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

ChaPter 6

comPensaTion

foR haRm To

inTangibLe inTeResTs:

non-PecuniaRy and

aggRavaTed 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 distress,

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

ary damages. The most common non-pecuniary damage awards are

those made in personal injury actions to compensate the plaintiff for

the “pain and suffering” and “lost enjoyment of life” that may accom-

pany serious physical injury. The principles governing these awards

are fully discussed in Chapter 4 in the context of personal injury dam-

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

ary losses are compensable, in both tort and contract actions, and these

form the subject matter of this chapter.

The terminology and theoretical basis of non-pecuniary damages

can be confusing. One important subcategory of non-pecuniary dam-

ages is “aggravated damages.” While the term is not used uniformly,

aggravated damages generally refer to damages that are awarded in

contract or tort actions to compensate the plaintiff 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 wrongdoing “ag-

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

defamation case where the defendant persists in making defamatory

212

Compensation for Ha rm to Intangible Interes ts213

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

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

However, non-pecuniary damages are not conf‌ined to situations

where the mannerof the breach is harsh or malicious. There is an-

other category of cases where the non-pecuniary damages f‌low from

the content of the dutybreached rather than the manner of its breach.

An example would be the “holiday cases.” 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 withheld.

Such damages are also, on occasion, referred to as “aggravated dam-

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

consider these damages as a separate head of compensation for non-

pecuniary loss.

Particularly when discussing aggravated damages, it is important

to keep in mind that they are to be distinguished from punitive damages

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

ing aggravated damages, are compensatory. Even though an award of

aggravated damages may be triggered by harsh or malicious conduct,

it is not designed to punish that conduct but rather to compensate the

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

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

plained the distinction:

Punitive damages, as t he name would indicate, are designed 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 damages 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 assessment of damages. Aggravated

damages are compensatory 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 [Vorvis]. 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 Law of damages214

The distinction between aggravated (compensatory) damages and

punitive damages has been adopted throughout Canada. Obviously,

however, the distinction 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-PeCuniary Damages in tort Law

1) Compensation for Non-Pecuniary Losses as a Separate

Head of Damages

In tort law, non-pecuniary 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 injury cases. Whatever the cause of action (negligence or

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

the plaintiff, consequential non-pecuniary 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 has been directly involved in a traumatic

accident caused by the defendant’s negligence, and suffers psychiatric

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

other physical injuries are minor.

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

niary damages as a separate head of damages are rare. Until relatively

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

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 claims to hurt feelings

and emotional or mental 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 evidentiary 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 is 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.