Contingencies; Loss of Interpersonal Relationships; The Material Contribution Test; and Punitive, Exemplary, and Aggravated Damages
| Author | John A. McLeish |
| Pages | 279-325 |
Contingencies;
Loss
of
Interpersonal
Relationships;
The
Material
Contribution
Test;
and
Punitive,
Exemplary,
and
Aggravated
Damages
John
A.
McLeish*
A.
CONTINGENCIES1
i)
Introduction
Assessing
future
pecuniary losses
is an
inherently speculative under-
taking
as
future
losses
cannot
be
"proved"
in the
conventional
sense.
In
recognition
of the
speculative nature
of
this
exercise,
the
standard
of
proof
for
future
pecuniary losses
is
less onerous than
for
past losses.
Thus,
a
plaintiff
need only establish
a
"real
and
substantial" risk
of fu-
ture pecuniary losses rather than satisfying
the
traditional burden
of
proving losses
on a
balance
of
probabilities.2
However,
a
plaintiff
who
satisfies
only
the
lesser standard
of
proof
is
entitled
to
compensation
only
in
proportion
to the
risk
of
loss
established,
as
opposed
to the
total
potential loss.
For
example,
if
there
is a 25
percent chance
of a
future
pe-
cuniary
loss,
the
plaintiff
is
entitled
to
receive
25
percent
of the
pecuni-
ary
loss.
If the
plaintiff
satisfies
the
traditional burden
and
proves there
John
A.
McLeish, McLeish Orlando LLP.
The
author wishes
to
acknowledge
the
substantial research
and
drafting
assis-
tance
with this section
of the
paper provided
by
Rikin
Morzaria,
an
associate with
McLeish
Orlando
LLP.
Graham
v.
Rourke
(1990),
74
D.L.R.
(4th)
i
(Ont.
C.A.).
See
also
Schrump
v.
Koot
(1977),
82
D.L.R.
(3d)
553 at
556-59 (Ont.
C.A.).
279
*
i
2
280
JOHN
A.
McLEisn
is at
least
a 51
percent chance
of a
future
loss,
the
plaintiff
has
proved
the
loss
on a
balance
of
probabilities
and is
entitled
to
receive
100
percent
of
the
pecuniary loss.
In
the
past
our
courts have
often factored
in a
further
discount
or,
more
rarely,
a
premium
on
future
pecuniary loss awards
to
allow
for
"the contingency that
the
assumptions
on
which
the
award
for
pecuni-
ary
loss
is
predicated
may
prove
inaccurate."3
Though courts typically
use the
term "contingencies"
to
refer
to the
chance
of an
occurrence that will reduce
damages,
they
are
recogniz-
ing
with greater
frequency
that contingencies
can
also lead
to
increased
awards,
and
that
it
would create
an
injustice
to
merely "count possible buf-
fets"
while
at the
same time ignoring
the
possible "rewards
of
fortune."4
This paper will trace
the
traditional approach
to
valuing
the
impact
of
contingencies
on
personal
injury
awards
and
then examine
the
cur-
rent approach
of
Canadian courts, which includes weighing positive
and
negative contingencies, tying contingency awards
to the
chosen basis
for
the
assessment
of
damages, considering
the
impact
of
"compensable
contingencies,"
and a
greater
reliance
on
statistical data. Finally,
we
will
set
out
what
we
believe
to be the
trend
in the
assessment
of
contingencies.
2)
The
Historical Approach
to
Contingencies
As
noted above, courts have historically applied contingencies
to
reduce
future
pecuniary losses.
In the
leading Supreme Court
of
Canada deci-
sion
of
Andrews
v.
Grand
& Toy
Alberta
Ltd.5
Mr.
Justice Dickson,
as he
then
was, upheld
the
trial judge's
20
percent discount
for
"contingencies
and
hazards
of
life."
This discount
was
allowed
in the
absence
of any
specific
evidence being
led as to the
likelihood
of
those contingencies
materializing
in the
case
of the
plaintiff.
Justice Dickson acknowledged
that
the
deduction
was
arbitrary
and
speculative,
but
nonetheless, held
that
the
trial
judge's
allowance
was
reasonable:
This whole question
of
contingencies
is
fraught
with
difficulty,
for it is
in
large measure pure speculation.
It is a
small element
of the
illogi-
cal
practice
of
awarding lump
sum
payments
for
expenses
and
losses
projected
to
continue over long periods
of
time.
To
vary
an
award
by
the
value
of the
chance that certain contingencies
may
occur
is to as-
3
Milina
v.
Bartsch,
[1985] B.C.J.
No.
2762 (S.C.),
McLachlin
J.
4
Graham
v.
Rourke,
supra
note
2 at 13,
quoting
from
Bresatz
v.
Przibilla
(1962),
108
C.L.R.
541
(Aust. H.C.).
5
Andrews
v.
Grand
&
Toy
Alberta
Ltd.,
229.
Contingencies;
Loss
of
Interpersonal
Relationships
... 281
sure either over-compensation
or
under-compensation,
depending
on
whether
or not the
event
occurs.6
For
a
period
of
time following
the
Supreme Court's decision
in An-
drews,
Canadian courts applied
a
conventional contingency deduction
in the
range
of
about
20
percent without requiring
any
specific
evidence
of
the
likelihood
of the
occurrence
of
contingencies
for a
given plain-
tiff.7
Mr.
Justice Bouk
offers
the
following explanation
for the
substantial
blanket
reduction
in
personal
injury
awards
for
contingencies:
...
when
the law
considers what amount
an
injured
plaintiff
should
receive
by way of a
judgment
on an
assessment
of
future
loss
of
earn-
ing
power
the
cases invariably take
the
bleak
side....
This idea seems
to
have crept into
the law
under
the
mask
of two
unstated assumptions.
First,
there
may
have been
in
earlier years
a
hold-over
from
the
reality
of
life
in the
i8th
and
igth
centuries,
when
the
average person
was
assumed
to go
through
a
series
of
trials
and
ordeals
from
birth
to
death, none
of
which were particularly
pleasant....
A
person's reward
came
in
afterlife.
Meanwhile
his
existence
on
earth
was
considered
an
unpleasant event which
he
must endure until released
from
it by
death.
Accepting
this kind
of
thinking
in
whole
or in
part makes
it
easy
to
justify
a
reduction
of an
award because
of the
awful
things which
might happen
to a
plaintiff
after
his
trial.
Second, there
is an
unstated premise that
any
plaintiff
in
these
kinds
of
cases
has put
forward
his
best evidence.
It is
more
or
less
as-
sumed
he has not
relented
on one
point
but
like
all
plaintiffs
has
only
led
evidence showing
the
worst possible loss
he
might
suffer,
leaving
it
for
the
defendant
to
prove otherwise. Since
the
matter
is one
concern-
ing the
future
and
since most defendants
fail
to
call
evidence
refuting
the
plaintiff's
forecast,
there
is an
unconscious reaction that something
must
be
done
by the law to try to
balance
the
scales.
The
application
of
a
contingency
factor
has
been
the
usual
response.8
Justice
Bouck
observed that
the two
beliefs
no
longer apply
in
mod-
ern
Canadian society. With respect
to the
former,
he
noted that
today,
6
Ibid,
at
249.
7 See for
example
Ratansi'v.
Abery
(1994),
97
B.C.L.R.
(2d)
74
(S.C.);
Milina
v.
Bartsch,
su-
pra
note
3; and
Gray
v.
Macklin
(2000),
7
M.V.R.
(4th) 264,
[2000]
OJ.
No.
4603 (S.C.J.).
8 Lan v.
Wu,
[1978]
B.C.J.
No. 961 at
paras. 39-42 (S.C.), Bouck
J.,
referred
to in
Kenneth
D.
Cooper-Stephenson,
Personal
Injury
Damages
in
Canada,
2d ed.
(Toronto:
Carswell,
1996)
at
378.
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