Pecuniary and Non-Pecuniary Damages in Long-Term Disability Claims

The law in Ontario allows you to sue for compensation if you are injured as a result of someone else’s wrongdoing or negligence. The injuries could be physical, emotional, or even legal such as in case of breach of contract.

Compensation comes in form of damages. This is an amount of money intended to make the injured person whole again so that he/she can be as close as possible to the position he/she was in before the injury.

These damages generally fall under 2 broad categories namely pecuniary and non-pecuniary damages. A personal injury case may involve both of these such as if you have medical bills to pay after an accident and the accident has left you disfigured, but a breach of contract claim only has pecuniary damages. So, what is the difference between the two?

Pecuniary Damages

Pecuniary damages, which are also called economic/special damages, are meant to compensate an individual for actual losses that can be quantified and calculated. As an example, if you need medical care after an accident, that is a pecuniary damage. Another example is vehicle repair costs if you have been in a car accident.

Note that although there is no actual “bill” to consider with lost earnings, this is another type of pecuniary damages. If you were employed or self-employed, you will obviously not be able to earn your daily work capacity if you are injured. The actual amount of lost earnings is calculated by comparing what you were earning before injury to what you are earning after the injury.

Pecuniary losses also cater for loss of earning capacity (if you can no longer pursue your natural career path) and future care such as in case of chronic illness resulting from an injury.

Non-Pecuniary Damages

Non-pecuniary damages, also known as non-economic/general damages are those damages that cannot be easily quantified since they don’t have an actual price tag. Examples of non-pecuniary damages are disfigurement and pain and suffering.

Non-pecuniary losses also cover impairment of life (if you will no longer enjoy the quality of life you did before), impairment of relationship (if your injury has had a negative effect on your marital, familial, or social relationships), and impairment of physical/mental abilities (if you lose your natural physical and intellectual abilities).

Even though these losses will not have bills or receipts, they still have to be proven in other ways. Some of the factors considered are the severity and nature of the injury, the duration of the injury, disability or loss of life, and the age of the claimant.

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If the insurance company was acting in bad faith such as wrongly denying you LTD benefits, the law allows you to sue for both pecuniary and non-pecuniary damages, even in breach of contract cases. Long-term disability lawyers in Toronto will help you prove such bad faith.

There are instances when there is nobody at fault. In such circumstances, LTD claims in Ontario focus on benefits, not damages. If you have a Canada Pension Program (CPP) policy, you can get income-replacement benefits on a regular basis, calculated as a percentage of your pre-disability income.

The Ontario Disability Support Program (ODSP) also provides employment-support and income-support benefits based on your specific needs such as paying for housing, disability-related costs like clutches, and medical supplies.

Non-Pecuniary Losses

Pecuniary and non-pecuniary losses together make up the compensatory losses that your personal injury lawyer will seek on your behalf. By understanding the difference between the two you will get a grasp on how to establish your claim. It will also help you to offer your lawyer the best back up information that you can.

Non-pecuniary losses are also known as non-economic or general losses. They are more difficult to quantify than pecuniary losses. They relate not to the financial aspects of the injury, but to the additional intangible costs that result from the injury. These losses are not easy to prove, so the burden of proof is greater.

Non-pecuniary losses will include the following;

• Life impairment – this happens when the injured person no longer enjoys the same quality of life that he enjoyed prior to the accident
• Emotional distress – when the accident has affected the mental health of the claimant such that they suffer depression, anxiety or any other psychological problem, that person is said to have suffered emotional distress.
• Pain and suffering – as a result of the accident, injuries and economic losses
  Impairment of mental of physical abilities – the claimant is disabled as a result of the injury and now no longer has the same mental or physical ability following the accident.
• Impairment of relationships – this is said to have occurred when the accident has damaged the claimant’s ability to relate in the same manner socially or with family, colleagues or their life partner.
• Future employability – if as the result of the accident you are unable to work in the career of your choice, this may also fall under non-pecuniary losses.

It is clear that you cannot prove any of these losses with a receipt or an invoice, so other measures must come into play when we claim for non-pecuniary damages.

The courts will use the following factors to determine the compensation for non-pecuniary losses.

• The nature, duration and severity of the injury – here, in considering compensation, the courts will use precedence to help determine the amount of compensation payable. Typically, the worse the injury the higher the compensation paid.
• The age of the claimant – the younger the person who is disabled, for example, the higher the likely court award
• Loss of life or disability

Although the courts may rely on previous similar cases when considering compensation, each case is always considered on its own merits. Cases may seem similar, but people react differently and some may suffer greater psychological harm, for example.

Unlike pecuniary losses there is no physical documentation that can prove your loss.

Pecuniary Losses

Personal injury compensation is often divided into pecuniary losses and non-pecuniary losses. An understanding of the terms and how they impact on your claim is important if you are to have a good understanding of how your claim has been calculated. Understanding the terms will help you assist your personal injury lawyer to claim for all your losses financial or otherwise.

Pecuniary losses are quite simply financial losses. You can measure them in dollars and cents. Pecuniary losses cover the financial loss of not just the injured but their families too. Usually you can prove pecuniary losses by producing the receipt, an account or a statement. Because it is easy to measure, this is the more common form of compensation paid for loss in a personal injury law suit.

Pecuniary losses may include

• Medical bills – this will include all the medical costs that you have incurred as a result of the accident. Such expenses may include ambulance services, medicines, hospitalisation, doctor’s fees, therapy and the like.
• Future care – if the injury is of such a severe nature that it results in disability or chronic illness, the costs of chronic care and therapy will form part of the claim. These costs extend to the care given by friends or family who give of their time and may have to stop working and earning an income.
• The cost of damages – if capital goods such as your motor vehicle have been damaged as a result of the accident, the claim will include the costs to repair or replace the goods.
• Loss of earnings – injured people often have to miss work. Earnings lost due to the injury will form part of the claim as will an estimate of future earnings shortfalls brought about by time lost due to the injury.
• Loss of earning capacity – these costs occur if your injury has precluded you from continuing to do your job or chosen career. If, for example, you are a dancer and you injure your back, you may no longer carry out your chosen career. You may have to find work where you earn less. If this is the case, loss of earning capacity will form part of your claim.

Your personal loss attorney will need proof of pecuniary loss. It is, therefore, essential that you keep all the relevant documentation. This will include receipts, accounts or statements for all the expenses related to the injury and its treatment. You may also need pay slips, tax returns and any other documented proof of payment related to the case.

Your attorney will gather all the information that he or she requires to prove your claim and ensure that every financial loss that you have incurred is duly paid back to you as part of the compensatory order made by the court.

History of Non-Pecuniary Damages in Canada

The Canadian laws regarding punitive, non-pecuniary, and aggravated damages have undergone significant changes over the past five decades, shaping Canadian society’s actions. The Supreme Court of Canada implemented a series of rulings in the 1970s, which directly affected how no-pecuniary damages should be awarded, but these rulings have longstanding social implications. Here is what you should know.

Non-pecuniary (general) damages are awards given for an injuries party’s pain and suffering resulting from another’s negligence.

Some of the factors that considered when determining an appropriate damages compensation in Canada include the plaintiff’s age, nature of injuries they suffered, the duration and severity of pain, nature of disability, impairment of life, and loss of lifestyle and activities of daily living.

No case is alike. A court may rely on previous case law to establish the appropriate range amount of compensation. It is important to emphasize that the calculation of these damages isn’t an exact science.

The Supreme Court Of Canada Trilogy

The Supreme Court of Canada tackled the issue of non-pecuniary damages on January 19, 1978, by ruling on a trilogy of cases to establish the maximum amount of non-pecuniary damages that could be awarded to a plaintiff in a civil action. In the judgment of one of the cases, Justice Dickson explained that non-pecuniary damages are challenging to quantify and don’t rely on an objective measure.

These attributes provided potential grounds for a substantial amount of damages to be awarded. The sheer fact is that there was no objective yardstick to facilitate the translation of pain, suffering, and other non-pecuniary damages into monetary values. That means claims involving such damages were open to broad interpretations and costly compensations.

According to Justice Dickson, there would be no unfairness to the plaintiff if a limit of the amount of compensation linked to non-pecuniary damages was imposed. This is because these damages were not compensatory in nature because no amount of money could replace the level of suffering and pain the plaintiff may have endured. However, the amount of compensation awarded would be considered financial resources to help the victim make their lives better.

Consequently, the Supreme Court of Canada imposed an upper limit amount of [C.D.N.] $100,000 on non-pecuniary damages. In today’s sum, factoring inflation, this cap is approximately $365,000 using the Bank of Canada inflation calculator.

The exception to this cap on damages for pain and suffering is in cases where the plaintiff is alleged to have been sexually assaulted.

In another case (Arnold v. Teno, [1978] 2 S.C.R. 287 (S.C.C.) [Arnold]), the victim or plaintiff was a young person who suffered severe injuries. The plaintiff was crossing the road with his brother when the tragic accident happened. She suffered acute brain damage resulting in mental and physical impairment.

The same upper limit amount of [C.D.N.] $100,000 non-pecuniary damages was imposed by Justice Spence in Arnold’s claim. The court noted that part of the ruling was an economic and social attempt to prevent instances of runaway insurance premiums. The Supreme Court also explained that the amount of non-pecuniary damages awarded shouldn’t vary significantly from one province to another.

Thus, every Canadian, wherever they reside, is entitled to an equal amount of compensation for similar non-pecuniary losses, assuming the losses are similar in nature.

The current state of Ontario automobile insurance law imposes legal barriers for claims for pain and suffering in the motor vehicle claims by imposing statutory deductibles which much be taken into account. The deductible is now approximately $40,000 for auto accident victims and approximately $20,000 for any family members who wish to also advance their claims. The Courts have continued refuse to permit the law to be clearly and fully explained to jury panels which raises professional ethical questions with our tort justice system.

It is imperative that an injured plaintiff retain a law firm that is experienced with navigating the legal barriers that have been put in place, to ensure they receive the maximum compensation they are entitled to.