Assessing non-pecuniary losses

April 2009

Assessing non-pecuniary losses

bouton-vers-francaisLaw is a constantly evolving social science. The same can be said about the assessment of non-pecuniary losses suffered by injury victims. The appellate courts put an end to the free-for-all over thirty years ago, when the Supreme Court of Canada rendered three judgments (the "Trilogy") in 1978.
 
The purpose, among other things, was to set out guidelines for awarding non-pecuniary damages, by establishing a "ceiling" ($100,000 in 1978, subject to indexation) and by attributing a single amount to all heads of non-pecuniary damages in a claim.
 
Non-pecuniary damages refer, in particular, to permanent partial disability (in terms of the loss of physical integrity, as opposed to the loss of earning capacity, the latter being pecuniary in nature), pain, suffering, inconvenience, loss of enjoyment of life, disfigurement, moral damages and loss of spousal companionship.
 
Previously, in assessing damages for permanent partial disability, the courts primarily used the point method, calculating the disability points and multiplying them by a certain amount which increased from year to year. To this sum, they added an award for pain, another award for inconvenience as well as a specific award for disfigurement, where applicable.
 
Thus, in the 1970's, a 10% permanent partial disability could be valued at approximately $10,000 namely, $1,000 per disability point.
 
In 1978, the Supreme Court established the principle that these types of awards should be determined through a more methodical and rigorous process, so as to ensure that the victim would receive full compensation and, at the same time, that the compensation would be both fair and reasonable for all the parties.

Have our courts really changed their approach since the Trilogy?

The caselaw certainly casts doubt on any such proposition. In fact, two recent Superior Court judgments seem to indicate quite the contrary.
 
Lapointe-Gendron & Al. v. Camping des Baies & Al., (judgment dated November 21, 2008)
 
A 15-year old boy seriously injured himself while diving. Although his action was dismissed, because he was unable to prove the liability of the defendants, Mr. Justice Bureau of the Superior Court assessed the quantum of damages.
 
With respect to the non-pecuniary damages, he found that there was a 6.5% permanent partial disability (PPD). He described the pain, suffering, treatments and inconvenience suffered by the victim as well as his reduced participation in various sports activities, concluding that an overall award of $65,000 was appropriate, without explaining this amount or providing any details.
 
It seems apparent that the court awarded compensation for non-pecuniary losses of $10,000 per disability point.
 
Boucher v. Thurso, (judgment dated November 20, 2008)
 
The plaintiff fell while playing hockey on a municipal skating rink. His action was dismissed, but, once again, the judge, Mr. Justice Dallaire, took the time to assess the quantum of damages [TRANSLATION]"... in the event a higher court were to rule otherwise on the issue of liability..." (which is entirely consistent with the teachings of the Court of Appeal).
 
The parties agreed on a PPD of 5%. Based on the ruling in Brière, or, rather, [TRANSLATION]"... drawing inspiration from the Court of Appeal's calculation method...", without giving any more details, the award for non-pecuniary bodily injuries was set at $50,000.
 
A quick calculation indicates that the amount awarded was equal to $10,000.00 per disability point agreed upon between the parties.
 
However, the Court of Appeal ruling (Brière v. Cyr), drafted by Mr. Justice Beauregard, is really a demonstration of a "reverse engineering" method.
 
In that case, the plaintiff had been successful at first instance and had been awarded an aggregate amount of $82,000 for her non-pecuniary damages, with a PPD of 7%.
 
The trial judge first awarded $40,000 for the loss of enjoyment of life and for pain and suffering, as well as an additional $42,000 for the PPD of 7% which he multiplied, explicitly, by $6,000.00.
 
It was the latter amount that was in dispute before the Court of Appeal. When Mr. Justice Beauregard broke down the total of $82,000 by dividing it by the victim's life expectancy, he determined that, for all practical purposes, it amounted to compensation of approximately $10 per day, until the end of the victim's life.
 
Mr. Justice Beauregard stated that he did not find the amount of $82,000.00 to be exaggerated, in light of the trial judge's listing of the problems, inconvenience, suffering and pain the plaintiff continued to endure.

What do these judgments tell us?

The assessment of non-pecuniary losses is an art, not a science. And when it comes to art, you can't please everyone. Certain parameters (the Trilogy) have been established, within which the courts attempt to explain and justify their assessments. However, there is a missing link in the reasoning of the courts: a clear and comprehensible explanation of the specific amount awarded.
 
The courts have had the following to say about their decisions: [TRANSLATION] "... drawing inspiration from the Court of Appeal's calculation method..." (Justice Dallaire); [TRANSLATION] "In light of the sums awarded..." (Justice De Grandpré); [TRANSLATION] "It is clear that each case must be determined based on its own facts and that, having experienced a similar incident, the non-pecuniary losses of one victim may differ from those of another" (Justice Beauregard).
 
Practitioners and insurers, faced with having to assess a claim for non-pecuniary damages, will therefore have to draw inspiration from the "evolving" caselaw.
 
It appears quite clearly that, the recent "Boucher" and "Lapointe-Gendron" decisions encourage an assessment of a victim's permanent partial disability, in 2009, on the basis of $10,000 per disability point, notwithstanding all the explanations and justifications used by the courts.
 
The "per point" method continues to be the basis for assessing a claim, at the very least for purposes of setting the appropriate "reserves".

This bulletin provides general comments on recent developments in the law. It does not constitute and should not be viewed as legal advice. No legal action should be taken on the basis of the information contained herein.

 

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