Insurance

In the recent decision in Hashem c. Canada Life Assurance Company,1 rendered on January 12, Justice Karyne Beaudry of the Court of Québec reiterates the importance of doctors respecting their ethical obligations and preserving their professional independence when issuing a medical certificate in support of a disability insurance claim. Context of the insurance claim In this case, the plaintiff, Rayan Hashem (“Mr. Hashem”), representing himself, was claiming $67,133.28 in disability insurance benefits from the defendant, The Canada Life Assurance Company (“Canada Life”), under two credit insurance contracts issued for Royal Bank of Canada clients: one for a mortgage loan and the other for his line of credit. Mr. Hashem was also claiming $10,000 in moral damages due to Canada Life’s refusal to pay the benefits he believed were owed to him. On January 4, 2019, Mr. Hashem’s treating physician, Dr. Samuel Issid, diagnosed his patient with an adjustment disorder with depressive mood following an episode of psychological harassment at work. He concluded that there was a total incapacity for work for an indefinite period of time. Mr. Hashem then submitted an initial claim for disability insurance benefits, which was accepted by Canada Life. Upon expiry of the 60-day waiting period stipulated in the insurance contracts, Canada Life paid him benefits. As of June 2019, Mr. Hashem’s health condition was improving. Dr. Issid believed that returning to his job as a sales representative at Meubles Léon was impossible, but that he could do another job. On July 29, 2019, Dr. Issid noted that Mr. Hashem could gradually return to work starting that day. In his medical note dated August 7, 2019, he indicated that Mr. Hashem’s adjustment disorder was resolved. On August 6, 2019, Canada Life notified Mr. Hashem that the disability benefit payments would cease as of September 2019. From August 2019 to November 2019, Mr. Hashem performed paid transportation work for Uber. On October 4, 2019, Mr. Hashem consulted Dr. Issid again because he felt he was experiencing a relapse of his adjustment disorder. Dr. Issid found that he was indeed affected by an adjustment disorder with depressive mood, but believed he could do something else elsewhere and requested an expert opinion from the CNESST.  Dr. Issid did not prescribe medical leave, and Mr. Hashem continued to drive for Uber after this medical consultation. He stopped doing this job in November 2019, because “the job was not suitable for him” [translation], as he stated during the hearing. It was not until January 22, 2020, that Mr. Hashem consulted Dr. Issid again, still for his adjustment disorder. On that date, Dr. Issid noted the following: Not seen since October. Holds Uber taxi licence, studying to be a real estate broker. Lazy person, has not worked and wants two more weeks of pay at the expense of the CSST. Expert opinion already requested in October; I can’t help him and I don’t want to see him again for this case. [translation] Beginning in March 2020, Dr. Issid suspended his medical practice until September 2020 due to the COVID-19 pandemic. On April 8, 2020, Mr. Hashem consulted Dr. Yves I-Bing Cheng. The purpose of the consultation was to obtain “a medical document to reactivate his file and be able to claim insurance” [translation]. Dr. Cheng stated in his medical note that he could not sign such a document, as he had not been involved in Mr. Hashem’s case. He also noted that Mr. Hashem had seen Dr. Issid three times since August 2019 and that he could have spoken to him about it on those occasions. On September 24, 2020, Mr. Hashem returned to see Dr. Issid, who, at his request, filled out the Canada Life Disability Benefit Claim Form. On it, Dr. Issid indicated that Mr. Hashem became disabled on December 14, 2018, and that his condition initially improved, only to deteriorate later due to COVID-19. Mr. Hashem submitted this form to Canada Life to support his new claim for disability benefits. At the hearing, the Court gave little credence to this form completed by Dr. Issid: first, Justice Beaudry noted that Dr. Issid had found that Mr. Hashem’s disorder was resolved in August 2019, and secondly, she noted that Dr. Issid did not see Mr. Hashem again between February and September 2020. She was of the opinion that the diagnosis seemed to be based more on assumptions than on clinical observations. She found that the form was completed at Mr. Hashem’s insistence. On February 10, 2021, Canada Life informed Mr. Hashem that it refused to pay further disability benefits because he did not meet the definition of total disability under the policies, in particular because he had not provided satisfactory evidence of his disability. On March 26, 2021, Mr. Hashem submitted another claim for benefits, this time supported by medical forms completed by Dr. Yves I-Bing Cheng. In them, Dr. Cheng indicated that Mr. Hashem had been totally disabled since December 14, 2018, due to an adjustment disorder with anxious-depressive mood, and that no date for his return to work was planned. Dr. Cheng mentioned the following in his medical note on the same day: I filled out the insurance form with the patient, point by point, to make sure that everything complied with the patient’s wishes. [translation] This new claim was also rejected by Canada Life. The Court found that the information recorded on the form completed by Dr. Cheng had little to no credibility. It is important to note that neither of Mr. Hashem’s treating physicians testified at the hearing to contextualize or explain their diagnoses. No expert report was submitted for the plaintiff. In its defense, Canada Life produced the expert opinion of a psychiatrist, Dr. Paul-André Lafleur, who testified at the hearing. Justice Beaudry notes that Dr. Lafleur had been practicing psychiatry for 40 years, that his testimony was clear, and that his findings were supported by facts that he himself observed during an interview conducted with Mr. Hashem, or that emerged from extracts of his medical records or from the CNESST. Dr. Lafleur concluded that Mr. Hashem’s medical condition between August 2019 and December 2022 did not render him incapable of holding a sales representative position, although he acknowledged that he could not hold this position with his former employer. Justice Beaudry found Mr. Hashem’s testimony to be not very credible and noted that Mr. Hashem had a subjective perception of his inability to work. He refused to take any position other than the one he held at Meubles Léon before his claim to Canada Life. Based on the evidence, Justice Beaudry found that Mr. Hashem had not demonstrated that he was entitled to disability insurance benefits as of October 4, 2019. Given his skills and abilities in the field of sales, he could hold a sales representative position elsewhere than with his former employer. Canada Life was therefore justified in rejecting his claims for disability benefits in September 2020 and March 2021. Credibility of the insured’s medical evidence Although the doctors consulted in the context of the new benefit claims maintained the diagnosis of adjustment disorder as of October 4, 2019, the Court emphasizes that this diagnosis alone was not sufficient to establish the existence of a disability meeting the contract’s criteria, especially since this diagnosis was supported by inconsistent and unreliable medical evidence. The mere fact that a doctor has filled out a claim form does not automatically entitle the insured to compensation: the definition set out in the contract remains applicable and the criteria must be met.2 The ethical obligations of a doctor and the consequences of writing an unfounded medical certificate In this case, the Court reminds doctors of the importance of supporting their medical certificates with objective clinical observations and avoiding simply endorsing the requests of their patients. Medical certificates issued at the insistence of patients, or by giving in to their pressure, are considered false certificates.3 The ethical obligations of doctors prohibit them from issuing such certificates and, more generally, from providing information they know to be inaccurate,4 in particular in the aim of allowing a patient to obtain a benefit to which they are not entitled.5 Conclusion  Medical certificates must be founded exclusively on medical grounds arising from an actual assessment of the patient’s condition.6 They must not be founded on extraneous or irrelevant considerations.7 In addition to damaging the credibility of the medical profession, issuing false certificates has significant repercussions in the workplace and generates considerable financial costs for employers, insurers, and the government.8 Key points to remember In disability insurance matters, the terms and definitions of the insurance contract are paramount and are the main elements that must guide the interpretation and determination of the insured’s disability status. Medical certificates and claim forms are only elements used in determining the insured’s state of disability and are not proof of disability in and of themselves. A medical diagnosis is not automatically a sign of disability. It is important for functional limitations to be identified. Having a qualified expert who is able to comment on the insured’s medical condition at the hearing can make a big difference in the outcome of litigation. Hashem c. Canada Life Assurance Company, 2026 QCCQ 41. G.G. c. SSQ, société d’assurance-vie, 2017 QCCQ 9442, par. 19 COLLÈGE DES MÉDECINS DU QUÉBEC, ORDRE DES CONSEILLERS EN RESSOURCES HUMAINES AGRÉÉS, ORDRE DES INFIRMIÈRES ET INFIRMIERS DU QUÉBEC, Certificats médicaux et travail, (Medical Certificates and Work), June 2025, p. 14, online: https://cms.cmq.org/files/documents/Guides/gui-certificats-medicaux-travail.pdf Code of ethics of physicians , CQLR, c. M-9, r. 17, s. 7 and 85. Ibid. , s. 97-98. Médecins (Ordre professionnel des) c. Larouche, 2018 CanLII 6869 (QC CDCM), para. 184. Médecins (Ordre professionnel des) c. Léonard, 2025 QCCDMD 27 (CanLII), para. 169. Op. cit. note 3.

Lavery’s Annual Insurance Law Review will be held on Tuesday, February 17. This conference will provide a review and analysis of the most significant insurance law decisions rendered in Quebec over the past year. We will also discuss their practical implications for your organization, your risk management, and your business operations. The training is recognized by the ChAD and the Barreau du Québec. When: February 17, 2026, From 8:00 to 9:30 a.m. Speakers : Jonathan Lacoste-Jobin et Dominic Boisvert   In order to receive an attestation of attendance for continuing education purposes, please use your professional email address for registration and be sure to attend the entire webinar. Register to the webinar

Introduction On July 2, 2024, the Superior Court rendered a decision in Lallier c. Société d’assurance Beneva inc.,1 ruling on an insured’s claim against his insurer for an insurance benefit further to a loss, as the insurer had denied coverage, alleging the insured’s intentional fault. Despite the absence of hard evidence of the insured’s intentional fault, the Court ruled in favour of the insurer based on evidence established by presumption.  The facts During the night of August 2 to 3, 2020, a fire destroyed the home of Plaintiff, Mr. Réjean Lallier (hereinafter “the Insured”). His version is that he accidentally left a candle burning in the bathroom before running errands with his son. When he returned, the Insured saw that the house was on fire. Having no telephone, he rushed to a convenience store to call the fire department, rather than asking a nearby resident for help. After the loss, the Insured contacted his insurer Société d’assurance Beneva inc., the defendant in the case (“the Insurer”), to obtain compensation for the damage to his property. The claims adjuster that the Insurer had assigned to the case and who had been tasked with investigating the loss and compensating the Insured raised several anomalies in the Insured’s deposition. These included the Insured’s precarious financial situation, the fact that the residence was poorly maintained and the fact that, despite the urgency of the situation, the Insured had decided to take his car to call for help rather than go to a neighbour’s house. In these circumstances, the case is referred to the Insurer's special investigation unit. The Insurer’s investigation ultimately led to the conclusion that the Insured had intentionally caused the fire. This meant that contractual and legal exclusions applied, allowing the Insurer to deny coverage and justify its refusal to pay an insurance benefit. The Insured, who represented himself at the trial, instituted legal proceedings for the sum of $680,000, seeking reparation for damage to the immovable, his movable property and for living expenses. He also claimed $20,000 in compensation for the alleged inconvenience he suffered as a result of the Insurer’s “abusive behaviour.” Analysis The Honourable Justice Sébastien Vaillancourt, J.S.C., pointed out that, under article 2464 of the Civil Code of Québec2 and the provisions of the insurance policy, the Insurer is not obliged to compensate for damages intentionally caused by the Insured. However, the Insurer has the burden of establishing the Insured’s intentional fault. The Court reiterated that intentional fault is defined as behaviour that is deliberately and voluntarily intended to cause harm.3 The offender’s intention must not only be evident in the actions taken, but also in the ensuing consequences.4 This can be demonstrated through serious, precise and concordant presumptions, in accordance with the teachings of the Court of Appeal in Barrette on the subject.5 To meet its burden of proof, the Insurer presented to the Court the inconsistencies and improbabilities in the Insured’s statements. For example, in some statements, he claimed to be in a good financial position, while in others, he stated the opposite. In addition, the time at which he left his house after lighting the candle, what he did with his son after he left and how long he was gone changed from one statement to the next. The Insured had trouble explaining in a coherent manner why he was gone for so long late in the evening while his house was going up in flames. The Insured indicated that he went to the convenience store to contact the fire department after seeing the fire, stating that he did not want to go to his neighbour’s house because they had had a disagreement in the past. The Court concluded that this version was implausible given the gravity of the situation. Several other contradictions were noted in the Insured’s testimony at trial. The Insured tried to justify himself by claiming that he had trouble speaking in public and that his medication was causing him to lose his memory.6 However, there was no evidence to support these claims, and they were not upheld by the Court.7 Ultimately, the judge did not accept the Insured’s version. The sheer number of contradictions in his statements went beyond what was acceptable to the Court to consider them reliable. Given that certain contradictions emerged as early as the first statement after the fire, the time lapse between the incident and the trial could not be used as a justification.8 The statements were considered untrue, as they were mutually inconsistent.9 What is more, the contradictions and inconsistencies in the statements pointed to fraudulent intent on the Insured’s part. Lastly, the claim for damages in compensation for the Insurer’s abusive behaviour was also dismissed, given the absence of evidence in this regard.10 Conclusion Demonstrating fraudulent intent to deny coverage is no simple feat for insurers. In this case, the Insurer succeeded in meeting its burden of proof by relying on presumptions rather than hard evidence. The facts spoke for themselves. And faced with the Insured’s numerous inconsistent and contradictory statements, the Court ruled in favour of the Insurer. The Insured’s fraudulent intent was successfully substantiated and his claim against the Insurer was dismissed.11 Lallier c. Société d’assurance Beneva inc., [2024] n° 500-17-116356-216, QCCS. [Lallier] (Time limit for appeal: 30 days after the date of the notice of judgment). Civil Code of Québec, a. 2464; Lallier, para. 34. Allstate du Canada, compagnie d’assurances c. D., SOQUIJ AZ-50101469, J.E. 2001–1891, (C.A.), para. 18, as quoted in Lallier, para. 36. [Allstate] Allstate, para. 18, as quoted in Lallier, para. 36.  Lallier, paras. 37–38; see Barrette c. Union canadienne (L’), compagnie d’assurances,2013 QCCA 1687, paras. 12–13. Lallier, para. 43. Lallier, paras. 44–46. Lallier, para. 47. Maud Rivard, Dispositions générales applicables aux assurances de dommages, JCQ-Droit civil Contrats nommés II, Fascicle 20, para. 92, updated to June 20, 2023, as quoted in Lallier para. 49. Lallier, paras. 59–62. Lallier, paras. 56–58.

On February 12, 2024, the Court of Appeal of Quebec handed down its decision in Société d’assurance Beneva inc. c. Bordeleau,1 dealing in particular with the burden of proof incumbent on an insurer when it denies coverage on the basis of an insured’s intentional fault, and an award of damages against an insurer for breach of its duty of good faith. The facts This decision was rendered further to a dispute between Société d’assurance Beneva inc. (hereinafter the “Insurer") and some of its insureds, including Mr. Michel Bordeleau, the owner of a multi-storey rental building that was damaged by fire. He lived in one of the units with his parents. According to the uncontested expert evidence presented, the fire originated in one of the storage spaces in the basement of the building, which was assigned to a lessee couple. Access to the basement and all storage spaces was locked. The cause of the fire was deemed to be intentional, given the traces of accelerant found in the area of the fire’s origin. The instigator or instigators were not identified. On November 21, 2016, 60 days after the fire, the Insurer denied coverage because of the intentional nature of the fire, which it attributed to its insured, Mr. Bordeleau. A few months later, on March 22, 2017, it reached an agreement with Mr. Bordeleau’s hypothecary creditor. The subrogation release provides for the Insurer’s payment of the balance of the hypothecary debt of $149,720.99, and subrogation to the creditor’s rights up to the amount paid. Mr. Bordeleau, in his belief that he had been harmed by the Insurer’s decision, instituted legal proceedings to recover the insurance benefit to which he claimed to be entitled, while also claiming damages. The Insurer filed a cross-application for recovery of the balance paid to the hypothecary creditor. The trial The trial judge, relying on the evidence, concluded that although the fire was intentional in nature, the Insurer had not discharged its burden of establishing the insured’s involvement in the fire. Taking this conclusion into account, she then proceeded to analyze the plaintiffs’ claim and to weigh the damages in light of the evidence and the limits of the insurance policy. In particular, she ruled in favour of Mr. Bordeleau’s claim for damages for the building, the amount of which was admitted. In addition, she ordered the Insurer to pay $15,000.00 in damages for nuisance and inconvenience caused by its conduct, which she considered faulty. This conclusion was based on the Insurer’s duty to act in good faith, to consider the facts and act on their basis, and to conduct a full investigation, duty which the Insurer had breached by failing to sufficiently follow-up on leads that could have identified who was responsible for the fire. In order to deny coverage, clear and compelling evidence of the insured’s involvement, going beyond mere suspicion, was necessary. Given the sometimes implausible and sometimes contradictory testimonies of the people met during the investigation, there was no such evidence. In other words, the claims adjuster had jumped to conclusions. In light of her conclusions, the trial judge dismissed the Insurer’s cross-application, which she deemed to be unfounded, without giving further reasons. The appeal The Court of Appeal first refrained from intervening in light of the Superior Court’s conclusions regarding the failure to demonstrate Mr. Bordeleau’s involvement in the fire. It did however intervene on the damages awarded for nuisance and inconvenience suffered by the insureds, and pointed out the following: [40] [translation] Firstly, apart from the strict mathematical calculation of the amounts payable, and perhaps other technical aspects not requiring the exercise of judgment, the processing of a claim is an obligation of means, not one of result. The fact that a court found at the end of a trial held many years after the incident that an insurer should have covered in the first place obviously does not mean that the insurer necessarily committed a fault other than its refusal to pay, making it civilly liable, let alone that it acted in bad faith. [41] In this case, there was nothing in the evidence to support a finding of fault or breach of the duty of good faith. [42] On the contrary, there is enough evidence to conclude that the investigation by the appellant and its experts, which led to the denial of coverage, was not botched. . . . In the opinion of the Court of Appeal, the evidence showed that the Insurer’s investigation had been done in a conscientious manner, in particular because it had transferred the claim file to a special investigative unit, mandated a fire origin and cause expert and external investigators, and interviewed many witnesses who could have provided information on the circumstances of the incident. Moreover, it had no allegations that the Insurer had failed to consider exculpatory evidence against its insured. In this context, although it took several years for the insured to obtain his due, with all the inconveniences of going through proceedings, the Insurer’s conduct could not be considered offending or revealing of bad faith. No damages could be awarded. Lastly, the Court of Appeal took a closer look at the question of the Insurer’s subrogation to the hypothecary creditor’s rights, which was little discussed in the judgment under appeal. Reiterating the fundamental principle in property and casualty insurance that the indemnification of an insured cannot result in enrichment, the Court of Appeal concluded that dismissing the Insurer’s cross-application would have such an effect. In addition to receiving an insurance benefit for the damages sustained, Mr. Bordeleau would also have had seen his hypothecary debt discharged. This would have given him a clear advantage. In this case, the benefit paid to the hypothecary creditor needed to be deducted from the damages claimed by the insured. The trial judge’s finding were thus revised accordingly. Conclusion Despite the clear principles addressed in this case, the Court of Appeal’s analysis points to practical difficulties that insureds and insurers can encounter when dealing with similar claims. It points to the coexistence of two factors that can be difficult to balance: First, the burden of proof where coverage is denied on the basis of the insured's intentional fault, and second, the insurer’s obligation of means in processing the associated claim. The dismissal of a coverage defence does not in itself warrant awarding damages. Société d’assurance Beneva inc. c. Bordeleau, 2024 QCCA 171