Popping the Cap

Contributed by Phil Lord

Over 40 years ago, our Supreme Court set an “upper limit” on the amounts which can be awarded as compensation for the non-pecuniary component of a bodily injury.1 Pecuniary damages are those which can easily be quantified, such as lost wages. In contrast, non-pecuniary damages, such as pain and suffering, are not financial in nature. The upper limit on non-pecuniary damages is now an effective cap. While the interpretation of the principles first set out by the Court has evolved, the cap has enjoyed a surprising and unusual stability, even as our society has changed. The cap devalues the suffering of personal injury victims and has no theoretical underpinning. I want to preliminarily set out here my thoughts on the cap, how it is understood by our courts, and the arguments which could lead to its abolition. I look forward to further elaborating on these thoughts in a future article.

In the late 1970s, the Supreme Court heard three cases involving very serious bodily injuries: Arnold v Teno, Thornton v School Dist No 57 (Prince George) et al and Andrews v Grand & Toy Alberta Ltd. The judgments were rendered on the same day.2 In Andrews, a unanimous Court states that “the appropriate award in the case of a young adult quadriplegic like Andrews [is] the amount of $100,000” and that “[s]ave in exceptional cir­cumstances, this should be regarded as an upper limit of non-pecuniary loss in cases of this nature.”3 Considering the seriousness of the victims’ injuries, the intimation was that few, if any, injuries would justify a higher award.

The upper limit evolved into an effective cap. There has been, in 40 years, no case where a court awarded a higher amount without being overturned on appeal. The $100,000 figure has been indexed to account for inflation and now amounts to approximately $360,000.4 Courts have allowed for some flexibility in the amount awarded. They have consistently stated that each victim’s prejudice is unique. Awarding a diplegic victim half of a quadriplegic victim’s compensation would fail to consider the uniqueness of her prejudice.5

2737188217_644f76ee6d_bThe Supreme Court’s upper limit of $100,000 has effectively been turned into a cap which has been indexed to inflation. || (Source: flickr // Anita Hart)

It is worth mentioning that the cap is applied to a somewhat narrow range of damages. Courts adopt the same classification of damages as the Civil Code of Quebec, which lists three types of damages: material, moral, and bodily. The cap is only applicable to bodily injuries. The cap was, therefore, inapplicable in Cinar Corp v Robinson, a case where a company misappropriated the plaintiff’s intellectual property. The injury was moral (not bodily), so the plaintiff’s non-pecuniary damages were not capped. Similarly, in Hill v Church of Scientology of Toronto, the plaintiff was defamed. Again, as the injury was not a bodily injury, the non-pecuniary damages were not capped. Furthermore, the cap is only applicable to the non-pecuniary component of a bodily injury. Plaintiffs can recover for the pecuniary consequences of their injury: past and future lost income, cost of home care, management fees of lump-sum payments, and so forth. The cap applies only to the non-pecuniary component, often referred to as pain and suffering: pain prior to or after the injury, pain caused by lost opportunities, and so forth.

At first, capping these damages seems odd and arbitrary. How did the Court fix the $100,000 limit? Would such a figure not be for the legislature to determine?6 Why is a single type of damages capped? Adding insult to injury7 is the fact that the Court relied on the assumption that, without the cap, we risked living in an American-style system where astronomical amounts are routinely awarded for pain and suffering.8 The Court did not refer to empirical evidence to support this claim. Yet it appears that no court has subsequently challenged this assumption.

More interesting is what we can do about the cap. I posit that eliminating the cap will require attacking its logical foundations. Implicitly central to the cap’s logical foundations is the assumption that the non-pecuniary consequences of a bodily injury are, somewhat, secondary. Courts consider that the victim is already compensated for their injury through compensation for its pecuniary consequences (discussed above), such as lost income. Pain and suffering are secondary to losing one’s income source. Here are two examples. In Andrews, the Court, while discussing the unquantifiability of non-pecuniary damages, reiterates that pecuniary damages are quantifiable, adding that “the paramount concern of the courts when awarding damages for personal injuries should be to assure that there will be adequate future care.”9 Conversely, in a case of defamation, the victim’s main injury is non-pecuniary. It is the loss of her reputation. Even in Cinar, where the plaintiff’s injury was moral, the Court analogises the injury to defamation – thereby hinting at the idea that the main consequences of the injury are non-pecuniary.10

Pain and suffering are not merely secondary effects of a bodily injury, but (one of) its main consequence(s).

The most persuasive argument for the elimination of the cap would be that pain and suffering are central to a bodily injury. Pain and suffering are not merely secondary effects of a bodily injury, but (one of) its main consequence(s). Losing one’s income is as significant to the victim as the non-pecuniary aspects of the bodily injury: the excruciating pain of having one’s legs severed, the permanent loss of one’s dignity, the realisation that one will depend on others for her entire life, the years spent remembering the moments one will never again enjoy.

This argument is not just an argument against the cap. It is an argument which challenges the cap’s very foundations. If persuasively put forward, it nullifies the reasoning which appears to most often justify the cap’s existence.

For over four decades, victims of the worst imaginable injuries have been told that their pain and suffering is, quite literally, “worth up to” some $360,000. While the cap is odd and sometimes leads to almost absurd comparisons and conclusions, more scholarly attention should be devoted to its foundations, and their legitimacy. Such attention will be necessary to finally ridding ourselves of it.

Phil Lord is a lawyer and asset manager. He holds LL.B. and B.C.L. degrees from McGill’s Faculty of Law. His research focusses on social inequality, disability, private law theory, and new religious movements. His articles have been published in Arbitration: The International Journal of Arbitration, Mediation and Dispute Management, the Marburg Journal of Religion, and Directions, the Canadian Race Relations Foundation’s journal. His research can be accessed at ssrn.com/author=2790633, and he can be contacted at plord@vezno.com.

Notes

[1] I dedicate this piece to the unsung heroes of Kugler Kandestin LLP.

[2] January 19, 1978.

[3] See page 265.

[4] See e.g. Dubé v Morneau at para 14.

[5] See e.g. ibid and Stations de la Vallée de St-Sauveur inc v MA at para 79.

[6] Legislatures have had no appetite to legislate on this point following the trilogy.

[7] Pun intended.

[8] See Andrews at 261. This is unfortunately not a forum to address the Court’s other problematic assumptions.

[9] Ibid.

[10] See para 108.

 

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