by Shawn Cumberbatch
The treatment Canadian insurer Manulife’s meted out to more than 8,000 Barbadians is “reprehensible” and the company should be made to pay. And Ontario Superior Court Justice Frank Newbould’s failure to award the former policyholders $157.8 million in compensation despite acknowledging “a prima facie duty of care” by Manulife condoned the behaviour.
That’s what lawyers representing the Barbadians, led by main plaintiffs including former Supervisor of Insurance Wismar Greaves have told the Court of Appeal for Ontario in their last ditched effort to get the Bajans a big pay day.
An April 16, 2013 appeal argument provided to Barbados TODAY contained heavy criticism of both Manulife and the trial judge. Manulife has to issue its response by September 15. The Barbadians want the appeal court to vary Newbould’s August 2012 decision in a number of ways, including ordering the Canadian company to “pay into a fund the sum of ($157.8) million plus interest to be determined to be held until the claims process is completed”.
This was in addition to stating that “Manulife owed a duty of care to the class … (and) Manulife breached the required standard of care and was negligent”.
“In this case, Manulife has failed to advance a convincing policy reason why it should escape liability for the harm it caused to its Barbados par policyholders. No public good or interest is advanced by letting an insurance company run roughshod over the rights of its part owners,” the court factum stated.
“Any concern regarding the ‘intrusion of tort law’ into the business activities of insurance companies is met by the application of the reasonableness standard. It need not and should not operate to negate the very existence of the duty of care that arises from the proximity and forgeability of harm in this relationship.
“In deciding whether or not to recognise a duty of care here, the court should bear in mind that a decision that no such duty exists is essentially a blanket immunity granting a defendant carte blanche to act negligently. While in some cases there are valid policy reasons for refusing to recognise a duty of care, this is not one of them. On the facts of the present case, Manulife acknowledged its duty to its participating policyholders and the standard of care that it had to meet in transferring their policies,” it added.
The lawyers also criticised Newbould for saying Manulife should have known it was breaching the rights of its policyholders here when it sold its business to Life of Barbados in December 1996, but yet not awarding the same policyholders monetary benefits owed to them. “He [Newbould] found that instead of treating the transferring policyholders reasonably, Manulife actively worked against them.
“In the face of these findings of fact, why did Newbould J. fail to find that Manulife had breached its acknowledged obligations to the participating policyholders? Simply put, he made fundamental errors…,” the Bajans argued in their appeal. “First, he failed to distinguish clearly between duty and standard of care, which led him to exaggerate the effect on insurance companies of recognising a duty of care in this case.
“In this case, Manulife ran roughshod over the rights and interests of people who were part owners of the company and whose interests it had undertaken to protect. If there is an overriding policy issue in this case, it is that the common law should not countenance such conduct. In failing to consider this, Newbould J. erred in law,” they alleged.