So, you’ve gotten a letter from your insurance company denying your disability claim. The letter says you can appeal the denial — and now you must consider your options. Should you do it yourself? Should you hire a lawyer?
To address the elephant in the room: Yes, I am a disability lawyer, as well as the founder and managing lawyer at a disability law firm. If you are cynical, you may expect me to tell you that everyone should hire a lawyer!
However, having helped thousands of people in disability claims and appeals, I can tell you that hiring a lawyer is not the right choice for everyone. At Resolute Legal we believe that — with the right resources, education and support — the vast majority of people can competently handle their own disability claims and appeals, up to a certain point.
If you are considering hiring a lawyer, it is important that you understand some of the potential problems you might run into. As part of our Ultimate Guide to Disability Lawyers in Ontario, I am here to share with you five of the most common problems that I have come across with hiring a lawyer for your disability appeal:
- Hiring a lawyer may be an unnecessary expense
- You may get overcharged by the lawyer
- You may have a bad fit with the lawyer
- Lawyers can take longer to do the appeal than if you do it yourself
- You will lose some control over the appeal
Let’s look into each of these in more detail.
Hiring a lawyer may be an unnecessary expense
With the right guidance and resources, you may be able to win your claim or appeal on your own; it may not be necessary to incur the expense of hiring a lawyer. This won’t always be the case, so it is important to know the situations when you are most likely to be successful on your own.
There are certain situations when you are more likely to be successful on your own:
- You are doing the initial application
- You are doing the first internal appeal
- Your claim has never been approved
- Your claim was denied, but the insurance company has identified very specific information they need to see to reconsider it
Now, there are also situations when hiring a lawyer makes the most sense — situations where it would be virtually impossible for you to win the appeal without one. It makes more sense to get a lawyer in the following situations:
- The insurance company has already denied your application and one or more appeals
- The insurance company denied your claim based on online or video surveillance it did of you
- The insurance company is denying your claim based on a pre-existing condition or other exclusion clause in the policy
- The insurance company denied you after paying a lot of money for assessments or medical opinions about you that it views as favourable for them
- The insurance company denied you at the point when your claim changed covering disability from your “own” occupation to “any occupation”
How to avoid an unnecessary expense
Do an honest and realistic assessment to determine if you are in a situation where you have a good chance of winning the claim on your own. If you are going to represent yourself, make sure you take enough time to educate yourself and to prepare your claim or appeal effectively. You can find self-help articles and resources on this website and elsewhere on the internet.
If you determine that you are in a situation where your chance of overturning the appeal decision on your own is slim to none, you might want to seriously consider hiring a lawyer.
You get overcharged by the lawyer
As you may imagine, overcharging is a touchy subject for lawyers to write about. If I’m being honest, there is always a risk of being overcharged when you hire any professional — including lawyers. Reasonable people will not always agree when overcharging has happened, so unfortunately it is not a black and white issue.
A lawyer may agree to represent you on a no-win, no-fee basis. This is the most common fee arrangement lawyers use for disability appeals involving lawsuits. With no-win, no-fee (or “contingency fee”) agreements, the lawyer’s fee is based on a percentage of the funds paid by the insurance company as part of a one-time settlement or approval of benefits. The fee percentages can range from 25% to 33.3%, plus HST.
The fee percentage represents the maximum amount the lawyer can charge you. A lawyer is not allowed to blindly charge you whatever fee results from the percentage. No matter the percentage set out in the agreement, the lawyer is only allowed to charge a fee that is reasonable in the circumstances.
Each province has strict rules covering contingency fee agreements because of their potential for misuse and overcharging. Part of these rules is a list of factors to consider when determining if a fee is reasonable in a contingency situation. If the percentage would result in an unfair or unreasonable fee, the lawyer has to lower the fee so it is reasonable.
Overcharging can certainly happen if the lawyer charges a contingency fee, based on the percentage, that is unreasonable in the circumstances. I find that many consumers try to limit this risk by negotiating lower percentages upfront; however, that may not be the best way to protect yourself.
Another way people can get overcharged is when the lawyer does not negotiate for costs to be paid to the client, or simply applies their legal percentage to the costs payment amount. Legal costs are paid in legal appeals or lawsuits as part of a settlement or awarded to the successful party — either you or the insurance company. Courts have been very clear that lawyers must pay the costs payment directly to the client as an offset for their legal fee. Sometimes lawyers will say that no costs were paid because the insurance company made an all-inclusive offer. This is often hogwash. It is easy for a lawyer to determine what portion of the all-inclusive settlement should be attributed to legal costs.
How to avoid getting overcharged
Don’t focus only on the upfront fee percentage the lawyer is offering — 33.3% vs 30% vs 25%. Instead, focus on whether the fee being charged at the time of settlement is fair based on the rules of professional conduct.
For example, you may pay less under the 33.3% agreement if the lawyer adjusts the fee to be fair in the same situation where blindly applying a 25% fee would result in an unfair fee under the rules. Insist that your lawyer negotiate for legal costs (to be paid to you) and that the costs payment be carved out of any “all-inclusive” settlement offer.
You have a “bad fit” with the lawyer you hired
Have you ever rushed into a relationship with rose-coloured glasses, only to realize later that you are in a bad relationship? When you choose a lawyer, you are getting into a long-term relationship with that person and their law firm. Hiring a lawyer who is a bad fit can be stressful and sometimes cause delays that will cost you extra to fix.
Common areas for bad fit include:
- You have a personality clash with the lawyer
- You disagree on legal strategy
- You disagree on negotiation strategy
- You disagree on how communications and meetings should happen
- The lawyer won’t help you with other disability-related legal issues (human rights claims, wrongful dismissal from employment, etc)
While it is possible to change lawyers, it is not always easy or practical to do so. You often have to pay the lawyer you are leaving, even if you had a no-win, no-fee agreement with them.
How to avoid having a bad fit with your lawyer
Don’t rush into anything. Take the time you need to choose someone who you mesh with. Do your research and talk to more than one lawyer. Make sure you can verify the lawyer or law firm has experience with disability claims. Don’t just go with the lawyer that a trusted friend recommends. Don’t choose your lawyer based only on a television or radio ad. Discuss with the lawyer the strategy they would propose for your appeal so you have a better idea of what you are getting into.
Lawyers can take longer than doing it yourself
At the initial claim and internal appeals stages, it is likely you will be able to do the appeal faster than a lawyer can do it for you. So, if you have a good chance of winning on your own and time is a major factor, you may be able to get the appeal done faster if you do it yourself.
On the other hand, just because you can get the appeal done faster does not mean you will be successful. Sometimes, taking a bit longer to do a better job can result in a faster result overall.
The speed for processing your appeal can vary widely between lawyers based on the following factors:
- How busy the lawyer is with other claims that are ahead of yours
- How booked up the lawyer is for other meetings and appeals
- The operational efficiency of the law firm
- How comprehensive the lawyer is in preparing the appeal
- How long it takes to get copies of critical records like your medical files, reports from doctors, and the insurance company’s claim file
How to avoid this problem
Just like when you decide if a lawyer is an unnecessary expense, do an honest and realistic assessment of whether you have a reasonable chance of success in doing your own appeal. If so, go ahead and do the appeal because you may be able to get a faster result!
However, if you are in a situation where getting approved on your own is unlikely, then getting a lawyer involved sooner rather than later will reduce the overall time to a potential claim approval.
You will lose some control over the appeal
When you hire a lawyer you are giving up some control of your appeal. This is usually a good thing, but you can also run into problems.
Problems with control can obviously happen if your lawyer is a bad fit, as explained above, and you disagree on case strategy or simply have clashing personalities.
But the biggest problem I have seen is when people limit their appeal options after hiring a lawyer.
Ideally, you should always have all options on the table for how to resolve your long-term disability appeal. Some lawyers will limit your options based on the services they provide. There is nothing unethical about this, as long as the lawyer makes this know at the time you are hiring them.
For example, some lawyers will only agree to do your long-term disability by lawsuit, and only if you agree upfront to seek a one-time lump sum settlement rather than an approval and monthly payment of disability benefits.
While I strongly disagree with this approach, there is nothing wrong with it if your exclusive goal is to negotiate a one-time payment.
The problem here is that your goals may change. What if, after learning more, you realize an approval of benefits would be a better result for you? What if the insurance company doesn’t make what you consider to be a reasonable settlement offer? If you agree upfront that the only acceptable outcome is a lump sum settlement, then you have closed off your options. If you want to change your goal, you may have to hire a new lawyer and incur the costs for changing.
How to avoid losing control over your appeal
The easiest way to avoid this problem is to be wary of hiring a lawyer who forces you to choose between settlement and claim approval at the outset. Even if that is your goal, it is better to keep your options open. Such a settlement would be far less than you expect. What if there are important pension, employment, or other medical plan issues you didn’t consider that would be negatively affected by a lump sum settlement?
If this has cleared some things up for you and you are considering moving forward with hiring a lawyer, we recommend you download our 7-Step Guide to Hiring a Lawyer for Your Disability Appeal.