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Could trial lawyers take a run at a 40-year-old cap on pain and suffering awards?


July 4, 2019   by Greg Meckbach




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A 40-year-old, Canada-wide cap on pain and suffering awards could be out of date, a personal injury lawyer suggests.

The Supreme Court of Canada imposed a $100,000 cap on awards for non-pecuniary damages in 1978, as the personal injury law firm Himelfarb Proszanski reports. It was intended to put a lid on “widely extravagant” liability claims.

That cap is indexed to inflation, so in today’s dollars it is more than $350,000. It was established by three Supreme Court of Canada rulings: Teno v Arnold, Thornton v School District No. 57 and Andrews v Grand & Toy. Teno and Andrews arose from motor vehicle personal injury lawsuits while Thornton arose from a pupil injured during gym class.

Because the ceiling is strictly for non-economic losses, it does not affect things like medical and rehabilitation expenses, attendant care and loss of income.

“If you read the [1978] trilogy cases, the justification for that policy decision was that plaintiffs would get full compensation for all their other losses and that’s not true now in Ontario, especially in motor vehicle accident cases,” Allen Wynperle, Hamilton-based president of the Ontario Trial Lawyers Association, said in a recent interview. Caps and deductibles set by provincial legislation are among the reasons he cites.

If a judge today were to agree with Wynperle and make a precedent-setting ruling that lifts the cap set in 1978, this could affect the severity of liability insurance claims because non-pecuniary damages could rise well above $400,000.

The rationale for the ceiling was that plaintiffs would get compensated for economic losses under heads of damages other than pain and suffering, Wynperle said. So it was not necessary to award pain and suffering damages above $100,000 in 1978 dollars.

But several other measures since 1978, which are designed to manage claims costs, may mean the rationale for the cap no longer holds water, suggests Wynperle. Once example he cites is the deductible in Ontario for pain and suffering awards from motor vehicle lawsuits.

That deductible now sits at $38,818.97, Campisi Law reports. This means if a court awards your client $39,000, that client would actually get $181.03 once the deductible is factored in.

“There are a lot of provinces that now have various restrictions on making claims similar to what is in Ontario. This is sort of a common theme of insurance law that has been amended over a number of years,” said Wynperle.

In 1972, James Andrews was riding his motorcycle in Edmonton when he collided with a van owned by Grand & Toy. Andrews was nearly 100% disabled. He was awarded more than $1 million by the Alberta Court of Queen’s Bench, but that award cut in half by Alberta’s appeal court. Most of the cut was for cost of future care, but the appeal court also reduced the pain and suffering award from $150,00 to $100,000. (Those numbers are not adjusted for inflation). That ruling on pain and suffering damages was upheld by the Supreme Court of Canada.

“There is no objective yardstick for translating non-pecuniary losses, such as pain and suffering and loss of amenities, into monetary terms,” Supreme Court of Canada Justice Brian Dickson wrote in 1978 in Andrews, explaining why the upper limit should be $100,000. “This area is open to widely extravagant claims…

“If damages for non-pecuniary loss are viewed from a functional perspective, it is reasonable that large amounts should not be awarded once a person is properly provided for in terms of future care for his injuries and disabilities,” Dickson added.

A similar ruling was made in Teno, which arose when a child was hit by a car in Windsor in 1969.

The $100,000 cap was based in part on the doctrine of joint and several liability, suggests David Williams, a partner with Harrison Pensa in London, Ont. Williams has represented both defendants and plaintiffs in lawsuits. Changing the rules for joint and several liability, currently under discussion in Ontario, may render the rationale for the cap obsolete, trial lawyers say.

Joint and several liability works this way: Say a plaintiff injured by a drunk driver sues both the motorist and the bar that served the motorist alcohol. The court finds the bar 20% liable and the drunk driver 80% liable. The bar could still be on the hook for much more than 20% if the defendant responsible for the other 80% is unable to pay the amount they owe.

Ontario Premier Doug Ford recently promised to review the joint and several liability provision in the province’s Negligence Act. This was due in part to concerns from municipalities who sometimes get added as defendants by plaintiffs who allege poor road maintenance contributed to accidents.

As it stands, the joint and several rule helps ensure that plaintiffs who are seriously injured can at least recover from someone. But if any new limits are imposed that limit defendants’ damages to only their portion of liability, that’s going to change one of the foundations for the 1978 trilogy, Williams suggested in a recent interview.

“You can be sure that inventive lawyers will go back to the Supreme Court of Canada and say, ‘Now for that injury capped at $390,000, we want to be able to recover $5 million because we can’t recover those losses in the way in which we used to,” Williams said this past March in an interview about joint and several liability reform in Ontario.

Awards for future care are meant to “provide physical arrangements for assistance, equipment and facilities directly related to the injuries,” Justice Dickson wrote in Andrews in 1978. “Additional money to make life more endurable should then be seen as providing more general physical arrangements above and beyond those relating directly to the injuries. The result is a coordinated and interlocking basis for compensation, and a more rational justification for non-pecuniary loss compensation. “