Friday, March 11, 2016

Damages

I recently read an American case where a sportscaster received a judgment for over $50,000,000 for the harm cause when a peeping tom took some nude pictures of her in a hotel. The hotel was at fault and had been careless in protecting the sportscaster's privacy.

I thought more about the case. The sportscaster had not lost a job or any material assets; indeed she had thrived professionally since the incident. She was not physically injured. Her losses, and they were real, were from the hurt and humiliation suffered. Certainly that loss is worth something but is it really worth over $50,000,000?

In Canada the answer is clearly no.

The amount of money a court will award for an injury depends very much on the injury itself; but the amount recoverable in Canada is based in large part on the quantifiable loss and hurt, embarrassment or pain and suffering is strongly limited. Damages are awarded for actual loss so as to put you in the position that you would have been in had you not suffered the wrong complained of. The aim is to "make the injured party whole again".

The Supreme Court of Canada has said: "The general principles underlying our system of damages suggest that a plaintiff should receive full and fair compensation, calculated to place him or her in the same position as he or she would have been in ,,, , insofar as this can be achieved by a monetary award."

Damages are calculated a little differently for cases based on breach of contract and cases based on careless injury.

In a breach of contract, the measure of damages is the amount of money that would put you in the position you would be in had the contract been performed. So in a breach of contract case you get things like lost profits.

In a careless injury case – say where someone accidentally knocked you over and broke your leg – you get damages sufficient to put you in the position you would have been in if the injury had not occurred. So in that type of case you get lost wages and money for taxi rides you had to take because you couldn't walk to work.

In terms of quantifiable loss there is no limit to the damages payable. If, tragically, you are injured by someone and a Court is to determine your damages that determination will be based mainly on what you lost – in terms of income – and what you need to give you reasonable care until (and if) you recover. If that means you lost income of $4,000,000 then you will get a a lost income award if $4,000,000. If that means you need $8,000,000 for special nursing care then that is what you will receive as an award. Your pain and suffering will receive some recognition but the Court recognizes that money cannot compensate for pain and so any award is arbitrary. As a result many years ago the Court said the most you can get for pain and suffering is $100,000. Now there has been inflation since and the cap is now closer to $300,000. But $300,000 is a lot less than $50,000,000.

That means that in many lawsuits there may be a wrong but there is not much that can be recovered in damages.

Suppose you were fired from your job of ten years. There was no cause to fire you. But you were fired and almost immediately got another job that paid more money than the one you lost. In that case you probably have almost no quantifiable damages. Yes you were insulted and offended and hurt – but you lost no money and so suing is likely not worth it.

Another point to consider is that being awarded damages does not mean you will be paid anything. If I get judgment against someone without money there is no way I will be paid. That's important to remember because before you spend money on a lawsuit decide if the person you are suing can possible pay.

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