DAILY NEWS Oct 24, 2007 4:55 PM - 0 comments

Canada's legal culture will prevent "excesses" of U.S. legal system: Swiss Re seminar

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Canada’s insurance industry is not in danger of seeing the same kinds of wild personal injury and product liability lawsuits launched in the United States, based on a number of reasons related to Canada’s legal system and culture, a panelist told Swiss Re’s 2007 Casualty Seminar in Toronto.
“It’s my firm belief that I don’t think we will ever see some of the excesses that [panelist] Tony [Mormino, Swiss Re’s senior legal counsel] described,” said Kathy Ricketts, vice president of casualty underwriting for Swiss Reinsurance Company Canada.
Ricketts was referring to a presentation by Mormino, in which Mormino referred to slides of cases sourced in The True Stella Awards, by Randy Cassingham.
Mormino’s slides showed a number of seemingly outrageous personal injury and product liability cases launched in the United States, including a US$862-million defamation suit against Michael Jordan and Nike co-founder Phil Knight for personal injury because the plaintiff “found it distressing to look like and be confused with the basketball star.”
Mormino noted punitive damage awards in the U.S. are now expected to enter a relative realm of rationality, because the U.S. Supreme Court has recently found that punitive damages cannot exceed compensatory damages by more than a single-digit multiple.
Plaintiff’s lawyers in the U.S. have responded to the U.S. Supreme Court’s ruling by trying to obtain larger general damage awards in lieu of punitive damages, Mormino noted.
But in Canada, the judiciary is more conservative, Ricketts observed. She noted the Supreme Court of Canada has capped general damage awards at roughly Cdn$100,000, indexed to inflation. [Today, the value would be roughly $320,000.]
Ricketts added that Canadian court awards, while they are getting higher, would never approach those in the U.S. for the following reasons:
• Canadians, unlike U.S. citizens, have universal health care and are thus less likely to be ruined by medical claims (and are therefore less likely to have to sue to recover their medical costs);
• Canadian judges are appointed, not elected, and therefore Canadian courts are somewhat insulated from pressure to make decisions that will appeal to the electorate (i.e. policyholders).
• The outside limit for punitive damages against an insurer in Canada is thus far about Cdn$1 million. To approach this kind of award, the defendant’s conduct would have to be demonstrably “vindictive,” “reprehensible,” and “malicious.”
• There is more of an emphasis on bench trials in Canada, as opposed to jury trials in the United States.

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