Damages Resulting from Fatalities

Every year in Canada there are roughly 3,000 fatal accidents, and one-third of those happen in Ontario, Jamie Dunn, partner at Blouin, Dunn LLP told delegates at the OIAA 2010 Professional Development & Claims Conference. Most of the fatal accidents involve male drivers aged 35 to 44, Dunn added at the Torontobased conference on Feb. 3.

The legal basis for claims in fatal accidents is found in the Family Law Act, part 5, section 61 — Dependants’ Claim for Damages. However, Dunn notes this heading is a misnomer because the right of dependents to sue is not actually based on dependency. There are specific classes of individuals who have a right to claim damages when someone is killed, but the courts seem to be opening up this concept of dependency, Dunn said. “It used to be under the old fatal accidents act that you had to be dependent on the deceased for support to enable you to recover damages,” Dunn said. “The courts are broadening that now.”

As it pertains to pecuniary losses, section 61 (1) of the Family Law Act — Part V states that if a person is killed by the fault or negligence of another, the spouse, children, grandchildren, parents, grandparents, brothers and sisters are entitled to recover. Again, the word pecuniary is a misnomer, Dunn says, citing a challenge by an insurer in 1980, which stated that the damages in a fatal accident are restricted to pecuniary damages, but the courts ruled that it was both pecuniary and non-pecuniary. Additionally, section 61 (2) — damages in the case of injury -was challenged by an insurer who said those damages are only for injury and not for fatal accidents, but the court of appeal said it was for both injury and fatality instances. Therefore, section 61 deals with both injury and fatal accident claims and dependants can recover both pecuniary and non-pecuniary damages, which includes an amount to compensate for the loss of guidance, care and companionship.

Pecuniary damages can be calculated specifically as there are invoices for incurred expenses. Non-pecuniary damages, on the other hand, have no invoices to show proof of financial loss.

Loss of care, guidance and companionship

“It is impossible to quantify the loss of life in monetary terms,” Dunn said, reading from a Court of Appeal decision Hechavarria v. Reale. “No amount of money could ever replace the contribution that a loved one makes to the people around him or her. The loss of care, companionship, guidance, and the very important emotional bond, cannot be calculated in dollar terms.” But the Court of Appeal went on to note that money is the only thing the courts are able to do, so they award money, Dunn added.

The courts have been pretty consistent in terms of dollars awarded for non-pecuniary damages, which makes it fairly easy for insurance companies and their lawyers to determine how much should be assessed in each individual case. While there is no cap in the amount of the award, the Court of Appeal has basically imposed a cap — a range beyond which they will not go, he said.

“Each case depends on its own factual situation, and that is what you’ll use in your negotiations with plaintiff’s counsel when trying to settle a claim,” Dunn said. “We all know that when someone dies they immediately become a saint. They could have been the biggest reprobate in the world, when all of a sudden they are dead and everybody says nice things about them. The plaintiffs’ lawyers will, of course, come forward with all of the positive things about the deceased and your job is to develop as many true facts about the deceased as you can.”

Dunn points out that insurance companies should discuss with defense counsel as to whether a jury notice to do the assessment of damages will be filed. As it relates to his own clients, Dunn’s recommendation is not to file a jury notice in a fatal case, but to perhaps look at a split jury notice: the jury is used for liability and the judge alone assesses damages in a fatal case. “The trial judge alone is constrained by previous decisions, so there is a fairly predictable range that you know the judge will be within,” he said. “A jury you can’t compel to award damages in this range and they will do whatever they want. It’s not as predictable.”

Average awards for loss of companion

When it comes to damages for loss of care, guidance and companionship awarded by the Court of Appeal, the pre-deductible averages, in 2010 figures, are:

• death of a husband: $65,000 — the highest award was in 2000 at $85,0000 which in 2010 figures would be around $100,000.

• death of a wife: $64,000 — the highest award was also $85,000 in 2000.

• death of a father: $40,000 — the highest award was $55,000 in 2003, which in 2010 figures would be roughly $62,000.

• death of a mother: $32,000 — the highest award was $35,000 ($40,000 in 2010) in 2001

• death of a child: $75,000 to $85,000 — the highest award was $100,000 (roughly $117,000 in 2010 figures) in 2001 — an award said to be at the very high end of the scale

• death of a sibling: $25,000

• death of a grandparent: $10,000

• death of a grandchild: $10,000 Under Bill 198 for damages that assess under $50,000 in Family Law Act claim there is a $15,000 deductible.

Where the money’s at

Pecuniary damages are where the real money is and trial lawyers are becoming more adept at coming up with accounting reports and heads of damages, Dunn said. In a situation where the breadwinner, or one of two breadwinners, is killed, the surviving partner or dependents have a right to claim for loss of income that they might reasonably have expected to receive if the person had not been killed. However, another concept has surfaced surrounding loss of income as it relates the survivors. In Fiddler v Chiavetti 92 O.R. (3d) 219, Debbie Fiddler claimed that after her daughter was killed in an accident she suffered a loss of income as she was unable to work. The jury awarded her $22,000 for past wage loss and $72,000 for future wage loss. The case is currently under reserve by the Court of Appeal. The defendants are seeking a new trial, or reduction of the award of damages, on the basis of inflammatory remarks by plaintiff’s counsel at trial. In this case, the court seems to say that it is not necessary for a plaintiff to be directly dependent on the deceased for income. If the plaintiff sustains a loss of income, the person is entitled to recover, Dunn said.

Loss of income

There are a number of different ways to cover loss of income. In a sole dependency situation, the dependant would be entitled to 70 per cent of the net income after taxes of the deceased — on the basis that the deceased would have used 30 per cent of their income on themselves.

In a modified sole dependency situation — where both parties are employed prior to the death — 60 per cent of the deceased’s net income after taxes is awarded to the surviving spouse. However, Dr. James Pesando, an economist at the University of Toronto, has put forward a newer method of calculating loss of income in a situation with two breadwinners. The co-or cross-dependency method uses the idea that one person can live cheaper than two. So when there is only one survivor, that person should have roughly 70 per cent of the net income of the two salaries combined. To calculate the 70 per cent, the net income of both breadwinners is added together, and then the 70 per cent is determined from the total. From there, the net income of the survivor would be deducted.

“It’s complicated, but it works out to be about 15 per cent less than the modified sole dependency number,” Dunn said. This method has been accepted in one case and rejected by two trial judges in separate cases, he added.

“When you talk settlement to the plaintiff’s lawyer, you want to talk to negative contingencies,” Dunn said. “That guy would have been d
isabled, he wouldn’t have worked to 65, look at his pre-accident medical history — he had a heart attack so he would have died before he did — unemployment, early retirement, remarriage — 50 per cent of marriages in Canada fail, so they would have been divorced anyway — they died before they got divorced, life expectancy. Those are the things you want to stress to the plaintiff’s lawyer … they bring the numbers down.”