Compensation for Harm to Intangible Interests: Non-Pecuniary and Aggravated Damages

• Author: Jamie Cassels/Elizabeth Adjin-Tettey
• Profession: Professor of Law, Vice President Academic, and Provost, University of Victoria/Professor of Law, University of Victoria
• Pages: 212-245

Cha Pter 6

comPensaTion

foR haR m To

inTangibLe inTeResTs:

non-PecuniaRy and

aggR avaTed damages

a. introDuCtion anD terminoLogy

Non-pecuniary damages are an important head of compensation for

civil wrongs. These damages are available in both tort and contract ac-

tions for intangible losses such as pain and suffering, mental di stress,

and emotional shock. There are several subheadings of non-pecuni-

ary damages. The most common non-pecun iary damage awards are

those m ade in personal injury actions to compensate the plaintiff for

the “pain and suffering” and “lost enjoyment of li fe” that m ay accom-

pany serious physical injury. The principles govern ing these awards

are fully discus sed in Chapter 4 in the context of personal injur y dam-

ages. There are, however, many other situations i n which non-pecuni-

ary losses are compensable, in both tort and contract act ions, and these

form the subject matter of this chapter.

The terminology and theoretic al b asis of non-pecun iary damages

can be confusing. One import ant subcategory of non-pecuniary d am-

ages i s “aggravated damages.” Wh ile the term is not used uniformly,

aggravated damages generally refer to damages that are awarded in

contract or tort actions to compen sate the pl aintiff for a civil wrong

that is committed in a particularly callous, high-handed, or malicious

fashion. In other words, the manner of the defendant’s w rongdoing “ag-

gravates” the damages suffered by the plainti ff. A good example is a

defamation case where the defendant persists in making defamatory

212

Compensation for Ha rm to Intangible Interes ts 213

comments about the plaintiff even after there is reason to desist, or re-

fuses to make an apology after it is clear that a w rong has been done.

However, non-pecuni ary damages are not conf‌ined to situat ions

where the manner of the breach is harsh or malicious. There is an-

other category of c ases where the non-pecuniar y damages f‌low from

the content of the duty breached rat her tha n the manner of its bre ach.

An example would be the “holiday case s.” Here plaintiffs are awarded

damages in contract for their disappointment, anxiety, and frustration

resulting from spoiled holidays, though there is nothing malicious

about the breach. The damages compensate for the lost benef‌it suffered

by the plaintiff rather than the way in which the benef‌it was w ithheld.

Such da mages are also, on occ asion, referred to as “aggravated dam-

ages,” but this is an unfortunate use of the terminology. It is better to

consider t hese damages as a separate head of compensation for non-

pecuniar y loss.

Particularly when discussing aggravated damages, it is important

to keep in mi nd that they are to be disting uished from punitive damages

(which are discussed in Chapter 8). Non-pecuniary damages, includ-

ing aggravated d amages, are compensatory. Even t hough an award of

aggravated damages may b e tr iggered by harsh or malicious conduct,

it is not designed to punish th at conduct but rather to compensate the

plaintiff for the add itional harm caused by that conduct. In Vorvis v.

Insurance Corp. of Br itish Columbia, the Supreme Court of Canada ex-

plained the disti nction:

Punitive da mages, as t he name would indicate, are de signed to pun-

ish. In thi s, they constitute an exception to t he general common law

rule that damages are designed to compensate the injured, not to

punish the wrongdoer. Aggravated damage s will frequently cover

conduct which could also be the subject of punitive damages, but the

role of aggravated dam ages remains compensatory.

Aggravated damages are awarded to compensate for aggravated

damage. A s explained by Waddam s, they take account of int angible in-

juries and by def‌inition will generally augment damages assessed under

the general rules relating to the a ssessment of damages. Aggravated

damages are compens atory in nature and may only be awarded for that

purpose. Punitive damage s, on the ot her hand, are punitive in n ature

and may only be employed in circumstances where the conduct giving

the cause for complaint is of s uch nature that it merits punishment .1

1 [1989] 1 S.C .R. 10 85 at 10 98–99 [Vorv is]. See als o Whiten v. Pilot Insurance Co.,

[2002] 1 S.C.R. 595 at paras. 116 and 156–57; Fidler v. Sun Life Insurance Co. of

Canada, [2006] 2 S.C.R. 3 at para. 61 [Fidler].

Remedies: The L aw of damages214

The distinction between agg ravated (compensatory) damages and

punitive damages has been adopted t hroughout Canada. Obviously,

however, the d istinction can be blurred in practice, since the same con-

duct may give rise to both aggravated and punitive damages, and it is

likely impossible (especially in a jury trial) to keep punitive motives

entirely at bay when assessing aggravated damages.

b. non-PeCunia ry Dam ages in tort Law

1) Compensation for Non-Pecuniary Losses as a Separate

Head of Damages

In tort law, non-pecuniar y losses may be compensated in a number of

ways. First, physical pain and suffering, and the accompanying psycho-

logical pain, are compensated directly as a separate head of damages

in personal i njury cases. Whatever the cause of action (negligence or

an intent ional tort), where the gist of the wrong is physical injury to

the plaintiff, consequential non-pecun iary losses are compensable as

“pain and suffering” and “lost enjoyment of life.” These losses are com-

pensated according to the functional approach discussed in Chapter 4.

In addition, where a person h as been directly involved in a traumatic

accident caused by the defend ant’s negligence, and suffers psychiatric

illness as a result, she will be compensated for that il lness even if her

other physical injuries are mi nor.

Beyond torts where t he essential harm is physical injury, non-pecu-

niary damages as a separate he ad of damages are rare. Unt il relatively

recently, tort law offered no compen sation for emotional and mental di s-

tr ess that was not a ccomp ani ed b y phy sica l inj ury. Firs t, c ourt s we re con -

cerned not to open the f‌loodgates of liability for cl aims to hurt feelings

and emotional or ment al harms resulting from various forms of inter-

per sonal conf‌lic t short of physi cal v iolence . Second , they were con cerne d

with the evidenti ary diff‌iculties of assessing such “intangible” injuries.

However, there are now several causes of action that directly com-

pensate non-pecuniary harm even though it is not the consequence

of physical injury. Intentional inf‌liction of nervous shock or mental

suffering i s now a distinct cause of action in tort.2 Malicious practical

jokes, sexual harassment, and knowingly false accusations against a

person may give rise to this action. Similarly, negligent inf‌liction of

2 Wilkinson v. Downton, [1897] 2 Q.B. 57; See A .M. Linden & Bruce Feldthusen,

Canadian Tort Law, 8th ed. (Mark ham, ON: Butterworths, 2006) at 54 –57.