon the medical evidence presented by both parties.
It must be noted that in determining whether the insured has complied with his or her duty to mitigate the courts may consider whether the proposed treatment has a reasonable prospect of success, but the courts will generally not regard impecuniosity or an inability to cover the cost of treatment as a justification for a failure to mitigate. 17 This is particularly so where a plaintiff has failed to make any efforts at rehabilitation.
The likelihood of success of a proposed intervention also becomes a consideration where the insured refuses to undergo invasive procedures, usually surgical in nature. In general t he allegation by the insurer is that the insured, in failing to undergo the surgery, has unreasonably refused medical aid and thus missed the opportunity of minimizing at least some part of his loss.
In J aniak v. Ippolito 19 the plaintiff was injured in a motor vehicle accident. On assessing damages, the trial judge refused to award any damages for lost future earnings as the plaintiff refused to undergo corrective surgery, which offered a 70% chance of recovery and would allow plaintiff to return to his previous employment.
The plaintiff appealed to the Court of Appeal, which awarded compensation for loss of future earnings as if surgery has been agreed to, but reflecting the 30% chance that surgery might have failed. The defendant appealed that decision and the appeal was dismissed.
The court held that the question of whether a refusal of remedial surgery was unreasonable was one for the trier of fact. The court held that the test was purely objective and that once the plaintiff was able to establish that he or she sustained damage and the quantum of the damage sustained, the defendant was required to prove both the unreasonableness of the refusal of remedial measures and the prospect of success of such remedial measures.
"In making his findings as to the reasonableness or otherwise of a refusal of medical treatment, the trier of fact will also, of course, take into consideration the degree of risk to the plaintiff...the gravity of the consequences of refusing it ... and the potential benefits to be derived from it..."
In the case of surgical intervention involving serious risk of harm with perhaps limited result, it is likely that a court would consider an insured's refusal to undergo the intervention as reasonable in the circumstances.
The matter becomes slightly more complicated, however, where the risk of harm posed by surgical intervention is relatively low, the outcome likely to be positive, but an insured person does not wish to submit to such procedures out of fear, ignorance or religious belief.
"In saying that the test is based on the decision that a reasonable person in the patient's position would have made, I should make it clear that the patient's particular concerns must also be reasonably based; otherwise, there would be more subjectivity than would be warranted under an objective test. Thus, for example, fears which are not related to the material risks, which should have been but were not disclosed would not be causative factors. However, economic considerations could reasonably go to causation where, for example, the loss of an eye as a result of non-disclosure of a material risk brings about the loss of a job for which good eyesight is required. In short, although account must be taken of a patient's particular position, a position which will vary with the patient, it must be objectively assessed in terms of reasonableness".
In the context of depression disability claims, the question of invasive surgical procedures is unlikely to arise very often. Considerations of whether an insured should undergo electroconvulsive therapy or continue to take antidepressant medications with significant side effects may, however, give rise to similar considerations of whether the conduct of the insured is reasonable in the circumstances.
The issue of novel or experimental treatments and alternative therapies ties in with the question of the level of autonomy that an insured has in directing his or her own treatment.
In the context of informed consent, the freedom of individuals to make choices concerning their medical care has been recognized. In some cases the freedom to make choices concerning medical care has taken on a constitutional dimension under the provisions of s.7 of the Charter.
It is interesting to note that the Financial Services Commission of Ontario, in the context of accident benefits claims in motor vehicle accident cases, has taken a more liberal view of the insured's right to try alternative therapies to alleviate symptamatology associated with his or her condition. I nsurers have been called upon to fund such treatments particularly where there is convincing evidence that the insured person has benefited from the treatments.
It appears that there is a move in recent times towards a greater acceptance by the medical world of alternative therapies and experimental procedures particularly when used to complement more traditional therapies. How this will play out in the context of disability claims remains to be seen. It is likely that with the increase in the use of alternative therapies and greater acceptance by the medical community of these therapies, our courts, and consequently insurers, will be required to adopt a more holistic approach when evaluating an insured's predicament and treatment options.
One of the difficulties associated with mental illnesses like depression is that the symptoms experienced by an insured are largely subjective in nature and difficult to measure on an objective level. As a result, an insured with a mental illness is often treated differently from an insured with a physical illness. In addition, even if there is recognition of the fact that an insured is suffering from a mental illness, there is often dispute as the effect of the illness on an insured's functionality.
As a result of the largely subjective nature of the disability resulting from mental illnesses such as depression, the credibility of an insured becomes very important.
One of the ways in which credibility can be established is by emphasizing the consistency of the insured's complaints to his or her treating doctors as reflected in the insured's medical records.
Generally, where the medical history and complaints are consistent, the reports of treating doctors can be used effectively to challenge the medical perspective advocated by the insurer. This is particularly the case where an insurer relies on a medical evaluation performed by a medical practitioner who has only evaluated the insured for a brief time period and has prepared a negative report based on this limited encounter.
Another effective weapon in an insured's arsenal is the use of lay witnesses who can attest to the difficulties faced by the insured and the changes in the insured since the onset of disability.
In Buchanan v. Prudential Insurance Co. of America 22 , for instance, the insured's spouse was considered to be in the best position to offer evidence regarding his functioning and his total disability as a result of a manic-depressive disorder.
Marshalling the appropriate expert evidence can further bolster a plaintiff's case. The purpose of expert evidence is to provide the trier of fact with a greater understanding of the nature of an insured's impairment, the extent of his or her disability and the effect of the disability on the insured's functionality.
Locating a credible and impartial expert who can comment effectively on the nature of the insured's disabilities and the insured's inability to function in the workplace is often the most powerful weapon an insured can wield.
A plaintiff must not only examine the medical evidence in support of his or her case but also the evidence presented by the insurer. On careful examination, the plaintiff may locate helpful excerpts buried in the reports prepared by the insurer's medical experts, which confirm the plaintiff's inability to function effectively in the workplace. It is important therefore to examine not only the conclusion reached in the medical report, but also the observations made along the way.
For instance, the insured may be a receptionist suffering from severe depression. The insurer has denied benefits and has commissioned an expert to assess the insured's functional abilities in the context pf her position as a receptionist. Various testing is conducted and it is determined that the insured is able to , inter alia, answer the telephone, generate correspondence and file documents. The assessors conclude that the insured is "functionally able to perform the essential duties of her occupation".
The report generated by the assessors, however, contains numerous references to the fact that although the tasks were completed, the period of completion was extremely prolonged, the insured displayed flat affect, little motivation, concentration difficulties, fatigue and anxiety. An astute plaintiff's counsel can use these observations to demonstrate that these comments constitute recognition of the plaintiff's disability and confirmation that the plaintiff would not meet the expectations of a reasonable employer.
Before terminating or denying benefits on the basis that an insured has refused to follow treatment, the insurer must consider some of the issues mentioned above in particular, the phase of the illness and stage of treatment, whether the failure to follow treatment is a symptom of the illness and whether the proposed treatment is likely to be of any benefit to the insured in alleviating the condition. Failure to consider issues such as these may result in a judgment in favour of the insured.
In principle, there should be no difference in the application of the mitigation rule to subjective and objective claims. In the case of subjective claims, however, establishing what would constitute effective and/or reasonable treatment may be subject to greater interpretation.
With many objective claims, the outcome of treatment is often capable of objective measurement using diagnostic aids such as blood tests, scans and x-rays. This is generally not the case with subjective claims where greater reliance is placed upon the insured's own reports of functional limitation thus increasing the opportunity for disagreement and dissention.
In Green v. Mutual of Omaha Insurance Co. 25 , the insured claimed benefits under an accident and sickness insurance contract. In 1980 the insured suffered a hand injury, which prevented him from resuming his work as a denturist. The insured worked for a while after his injury as a data control clerk and as a cab driver. The court held that the insured was entitled to benefits until March 1985. The court stated that this was not a case where payments under the policy should be made indefinitely as the court felt that with retraining, the insured would be able to engage in other gainful work or service.
In Young v. Saskatchewan 26 , the court held that a while undergoing retraining, a claimant was deemed to be disabled until such time as he has become fitted for a reasonable occupation.
The question of part-time employment was considered in S tronge v. London Life Insurance Co 27 . In Stronge , the insured's benefits were reduced by 25% , as he had failed to mitigate his loss by returning to part-time employment. The insured worked in a warehouse from 1975 to 1988. After sustaining back injuries, he was transferred to lighter duties of a sedentary nature. In 1987, he was diagnosed with Chronic Fatigue Syndrome. In 1988, he claimed to be totally disabled and entitled to long-term disability benefits.
The court held that there was medical evidence to support the claim that the plaintiff was disabled for approximately five months and precluded from working. The court awarded him damages for that period but because there was evidence that he could have worked part time even during the five-month period, the court further reduced his damages by 25% for failure to mitigate. It must be noted that the defendant had introduced surveillance photographs of the plaintiff showing him engaged in heavy physical activity without any difficulty.
It is submitted that the foregoing decision turned on the specific facts of the case and does not place an obligation on an insured to seek part-time employment. Furthermore, the way in which our courts have interpreted the "any occupation" requirement (i.e as requiring employment commensurate in remuneration and status) suggests that there is no general obligation to take up part-time employment.
Special Considerations for Disabled Claimants with Long Periods of Relative Stability - Is there an Obligation to Return to Work During "Good Periods" and Remissions?
Disability insurance policies often provide that benefits will not be terminated if the insured returns to work temporarily but suffers a relapse of the disabling condition within a specified time period.
A return to work does, however, potentially expose an insured to the possible termination of his or her benefits. If the insured does suffer a relapse of the disabling condition, he or she will once again have the burden of establishing total disability and/or continuous disability where benefits have been terminated.
Although there is an obligation on the insured to mitigate his or her damages and an attempted return to work could be regarded as such, it is doubtful that there is an obligation on the insured to return to work particularly where disability is likely to recur.
Our courts have generally approached the concept of mitigation of damages from the perspective of what is regarded as reasonable conduct in the circumstances.
Failure to make any attempts to mitigate damages could potentially expose an insured to a reduction of benefits even where the insured is found to be totally disabled.
Whether an insured has taken adequate steps to mitigate his or her damages will be a determination made on the facts and circumstances of each case.
A defendant seeking to rely on the plaintiff's failure to mitigate his or her damages must be able to prove the reasonableness of the steps that it is alleging the plaintiff should have taken to mitigate his or her damages and the extent to which pursuing those measures would have minimized or prevented the plaintiff's loss.
There is no doubt that depression disability claims are on the rise. It is therefore vital that insurers and claimants to give careful consideration to the application of mitigation principles to these types of claims and govern themselves accordingly.
4 Foden v. Co-operators Insurance Assn (Guelph)  I.L.R. 1-1045 (H.C.J.).
15 Robin T. Reesal, Raymond W. Lam and the CANMAT Depression WorkGroup, Clinical Guidelines for the Treatment of Depressive Disorders, The Canadian Journal of Psychiatry, Vol 46, Suppl 1, page 21S.
16 Robin T. Reesal, Raymond W. Lam and the CANMAT Depression WorkGroup, Clinical Guidelines for the Treatment of Depressive Disorders, The Canadian Journal of Psychiatry, Vol 46, Suppl 1, page 22S.
24 D'Andrea J., Corry D., Forester H., Redmond K.L., Illness and Disability in the Workplace, How to Navigate Through the Legal Minefield, (Canada Law Book Inc., 1998).
25 Green v. Mutual of Omaha Insurance Co ., 4 C.C.L.I. 34, 61 N.S.R. (2d) 352.

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