On February 8, 2008, the Court of Appeal of Québec increased to $125,000 the award of exemplary damages against the Penncorp Life Insurance Company for filmed surveillance deemed inappropriate and abusive. There seems to be a trend emerging in the courts, prompting the awarding of higher damages for invasion of privacy, as confirmed by the recent Superior Court decision, Tremblay v. Compagnie d’assurance Standard Life, rendered June 3, 2008.

Factual Context

Serge Tremblay and his wife Sylvie Dallaire, on their own account and on behalf of their two daughters, are requesting damages from Standard Life for abuse of right, bad faith, violation of their privacy rights and unlawful interference with their rights protected by the Charter of Human Rights and Freedoms (the “Charter”).

Serge Tremblay has been a rehabilitation therapist at the foyer Beaumanoir since 1980. He is insured under the terms of the group insurance policy of Standard Life Assurance Company (“Standard Life”). Following an accident, Mr. Tremblay experiences various health problems linked to his work. Since 1996, he is considered disabled in the performance of the tasks related to his job. Therefore, his employer pays him the first 24 months of disability benefits, as provided for under the insurance policy. Subsequently, Standard Life pays him a monthly disability pension as provided for under Mr. Tremblay’s insurance policy, for the years 1999 and 2000.

Towards September 1999, Standard Life begins to harbour certain doubts about the degree of Mr. Tremblay’s inability to carry on his occupation (total or partial). Indeed, Mr. Tremblay had expressed concern to Standard Life analysts that his disability might prevent him from working in any occupation. Following these remarks, Standard Life requested that a medical consultant reexamine Mr. Tremblay and his file. This medical consultant expressed his disagreement with the disability diagnosis, and this in spite of an additional medical examination by another physician supporting the diagnosis.

Despite a consensus by all physicians having examined the insured to that date, the medical consultant notes inconsistencies in the intensity of symptoms reported by Mr. Tremblay. The consultant recommends that surveillance be conducted. Standard Life then hires private investigators to conduct surveillance of Mr. Tremblay and his family. The surveillance took place on five occasions, in the months of September, October and November 1999, then in June and July 2000, and finally in December 2000.

The Surveillance of Mr. Tremblay and his Family.

In the first two surveillances, the investigators observe Mr. Tremblay from a car parked near his residence and follow him in his comings and goings, filming everything. A third surveillance is eventually carried out. At this time, no physician or medical consultant had yet viewed the tapes of the first two surveillances carried out by Standard Life. It is only around February 2000 that a physician would see the surveillance reports and recommend a fresh neurological assessment to be carried out by the neurosurgeon Dr. Francoeur.

During the filming of the 2nd surveillance, the investigators mistook Mr. Tremblay’s brother for Mr. Tremblay, causing Dr. Francoeur’s July 2000 report to be based on the actions of Mr. Tremblay’s brother (even though Mr. Tremblay was also in the video). In this report, Dr. Francoeur comes to the following conclusion: Upon receipt of this report, all additional indemnity payments to Mr. Tremblay should cease. This report is unequivocal in its conclusions that Mr. Tremblay’s alleged pain was subjective and unfounded. Dr. Francoeur advises Standard Life to show the videos to all of its claims appraisers as well as to Mr. Tremblay himself to confront him. However, Standard Life ignores this recommendation and decides not to reveal the existence of the video. It orders two new surveillances in July and December 2000 to add to the evidence of the case.


According to the Court, the question here is to ascertain whether the surveillance was justified in the context of the investigation carried out to determine if Mr. Tremblay qualified for one of the benefits offered by the insurance policy.2 Proceeding to a summary review of case law in the matter of privacy rights, the Court confirms the following principles:

  • The right to privacy follows the individual. A person remains in the context of his private life when he is on his own property, moving in the street and going about his occupations, and this, even in a place that is visible to the public. He holds the right at all times to not be observed or systematically followed. 
  • The right to privacy is not absolute and may be forced to yield in certain circumstances, such as in the context of an investigation held legitimately and legally by an employer or other contracting party. There must be a balance present between private life and the search for truth. Logically, an investigation must be justified by serious reasons, which may not be created a posteriori, in other words, after the surveillance in question. 
  • Lastly, a sort of proportionality test applies, that is to say that the person conducting the surveillance must take into account other methods that are available or that are less detrimental to privacy rights. 
  • Regarding the issue of an intentional and unlawful interference, a state of mind that implies a desire or intent to cause the consequences of wrongful conduct or a full knowledge of the immediate and natural or at least extremely probable consequences that conduct will cause, must be present in the guilty person or party for the Court to be able to conclude to such an interference.

Context of the Insurer-Insured Relationship

According to the Court, these principles, transposed to the insurer-insured relationship, allow one to establish that if serious and reasonable causes raise doubts about the honesty of the behaviour of an insured person, and that there is no other alternative for verifying this behaviour, then an insurer has the right to proceed with a surveillance, taking care to limit this intrusion so as not to interfere with the dignity or the reputation of the person in question as well as the privacy of the person and his family.

In this case, the company hired by Standard Life to conduct the surveillance described the assignment as being a verification of whether Mr. Tremblay was truly incapable of holding any given employment, in light of the two contradictory medical assessments. The Court notes the absence of such a contradiction and affirms that there was nothing more than Mr. Tremblay’s statement to a physician that the cervical pain had disappeared, although he had stated to analysts and insurance representatives that the pain was still present. This variation in the intensity of symptoms had been noted by Standard Life’s medical consultant. The Court concluded that the situation should have warranted a request for explanation from the attending physician, and not a surveillance.

Conclusions of the Court

According to the Court, Mr. Tremblay’s contradictory comments should have led to a request for explanation from the attending physician instead of raising suspicions regarding Mr. Tremblay’s honesty. Standard Life preferred to attribute this contradiction to a differing declaration by Mr. Tremblay to justify his surveillance. The court judges that the principles developed in case law allowing for the justification of an infringement of the right to privacy were not met. The assignment given to the investigators was not justified by any contradiction in the medical assessments and the investigators had no medical competence or expertise with which to evaluate whether Mr. Tremblay was in fact disabled from all employment. The investigator’s report does nevertheless arrive at this conclusion, which the Court believes could only have negatively influenced the Standard Life analyst.

Furthermore, with regards to the 4th and 5th surveillances, they were ordered after the receipt of Dr. Francoeur’s report, which was based on the video of the 2nd surveillance, in which there was a mistaken identity. This error was a determining factor in Dr. Francoeur’s medical assessment and his conclusions. The Court judges that the sole preoccupation of Standard Life was to build strong evidence, without regard for the consequences of the violation that these actions inflicted on Mr. Tremblay’s private life. According to these reasons and the facts in this case, the court concludes the following:

  • Standard Life committed an error in ordering the first two surveillances without substantive reasons, resulting in a violation of Mr Tremblay’s right to privacy without however attacking his dignity or reputation, due to the absence of significant intrusion into his private life. The fact that there was an error of identity led to Mr. Tremblay being attributed actions that were not his own, actions that exceeded the functional capacities described by his physician. This error caused Mr. Tremblay to lose all credibility with Standard Life. From then on, Standard Life managed his file in such a way as to establish this fact. This error interfered with the dignity of the claimant, and dignity is understood by the Court to refer to the respect and consideration to which every person is entitled. 
  • With regard to the 3rd surveillance, the Court judged that Standard Life could not justify it by simply indicating that it wanted to verify the activities of October 23rd when the claimant’s identity was mistaken. None of Mr. Tremblay’s true actions conflict with his functional limitations. The Court judged that the infringement on Mr. Tremblay’s dignity sustained as of this third surveillance results from the fact that Standard Life no longer hesitates to systematically place Mr. Tremblay under surveillance given that he is no longer deemed credible. 
  • With regards to the 4th and 5th surveillances, the Court adds that, in its opinion, from that moment onwards, Standard Life commits an abuse of rights and an attack on Mr. Tremblay’s dignity, because it possess Dr. Francoeur’s expert recommendation to confront Mr. Tremblay and it deliberately refuses to do so.

The court decides to award Mr. Tremblay a total of $70,000 in moral damages. This is explained first and foremost by the infringement of privacy rights and personal inviolability and the resulting psychological injury, as well as by the attacks on Mr. Tremblay’s dignity, reputation and honour. Furthermore, the Court judged that the initial harm was exacerbated by Mr. Tremblay’s discovery of the surveillance to which he was subject. The troubles, inconveniences and loss of enjoyment of life that Mr. Tremblay suffered were also considered. Lastly, according to the court, the evidence showed that Mr. Tremblay has not fully recovered from having been perceived and treated as a liar and a manipulator and that he underwent psychological stress due to this attack on his dignity.

The court decided to award Mr. Tremblay a total amount of $100,000 in exemplary damages, concluding that Standard Life had acted in full knowledge of the immediate and natural, or at least extremely likely, consequences of its conduct, and that its conduct was even more reprehensible during the last three surveillance periods that had no other purpose than to further document its case. The court therefore determined the damages payable to be $35,000 for the first three surveillances. With respect to the 4th and 5th surveillances, the court deems it justifiable, for deterrence purposes and in light of Standard Life’s substantial financial resources, to impose $40,000 in exemplary damages. Lastly, according to the court, Standard Life’s most reprehensible behaviour consisted in the fact that they did not follow the recommendations of the physicians about revealing to Mr. Tremblay the results of the October 1999 surveillances, and then by the release of a truncated medical report in which Dr. Francoeur describes Mr. Tremblay as a manipulator. The Court judged that $25,000 in exemplary damages should be imposed on Standard Life for these actions.

Finally, the Court awarded $25,000 as moral damages to Sylvie Dallaire, Mr. Tremblay’s wife, for the loss of the enjoyment of life, troubles and inconveniences caused by Mr. Tremblay’s increased anxiety after reading Dr. Francoeur’s report.

The Court also awarded $1,500 in moral damages to Sylvie Dallaire and Serge Tremblay as tutors of their two minor children for having been deprived of the attention of their father during the events in question.

The Court of Appeal will have the opportunity to confirm or not the position it took concerning the Penncorp ruling and took again concerning this decision, regarding this new trend that the courts seem to have adopted regarding privacy rights and the damages awarded for invasion of privacy. The permission to appeal these proceedings was granted on July 24, 2008.