Punitive 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: 281-309

CHA PTER 8

PUNITIVE DAMAGES

A. INTRODUCTION AND TERMINOLOGY

1) Punitive Damages Distinguished from Compensatory

Damages

Punitive, or exemplary, dam ages are distinct from compens atory, and

even agg ravated, dam ages. They are awarded against a w rongdoer, after

full compensation has already been made for the harm caused. They are

intended to punish the wrongdoer for particularly egreg ious conduct,

to promote respect for the rule of law, and to provide additional deter-

rence.1 Punit ive dam ages, th en, are n ot ground ed in comp ensati on or in

cor recti ve jus tice. They a re gro unded i n ret ribut ive ju stice and se rve t he

goals of punishment, deterrence, and denunciation.2 An award should

pro mote on e or mo re of t hes e obje ctive s.3 Th e Supre me Co urt of Can ada

explained, in Vorvis v. Insurance Corp. of British Columbia:

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

1 See Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595 at para. 36 [Whiten]; Kud-

dus v. Chief Constable of Le icestershire, [2001] UKHL 29, [2001] 3 All E.R. 193 at

para. 79 (H.L.), Lord Hutton [Kuddus].

2 Whiten, ibid. at p aras. 43 and 68.

3 Ibid. at para. 71.

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REMEDIES: THE L AW OF DAMAGES282

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.4

As the Court noted, punitive damages will often arise out of the

same malicious conduct that gave rise to aggravated damages. However,

they are conceptually di stinct, since aggravated damages a re compen-

satory. One court has suggested that the distinction can be stated thus:

“aggravated damage for conduct that shocks the plaintiff: exemplary

(or punitive) damages for conduct which shocks the jury.”5

2) General Principles of Availability

Punitive damages are awarded where the combined effect of compensa-

tory, including aggravated, damages will not achieve suff‌icient deter-

rence and the defendant’s act ions must be fur ther puni shed. They are

triggered by conduct that is so high-handed, malicious, vindictive, and

oppressive a s to “offend the court.” In Hill v. Church of Scientology of

Tor on t o, the Supreme Court of Can ada explained t hat

[p]unitive damages m ay be awa rded in situations where the defend-

ant’s misconduct is so malicious, oppressive and high-ha nded that it

offends the court’s sen se of decency. Pun itive da mages bea r no rela-

tion to what the plaintiff should receive by w ay of compensation.

Their aim is not to compensate the pla intiff, but rather to punish

the defenda nt… . They are in the nature of a f‌ine which is me ant to

act as a deterrent to the defendant a nd to othe rs from acting in this

manner. It i s important to emphasize that punitive damages should

only be awa rded in those circu mstances where the combined award

of general and aggravated damages would be insuff‌icient to achieve

the goal of punishment an d deterrence.6

The forms of action continue to make a difference when it comes to

the common l aw approach to punitive da mages. Historically, punitive

damages were never available in a simple breach of contract case unless

the facts could also support a tort action. Even today, punitive damages

are practically never available in simple contract actions. They are more

widely available in tort claims, though still on a restricted basis. There-

fore, this chapter will deal with tort and contract separately.

4 [1989] 1 S.C.R 1085 at 1098–99 [Vor vi s].

5 Muir v. Alberta (1996), 132 D.L.R. (4th) 695 at 714 (Alta. Q.B.), citing Salm ond on

the Law of Torts.

6 [1995] 2 S.C.R. 1130 at 1208 [Hill].