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Fraser v. Fenchurch General Insurance Company, 2022 ONSC 6222


In July 2017, Marilyn Fraser (“the Plaintiff”) applied to her insurer, Fenchurch General Insurance Company (“Fenchurch”), for long-term disability benefits. After undergoing an independent physiatry assessment, no physical impairments were identified. However, the assessor recommended that she should undergo a psychological examination. Fenchurch (“the Defendant”) did not heed the recommendation to have the Plaintiff assessed by a psychological practitioner. Instead, Fenchurch denied the Plaintiff’s claim for long-term disability.

Important Facts

The Plaintiff stopped working about four months before applying for long-term disability benefits. She had been employed as a full-time industrial cleaner for a decade but was experiencing severe pain that impacted her sleep patterns and her overall physical and mental health. In her application for long-term disability benefits, the Plaintiff cited muscle spasms, such serious pains in her legs and shoulders that she could hardly walk or lift her arms, as well as hip pain, fatigue, and emotional issues as various symptoms that prevented her from being able to continue working in her current occupation.

The Plaintiff’s application for long-term disability was supported by her family physician, who believed that her physical conditions would make it impossible for her to return to work. The Plaintiff’s family physician did not include any mental health issues in the primary diagnosis, even though the Plaintiff testified that she had been told by her physician that she was suffering from depression.

The case manager assigned to the Plaintiff’s application for disability benefits recommended that the Defendant seek out an independent medical examination to determine if the Plaintiff’s condition met her insurer’s definition of disability. The independent medical examination was conducted in October 2017.

The independent medical examination reported that the Plaintiff complained of daily nausea-inducing headaches, intermittent pain in her spine and both upper and lower extremities, as well as swelling in her ankles and wrists. The Plaintiff said that, when trying to sleep, she would be woken up by the pain she was experiencing after a few hours and needed to try sleeping in a sitting position to alleviate her pain.

During this examination, the independent medical examiner was not able to find any physical impairments that might be responsible for the medical complaints experienced by the Plaintiff. However, they recommended the Plaintiff receive “a psychological assessment by a practitioner experienced in assessing individuals with chronic pain syndromes.”

Fenchurch did not follow through with this recommendation. In a note approving the case manager’s decision to deny the Plaintiff’s disability claim based on the findings of the independent medical examination, the company’s Chief Operating Officer and director of claims wrote, “Agree with plan to decline – if appealed I would have the psych assessment ready to go.” A letter issued to the Plaintiff in November 2017 informed her of the Defendant’s decision to deny her claim.

Rather than appealing Fenchurch’s decision, the Plaintiff launched civil action. She was granted Canada Pension Plan disability benefits (CPPD). During litigation with the Defendant, she underwent two psychiatric assessments, both of which found that the Plaintiff was unable to return to work because of her psychiatric disorders which met the definition of her insurance contract’s definition of “disabled.” Based on this evidence, Fenchurch ultimately approved the Plaintiff’s request for long-term disability but refused to pay anything for punitive damages.

The case proceeded to trial in May 2022 before Justice H. Leibovich in Oshawa.

Issues in the Case

In this trial, the Honourable H. Leibovich considered the following issues:

  • Was the Plaintiff entitled to extra-contractual damages from the Defendant?
  • If so, what kind of damages are appropriate and in what amount?


The Honourable Justice H. Leibovich concluded that Fenchurch’s decision to deny the Plaintiff’s claim for long-term disability benefits was an act of bad faith.


According to Justice Leibovich, the Defendant failed to provide a logical explanation for not following through with the independent medical examiner’s recommendation to order a psychological assessment. His Honour found that the decision to deny the claim without engaging in the recommended psychological evaluation was contrary to the policies set down in the company’s own procedural manual.

Justice Leibovich referred to the claims log note in which Fenchurch’s director of claims mentioned having “the psych assessment ready to go” if the decision to deny the claim was appealed, saying “this email screams of bad faith.”

Insurers have a duty to fairly assess the claims submitted to them. The Defendant, in this case, knew that their decision to deny the claim without the recommended psychological assessment was wrong but did so anyway.

The judge found that punitive damages were required to denounce and deter the Defendant’s behavior. Due to the years-long delay between the initial claim and the denial and her receipt of disability benefits, Justice Leibovich awarded aggravating damages as well in the amount of $10,000.


It is rare for punitive damages to be awarded in cases involving disputes over long-term disability claim denials. Lawyers do not typically pursue such claims for a number of reasons. In the context of LTD claims, punitive damages are meant to punish bad behaviour and dissuade other insurers from engaging in similar actions in the future. Insurers fight punitive damages claims vigorously.On the facts of this case, Preszler Injury Lawyers was able to successfully prove that Fenchurch acted in bad faith in denying Marilyn Fraser’s claim. As a result, Justice Leibovich awarded our client $150,000 in punitive damages and $10,000 in aggravated damages for the delay caused in paying the claim. It is hoped that the objective of deterrence will be achieved, and insurers will think twice before engaging in similar forms of wrongdoing in the future.

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