Nova Scotia Court of Appeal upholds 50% "puffery" discount on member's personal injury payout in LTD fund's subrogation claim.
April 26, 2024
The Nova Scotia Court of Appeal has dismissed a LTD fund’s attempt to reduce the 50-per-cent “puffery” discount applied to determine a disabled member’s future loss of income.
When one of its members received a settlement amount after her injury in an amusement park accident, the Nova Scotia Association of Health Organizations Long Term Disability Plan Trust Fund brought a claim for repayment of the benefits it had already paid her, as well as to determine whether any future payments could be offset.
In calculating future loss of income, the judge applied a 50% “puffery adjustment,” to account for contingencies upon which potential future income loss was predicated.
The fund claimed the puffery discount should be no more than 30% and appealed, but the unanimous three-judge appeal court panel could find no error in the application judge’s approach, noting that the puffery adjustment process is a fact-specific inquiry.
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