Legalization of Marijuana in Canada & Long Term Disability Claims

It is now old news that Canada has become the 2nd country in the world to legalize marijuana, as noted in this CNN article. The Canadian government has done this in order to normalize the market for marijuana and to allow the Canadian economy to benefit from this new legal market.

Legalization has created a significant demand for legal services to address the numerous issues for society at large, as noted in a recent article by Jim Middlemiss in Canadian Lawyer magazine.

Canadian Marijuana Legalization

While the feeding frenzy in the business world ramps up, society is trying to grapple with how to deal with cannabis use in the workplace. While cigarette smoking and alcohol consumption are legal, the consumption of these products continues to be regulated and restricted in public spaces and workplaces. Policies and new laws to deal with consumption and impairment will likely be required to address an individual’s right to use cannabis versus the impact it has on social interaction and workplace behaviour.

So, how will marijuana legalization be dealt with for those making a disability claim? Medical marijuana has been something that disabled people have been turning to for some time, and where it is prescribed and sanctioned by medical providers, its’ use has generally been accepted by insurers for those dealing with disabling medical conditions, such as chronic pain.

Marijuana & Disability Policies

When it comes to addiction and substance abuse, most disability insurance policies have exclusion clauses to preclude recovery of disability benefits when the disability is a result of an addiction that has gone untreated. Like alcohol and cigarette smoking, legalization of marijuana does not mean that there are no health risks related to its consumption, as noted on the website of the Canadian Centre on Substance Use and Addiction.

An example of an exclusionary clause from a disability insurance policy can be found in the B.C. case of Tanious v. Empire Life Insurance Co.,[i]:

No Long Term Disability Benefit is payable for disabilities that result from alcohol, drug or other substance use disorder, unless the Insured Employee is receiving and complying with continuous treatment for such Total Disability from a rehabilitation centre, a provincially designated institution, or is actively involved in and following a program of rehabilitation which is supervised by a Physician and approved by the Company.

Successful In Recovering LTD Benefits

In this case, Ms. Tanious’ claimed disability benefits based on her multiple sclerosis, however, she was also a crystal meth user and Empire Life took the position that it was her crystal meth addiction that was disabling and not her MS. The Court ultimately ruled that the proximate cause of her disability was her MS and her crystal meth usage was impacted by her medical diagnosis (she was using crystal meth to “self-medicate”). She was successful in recovering her LTD benefits and also received a $15,000 award for mental distress. The case provides an interesting review and discussion regarding issues of illicit drug use in the context of an underlying severe and debilitating medical condition. The bottom line is that in appropriate circumstances, a claimant can overcome the substance abuse exclusion.

In general, where the disability claim is based on addiction, whatever the substance, whether legal or not, it is important to appreciate and understand the requirement to be under appropriate care and rehabilitation to address the addiction. I expect the even with the legalization of marijuana, claims with an element of substance abuse will continue to be adjudicated by insurers as they have in the past.

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2016 BCSC 110, 2016 CarswellBC 160 @ paragraph 18

2016 BCSC 110, 2016 CarswellBC 160, 2016 C.E.B. & P.G.R. 8164

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