The purpose of this class of damages is to compensate for a loss of enjoyment of life. Non-pecuniary damages are designed to compensate for pain and suffering and loss of amenities. This type of loss is an intangible loss and is therefore difficult to quantify.

A medical malpractice suit we recently dealt with is MacLean v. Dr. Willinsky et al [1999], where an unreported decision of Judge Dilks was released September 3, 1999. The doctors failed to take the proper measures in advising Mr. MacLean or his referring physicians. As a result, his condition worsened to paraplegia and he is now confined to a wheelchair for the rest of his life. He was a self employed social assistance counselor who had numerous contracts with the government to work with native Indians.

In Andrews v. Grand & Toy Alberta Ltd.[1978], the Supreme Court of Canada set an upper limit of $100,000 for non-pecuniary damages in “catastrophic” cases. It was noted that this was a rough upper limit and that it should only be exceeded in exceptional cases. That case dealt with a quadriplegic. It was stated that all other cases should be considered in proportion to the upper limit. One exception was in Fenn et al. v. Corporation of the City of Peterborough et. al [1979] 9 C.C.L.T. 7. Her award was approximately one and a half years after the recent trial involving the question of non-pecuniary damages. In addition, she suffered more pain for a longer period of time than other cases awarded the upper limit of $100,000. These two factors increased her award to $125,000.

Inflation has increased this upper limit to approximately $265,000 (See Table 1). In Lindal v. Lindal [1981] 2 S.C.R., the Supreme Court of Canada indicated that the upper limit should be increased from time to time to reflect inflation.

General damages for Mr. MacLean’s injury was set at $200,000. The judge noted that Mr. MacLean was older than the Plaintiff in the Andrews’ case, hence his “normal expectations” in life would be shortened. The judge then applied a discount of 10% to represent the fact that Mr. MacLean’s condition was, to a minor degree, pre-existing, and was exacerbated as a result of the tort.

The courts must determine an amount which they believe will provide the victim/Plaintiff with solace. The determination and quantification of such an amount take into consideration various factors. Among our research, we encountered numerous issues which were considered in the determination of non-pecuniary damages. Some of these are:

1. The adaptability of the individual to cope.
2. The amount of pleasure one received from life.
3. Functionality of the individual, i.e. Loss of left hand of cellist v. loss of left hand of right handed lawyer.
4. Value placed on loss itself or costs for providing solace.
5. Burden of society for high upper limit or providing adequate compensation.
6. Ability of victim to experience a loss, i.e. comatose patient.

We identified three possible approaches in determining the purpose of non-pecuniary losses, which in turn, provide the basis for a method of quantification. The first is a conceptual approach where the loss of amenities and freedom from pain and suffering is considered to be a loss of intangible property to which all individuals have a basic right. This, in essence, translates to a loss of personal goodwill. The second is a personal approach where each individual case is considered separately. Here, the difference between the enjoyment experienced by the individual after the accident and how much enjoyment he would have experienced in the absence of the accident is taken into consideration. A major factor in this methodology would be coping skills which are unique to each individual. This would determine the loss of happiness. The third is a functional approach where the view is taken that damages should only be awarded if it can be used to purchase various means of consolation. Damages are assessed based on replacement cost as an attempt to compensate the individual for his or her misfortune. Canada has generally taken this last approach in the past.

In the MacLean case, it was argued by the defense that the cost of Attendant Care Services for Mr. Maclean’s recreational and leisure pursuits should be viewed as improving the quality of Mr. MacLean’s life. As such, they argued it should be appropriately included in general non-pecuniary damages. The judge took the view that non-pecuniary damages are incapable of being replaced or quantified. In this case, the attendant care services could be quantified and was therefore considered a pecuniary loss.

It has been argued that pre-judgement interest, which includes an inflation factor, on non-pecuniary damages double compensates for inflation. In the case of Pickett v. Br. Rail Enrg. Ltd., [1978] 3 W.L.R. 955, the Court of Appeal stated that,

“on the theory that as damages are now normally subject to increase to take account of inflation, there is no occasion to award interest as well.”

However, the House of Lords restored the claim for interest, stating,

“Increase for inflation is designed to preserve the ‘real’ value of money: interest to compensate for being kept out of that ‘real’ value. The one has no relation to the other.”

However, it was assumed in further cases that the “floor” rate of interest would be 5% and that non-pecuniary damages should be treated no different than other heads of damages. The provisions of The Judicature Act fixes the interest award at 5%.

An argument for pursuing a lesser non-pecuniary damage amount is that an amount for solace may be awarded under other heads of damages. However, it has been assumed that amounts awarded for future care will be used to purchase future care equipment and services and amounts awarded for loss of income will be used to sustain that individual to his/her pre-injury standard of living. Hence, there is no other separate category which accounts for solace.

One method of determination is a review of previous decisions with similar circumstances. Another method is using the upper limit as a reference point for the most serious non-pecuniary losses.

By: Gordon Krofchick and Daksha Patel

Reviewed by: Robert Roth

Gordon Krofchick is a Chartered Accountant and Chartered Business Valuator and has practiced quantification of damages for over 20 years. Daksha Patel is a finalist in the Chartered Business Valuation program.

Robert Roth is a partner of Sommers & Roth, Barristers who was the Plaintiff counsel in MacLean v. Dr. Willinsky et. al [1999]. He has reviewed and provided comments on the above article.

Student at work, Krofchick, Gordon et. al., July 23 2002

Valuations for the house hold services, Krofchick, Gordon et. al., Nov 27 2000

Non-pecuniary Damages, Krofchick, Gordon et. al. , Jan 31 2000