Insurer entitled to reasonably protect interests in no-fault benefits case

New Brunswick’s Court of Appeal has upheld the notion that insurers can reasonably protect their own interests in a no-fault case, even if those interests are sometimes at odds with the interests of the insured.
In Veno v. United General Insurance Corporation, New Brunswick’s Court of Appeal agreed with a lower court decision that essentially spelled out the rights and responsibilities of both the insurer and insured in the no-fault benefits case before it.
At the time of trial, United General had been paying Ruth Veno $250 per week in benefits, the maximum allowable, after Veno hurt her right foot and ankle in a motor vehicle collision that occurred prior to 2004.
Among the considerations in the appellate court was whether the insurer, United General, had the right to insist that Veno meet with a specialist of the insurer’s choosing for a consultation to determine whether Veno could return to her former work.
Over an extended period after the accident, Veno’s legal representative, independent of the insurer’s knowledge and approval, arranged for Veno to see three different medical specialists.
The insurer balked at paying the specialist’s bills, arguing that Veno’s lawyer did not consult with them or receive prior approval for seeking these medical opinions. In each instance, the invoices represented the only knowledge the insurer had about the treatments sought, the appeal court noted.
The insurer insisted instead that Veno consult with a specialist of United General’s choosing.
When the insurer refused to pay, Veno’s lawyer accused the insurer of acting in bad faith by pre-determining how Veno would receive her treatment.
On this point (the court case deals with many others), the Court of Appeal noted Veno’s definition of good faith would require United General to give as much consideration to her interests as it does to its own interests.
“With respect, that understanding confuses the insurer’s duty of good faith and fair dealing with a fiduciary’s duty of loyalty,” New Brunswick Court of Appeal Chief Justice Ernest Drapeau wrote in his 69-page decision.
“Indeed, the law allows the insurer to protect its own interests by adopting defensible and reasonable (i.e. rationally defensible) legal and factual positions, even if they are at odds with the interests of the insured.”