One of the most challenging aspects of disability insurance claim litigation is that the case can literally turn based upon what legal standard a court chooses to apply. These cases often would be claimant victories if a Judge was decided the case on a de novo standard of review (meaning a full review of the evidence), as opposed to the abuse of discretion or arbitrary and capricious standard (which adjudicates whether the decision is supported by substantial evidence or was erroneous as a matter of law).
Numerous judges have made this point clear in their decisions, and the most recent one highlights this issue. In Curtis v. Kan. City. Life Ins. Co., a decision from the Federal Court in Kentucky, the Court ruled for the insurer, holding that the decision to terminate the claim was not an abuse of discretion. The Court commented however, that If the standard of review was de novo, the Court would be inclined to find for Plaintiff. The Court even stated that it did not like the result, but it was mandated to rule as it did.
The application of this insurer favorable standard of review has lowered the bar of acceptable claim handling, or better stated, has further incentivized insurers to terminate legitimate claims with flimsy claim handling, as there will often be sufficient information for the insurers’ lawyers to cite to in litigation to justify the claim handling under this standard of review.
Because of this, claimants must aggressively pursue their appeals with strong evidence of impairment and be able to counter each and every aspect of the claim termination. Our firm has developed a formula for success on appeals that helps us secure good results for clients without having to resort to litigation, where the landscape has become very insurer favorable.