Full Indemnity For Costs Award In Disability Insurance Dispute Has Far Reaching Consequences

On January 19, 2017, Madam Justice Brown of the British Columbia Supreme Court issued reasons in Tanious v The Empire Life Insurance Company, 2017 BCSC 85 ("Tanious"), awarding the plaintiff full indemnity for her costs in a dispute over long term disability benefits, a decision with possible far reaching consequences for insurance coverage disputes.

Facts and Claim

The underlying action was a claim by the plaintiff against her insurance company after it terminated her long-term disability benefits pursuant to a disability policy that formed part of her employment benefits. The plaintiff was diagnosed with Multiple Sclerosis ("MS") which impaired her ability to continue working and triggered the payment of long-term disability benefits under her policy. To cope with the symptoms of MS, the plaintiff began using crystal methamphetamines ("crystal meth"). The defendant took the position that the plaintiff was not entitled to long term disability benefits on the