The defendant’s strategy had also been known and approved by middle and senior management. Nonetheless, the insurer held on to its arson theory and relied on the help of an aggressive and confrontational legal counsel. The ratio in the Whiten case was 3:1 ($1 million punitive vs. $345,000 compensatory). During the 20th century, Canadian courts remained modest in their punitive damage awards against an insurer for acting in bad faith. She defends individuals and companies against claims for personal injury, particularly claims involving complex medical issues, brain injuries, auto-immune diseases and psychological and psychiatric claims. In our view, the case for imposing a cap in cases of negligence causing economic loss is not made out here either. 108 (SCC)), it was agreed upon that the $100,000 cap would be adjusted at the rate of inflation to determine the upper limit at the time of trial. Given the ruling in the Lee case, the “rule of law” on the upper limit cap does not seem to be in jeopardy at the present time. The plaintiff in this case was a university student who was suspected by her professor to be a child sex abuser. The lawyer was awarded $300,000 in general damages. (2nd) 61 (BCSC)). 229 (SCC) [Andrews]; Thornton v. School District No. British Columbia, Canada: Court of Appeal Sets Aside Aggravated Damages Award in Wrongful Dismissal. Canada: Case Brief: On Punitive And Mental Distress Damages For Harassment In 2012, we reported on an Ontario jury award of approximately $1.5 million damages to a 42-year-old former assistant manager who resigned her employment at Wal-Mart after being verbally abused and … Traditionally, contractual damages were awarded for … 79 at p. 29 [ter Neuzen]). It appears they will continue to do so in the foreseeable future. 30 [S.Y. No. Interestingly, the court in Whiten chose not to follow the U.S. Supreme Court’s model of using a 1:1 ratio between compensatory and punitive damages. No. The cap established for non-pecuniary damages, adjusted for inflation, is currently near $360,000, but only for the most severe cases. Had the insurance company been responsible for the entirety of the plaintiff’s psychiatric symptoms, an appropriate award would have been approximately $70,000 to $80,000. ]): There is no evidence before us that this type of case has any impact on the public purse, or that there is any crisis arising from the size and disparity of assessments. (3rd) 266 (Ont. Such damages may arise where the employer attacks the employee’s reputation, misrepresents the reason for the dismissal, or terminates the employee to deprive them of a particular right, such as … Non-economic damages are psychological and can’t be quantified. The awarding of non-pecuniary damages in a civil action is by no means unique to Canada. 287 (SCC) [Arnold]) (the “Trilogy”). We will discover how the rule has been treated in subsequent cases and predict how it will likely fare in the future. It is challenging to determine compensation for such cases because there are non-economic damages. Since the Trilogy, the Supreme Court of Canada has exempted the application of the upper limit cap in particular types of cases. Levy and Monty Verlint on. It must not deny coverage or delay payment in order to take advantage of the insured’s economic vulnerability or to gain bargaining leverage in negotiating a settlement. It is in this area that awards in the United States have soared to dramatically high levels in recent years. The rulings have had longstanding social implications. Save in exceptional circumstances, this should be regarded as an upper limit of non-pecuniary loss in cases of this nature (Andrews at p. 21). Justice Acton, a judge on the Saskatchewan Court of Queen’s Bench, handed down punitive damages totaling $4.5 million and aggravated damages of $450,000 against two insurance companies (Branco v. American Home Assurance Company, 2013 SKQB 98 [Branco]). The trial judge lowered the jury award to the upper limit as suggested under ter Neuzen, which amounted to $294,000 after it was adjusted for inflation. Damages may be awarded in other headings to provide equality in the amount of compensation a plaintiff receives in a negligence case. The plaintiff suffered severenervous shock and emotional distress when he witnessed his wife and three children caught in a fire and explosion which destroyed their house. Mental anguish lawsuits seek damages for the pain and suffering resulting from another person’s negligent or intentional conduct. The courts recognize emotional distress as a type of damage that can be recovered through a civil lawsuit. The Court found that the claims examiner denial of benefits was severely flawed as “she was looking for reasons to deny coverage, even to the point of manufacturing reasons, rather than trying to find a basis in the evidence for paying the claim”. 274 (Ont. If you have suffered emotional distress, you are entitled to compensation for your distress and the physical and mental injuries suffered. AIG’s actions established a pattern of abuse as punitive damages of $60,000 had previously been awarded against AIG for undertaking a similar action in another case. Automobile accidents; 2. Currently, the range for punitive damages in Canada is between $50,000 to $1 million. The BCSC trial Judge concluded that the Defendant did terminate the Plaintiff’s employment wrongfully, and the Plaintiff was also successful in a claim for aggravated damages (for mental distress) in the sum of $30,000. S.C.)). Notably, the Court held that had the insurance company’s conduct only marginally aggravated the plaintiff’s symptoms. 595, 2002 SCC 18 [Whiten] explained the role of punitive damages in bad faith claims: An award of punitive damages in a contract case, though rare, is obtainable. “Everyone in Canada, wherever he may reside, is entitled to a more or less equal measure of compensation for similar non-pecuniary loss” (Andrews at pp. The more devastating the loss, the more the insured may be at the financial mercy of the insurer, and the more difficult it may be to challenge a wrongful refusal to pay the claim. Mental Distress and Punitive Damages In citing the Supreme Court of Canada Fidler decision, which sets out the rationale for mental distress damages caused by breach of a disability insurance policy, the Court awarded mental distress damages of $30,000 and another $30,000 for punitive damages. No other provincial appellate court or Supreme Court of Canada decision since Fenn has upheld an award of non-pecuniary damages above the trilogy’s upper limit cap because the plaintiff experienced more pain and suffering than the plaintiffs in the trilogy cases. Slip-and-falls or trip-and-falls; 3. Claims examiners are required to weigh the totality of the medical evidence against the insurance policy requirements; A claims examiner cannot deny coverage on the basis of a test, such as “significant and prolonged impairment”, if such a test is not found in the definition of Total Disability set out in the insurance policy; A delay in payment of a disability claim may be sufficient to warrant mental distress compensation. One such case where the cap did not apply involved injuries resulting from the defamation of a lawyer by the Church of Scientology (Hill v. Church of Scientology, [1995] 2 S.C.R. See our article: “Frequently Asked Questions regarding Canada Pension Plan Benefits”. Only time will tell whether the Canadian courts will limit the maximum amount of punitive and aggravated damages awarded in the future. In contrast, aggravated and punitive damages in bad faith claims have not been limited by the courts. The exception to this rule is in cases where the purpose of the contract was to offer “peace of mind” such as a vacation holiday package or an insurance contract. Torts can be intentional or unintentional. Doe claimed damages from Etihad for physical injury, emotional distress, and mental anguish. A breach of the contractual duty of good faith was thus independent of and in addition to the breach of contractual duty to pay the loss. (3rd) 16 (Ont. The tort of intentional infliction of mental suffering has existed in Canada for many years. We will review the history behind bad faith claims in Canada and analyze the current amounts which Canadian courts have been awarding for punitive and aggravated damages. Chastain v. U.S. Dep’t of the Navy, EEOC Appeal No. The range for aggravated damages is between $10,000 and $100,000, and the range for punitive damages is between $50,000 and $1 million. 2139 (Ont. These situations created inequality which breached Charter values and rights. The obligation of good faith dealing means that the insured’s peace of mind should be the insurer’s objective, and the insured’s vulnerability ought not to be aggravated as a negotiating tactic. As such, the denial of the claim was arbitrary. The case involved damages being sought on behalf of the Plaintiff for being wrongfully dismissed. The purpose of an award of damages in a wrongful dismissal action is to compensate. Consequently, Justice Dickson for the Supreme Court of Canada imposed a conservative upper limit on non-pecuniary damages: I would adopt as the appropriate award in the case of a young adult quadriplegic like Andrews the amount of [CDN]$100,000. This area is open to widely extravagant claims. The role of punitive and aggravated damages has been particularly important in the context of bad faith claims made against insurance companies. As a breach of the duty of good faith is a separate actionable wrong, it is not dependent on the claim for coverage or compensation under the insurance policy. The decision not to follow a ratio for determining punitive damages opens the door for much higher punitive damage awards in the future. You may also be able to recover punitive damages against your abuser as in two cases discussed above: $10,000 in … The court reasoned that the plaintiff suffered substantially more pain than the plaintiffs in the trilogy cases and thus qualified as an exceptional circumstance. A decision by an insurer to refuse payment should be based on a reasonable interpretation of its obligations under the policy (Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30). S.C.J. S.C.J. Justice Acton believed the $1 million award in Whiten was not sufficient to capture the attention of the insurance industry and hoped a larger award would help them “recognize the destruction and devastation that their actions cause in failing to honour their contractual policy commitments to the individuals insured” (Branco at para. The Court also noted that the claims examiner’s notes do not give any weight to the fact that the plaintiff’s disability was recognized by Canada Pension Plan Disability benefits. These “non-pecuniary losses” are often referred to as “emotional distress damages.” There is no standard form or equation for calculating emotional distress damages, except that the award should reflect the nature and severity and duration of the harm suffered. The court’s fear was partially grounded on the developing landscape of non-pecuniary damage awards in the United States. The landmark decision determined conclusively that evidence of a “recognized psychiatric injury” is no longer required to substantiate an award of … Justice Acton showed an immense amount of disapproval for the actions of the two insurance companies. An example of the inflation adjustment can be seen in a 2012 British Columbia Supreme Court case, where the judge noted at the time that the upper limit for non-pecuniary damages in Canada for negligently caused injuries was just over $342,000 (Clost v. Relkie, 2012 BCSC 1393). (1996), 78 B.C.A.C. Moreover, the Court awarded damages for mental distress in the amount of $30,000 and punitive damages of $30,000. Economic damages include loss of property, inability to work, impact on professional abilities, and more. Raising the Limit of Punitive and Aggravated Damages. As a body of jurisprudence emerges, courts rely on previous case law to determine the appropriate award. Non-pecuniary damages were not, in the direct sense, compensatory in nature as no amount of money can replace the pain and suffering of the plaintiff. Suing for emotional damages, or “pain and suffering,” has long been a routine tag-on in personal-injury cases. (3rd) 266 (Ont. Given that the calculation of non-pecuniary damages is not an exact science, the Supreme Court of Canada feared that an escalation of these damages would arise from the case law and would subsequently be followed in the future. 46). The presence of these attributes provided the potential for an increasingly substantial and excessive amount of damages to be awarded. She is also Vice Chair of DRI International for the Defense Research Institute. Bell Mobility was found vicariously liable for the torts committed by Ayotte. Until the year 2000, the highest amount awarded was $20,000 (Evans v. Crown Life Insurance (1996) 37 C.C.L.I. In 1996, Canadian courts began awarding aggravated damages against insurers. can i sue for emotional distress in Canada. In Quach v.Mitrux Services Ltd., 2020 BCCA 25 (Quach), the British Columbia Court of Appeal overturned the trial court's decision to award aggravated damages to an individual whose job was terminated before his employment began because the manner of dismissal did not cause the requisite "mental distress. By Rhonda B. Vancouver, British Columbia V6B 2L3 Furthermore, non-pecuniary damages did not violate equality rights as it was not meant to fully compensate the plaintiff for all the injuries sustained. Her husband claimed loss of consortium. In 1995, the $100,000 upper limit was further solidified when Justice Sopinka, writing for the Supreme Court of Canada, stated that the upper limit was to be a “rule of law” (ter Neuzen v. Korn, [1995] S.C.J. 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