The respondent, Sara Baker, suffered a stroke and was denied long-term disability benefits by the appellant, Blue Cross Life Insurance Company of Canada.
A jury at trial found in favour of Baker, awarding retroactive benefits, aggravated damages, and $1.5 million in punitive damages, along with full indemnity costs.
Blue Cross appealed the punitive damages award and sought leave to appeal the costs award.
The Court of Appeal dismissed the appeal of the punitive damages, finding ample evidence of Blue Cross's reckless indifference or deliberate strategy to deny benefits, and that the quantum was rationally connected to deterrence.
The Court granted leave to appeal costs but ultimately dismissed the costs appeal, upholding the full indemnity costs based on Blue Cross's misconduct and the respondent's settlement offer, correcting the trial judge's reasoning for the costs award.
