Liquor Liability - 2

In Childs v. Desmoreaux, [2006] 1 S.C.R. 643 at para. 19-20, McLachlin C.J. noted that the strict regulation of the sale and consumption of alcohol by the government imposes special responsibilities on those who profit from its sale and duties to reduce the risk associated with its sale:

"Second, the sale and consumption of alcohol is strictly regulated by legislatures, and the rules applying to commercial establishments suggest that they operate in a very different context than private-party hosts. This regulation is driven by public expectations and attitudes towards intoxicants, but also serves, in turn, to shape those expectations and attitudes. In Ontario, where these facts occurred, the production, sale and use of alcohol is regulated principally by the regimes established by the Liquor Control Act, R.S.O. 1990, c. L.18, and the Liquor Licence Act, R.S.O. 1990, c. L.19. The latter Act is wide-ranging and regulates how, where, by and to whom alcohol can be sold or supplied, where and by whom it can be consumed and where intoxication is permitted and where it is not.

These regulations impose special responsibilities on those who would profit from the supply of alcohol. This is clear by the very existence of a licensing scheme, but also by special rules governing the service of alcohol and, as noted above, special training that may be required. Clearly, the sale of alcohol to the general public is understood as including attendant responsibilities to reduce the risk associated with that trade."

McLachlin C.J. emphasized the expectations of the public and the means that commercial hosts have to meet those expectations through monitoring of alcohol consumption:

"…The public expects that in addition to adherence to regulatory standards, those who sell alcohol to the general public take additional steps to reduce the associated risks. Furthermore, patrons are aware that these special responsibilities have very real and visible manifestations. The imposition of a "cut-off" at the bar is understood, and expected, as part of the institutionalization of these responsibilities. Similarly, in many establishments, "bouncers" both enforce admission and assist other members of the staff who might have to deal with patrons who may have become intoxicated. These features have no equivalent in the non-commercial context. A party host has neither an institutionalized method of monitoring alcohol consumption and enforcing limits, nor a set of expectations that would permit him or her to easily do so."

Commercial hosts have an incentive to over-serve: it is more profitable than encouraging responsible consumption. The costs of over-consumption are borne by drinkers, taxpayers and third parties, while tavern keepers enjoy large profits:

"Third, the contractual nature of the relationship between a tavern keeper serving alcohol and a patron consuming it is fundamentally different from the range of different social relationships that can characterize private parties in the non-commercial context. The appellants argue that there is "nothing inherently special" about profit making in the law of negligence. In the case of alcohol sales, however, it is clear that profit making is relevant. Unlike the host of a private party, commercial alcohol servers have an incentive not only to serve many drinks, but to serve too many. Over-consumption is more profitable than responsible consumption. The costs of over-consumption are borne by the drinker him or herself, taxpayers who collectively pay for the added strain on related public services and, sometimes tragically, third parties who may come into contact with intoxicated patrons on the roads. Yet the benefits of over-consumption go to the tavern keeper alone, who enjoys large profit margins from customers whose judgment becomes more impaired the more they consume. This perverse incentive supports the imposition of a duty to monitor alcohol consumption in the interests of the general public."

Liquor Liability - 1

Commercial establishments serving alcohol to patrons have duties under statute and common law to patrons and third parties who may be injured by intoxicated patrons. The duty is to take positive steps to prevent patrons from becoming impaired. Alcohol providers may be liable even though the patron was intoxicated upon arriving at the establishment and despite the patron not showing obvious signs of intoxication. It is the provider’s responsibility to ensure an appropriate system of service and ongoing monitoring is in place to prevent injuries as a result of intoxication. The Liquor Licence Act prohibits service of alcohol to one who is or appears to be intoxicated. The Court of Appeal for Ontario recently held that a plaintiff may call evidence of over-service of patrons of the hotel before, during and after the incident and is not restricted to evidence from the night of the incident giving rise to the lawsuit. Taverns may be held responsible for a portion of the plaintiff’s contributory negligence if the Plaintiff failed to take care for her own safety due to impairment which is the fault of the tavern under the Liquor Licence Act. Liability under s. 39 of the Liquor Licence Act is a statutory liability arises once the factual pre-conditions provided for therein have been found to exist.

This post contribution authored by Tara Pollitt, a lawyer in our office at McCall Dawson Osterberg Handler LLP.

Chronic Pain - Non-Pecuniary General Damages $175,000

Degennaro v. Oakville Trafalgar Memorial Hospital, [2009] O.J. No. 2780 (S.C.J.).

Is this the new high water mark for chronic pain?

"171 I am persuaded that the range for non-pecuniary loss for Ms. Degennaro, urged upon me by Mr. Kwinter, is appropriate. I will award Ms. Degennaro $175,000 for non-pecuniary loss.

172 It is clear that Paul Degennaro and the children have suffered a loss of guidance, care and companionship as a result of the injury to Ms. Degennaro. I will award Mr. Degennaro $65,000 for his claim under the Family Law Act. I will award each child $25,000."

It will be interesting to see if this decision gets appealed or stands.

Definition of Chronic Pain from the Supreme Court of Canada

This is not a new decision but worth re-reading.

"Chronic pain syndrome and related medical conditions have emerged in recent years as one of the most difficult problems facing Workers' Compensation schemes in Canada and around the world. There is no authoritative definition of chronic pain. It is, however, generally considered to be pain that persists beyond the normal healing time for the underlying injury or is disproportionate to such injury, and whose existence is not supported by objective findings at the site of the injury under current medical techniques. Despite this lack of objective findings, there is no doubt that chronic pain patients are suffering and in distress, and that the disability they experience is real. While there is at this time no clear explanation for chronic pain, recent work on the nervous system suggests that it may result from pathological changes in the nervous mechanisms that result in pain continuing and non-painful stimuli being perceived as painful. These changes, it is believed, may be precipitated by peripheral events, such as an accident, but may persist well beyond the normal recovery time for the precipitating event. Despite this reality, since chronic pain sufferers are impaired by a condition that cannot be supported by objective findings, they have been subjected to persistent suspicions of malingering on the part of employers, compensation officials and even physicians." (underlining added)
Nova Scotia (Workers' Compensation Board) v. Martin, [2003] 2 S.C.R. 504 at para. 1 (Gonthier J.).

Is chronic pain a foreseeable injury? (post-Mustapha)

In the recent decision, Degennaro v. Oakville Trafalgar Memorial Hospital, [2009] O.J. No. 2780 (S.C.J.), the Court considered the issue of reasonable foreseeability and chronic pain in the light of the Supreme Court of Canada's comments on this issue in Mustapha, [2008] 2 S.C.R. 114.

Gray J., considering whether chronic pain is a foreseeable injury in light of Mustapha, noted that: "There is obviously a subtle distinction between a person of less than ordinary fortitude who suffers damage that is not foreseeable, and a person of ordinary fortitude who suffers damage that is more serious than expected."

In Degennaro the plaintiff developed chronic pain after an injury that resulted in a fractured sacrum. The fracture healed but her pain got worse. There was no objective reason for the continuing and worsening pain. The eventual conclusion of her treating physicians was that the plaintiff had developed fibromyalgia. Although it was in dispute at the trial, the Court concluded that the chronic pain was caused by the same fall that had resulted in a fractured sacrum.

The Court then had to consider whether the chronic pain was foreseeable. This is what Gray J. wrote at paras 158-163.

158 In Mustapha, supra, the Supreme Court of Canada analyzed the issue. In that case, the Court held that it was not reasonably foreseeable that the plaintiff would suffer serious mental injury as a result of seeing flies in a bottle of water that he was about to install for a customer.

159 At para. 14 of her judgment, McLachlin C.J.C. stated that a plaintiff is to be considered objectively, not subjectively. Thus, a plaintiff is not to be considered in the context of his or her own personal makeup, which may give rise to the specific injury suffered, but rather objectively. That is, one must ask what a person of ordinary fortitude would suffer.

160 At para. 16 of her judgment, McLachlin C.J.C., in a passage that has some significance for this case, stated:

Once a plaintiff establishes the foreseeability that a mental injury would occur in a person of ordinary fortitude, by contrast, the defendant must take the plaintiff as it finds him for purposes of damages. As stated in White, at p. 1512, focusing on the person of ordinary fortitude for the purposes of determining foreseeability, "is not to be confused with the 'eggshell skull' situation, where as a result of a breach of duty the damage inflicted proves to be more serious than expected". Rather, it is a threshold test for establishing compensability of damage at law.

161 In my view, it is foreseeable that chronic pain may result from a physical injury. While the actual cause of chronic pain is not known, it is known that some people will develop chronic pain after physical trauma. Thus, chronic pain is foreseeable as falling within a range of consequences that may flow from a physical injury. This is a foreseeable consequence in a person of ordinary fortitude. Thus, in my view, the defendants must take the plaintiff as they find her. As noted by McLachlin C.J.C. at para. 16 of Mustapha, supra, this is simply a case where the damage inflicted has proven to be more serious than expected.

162 There is obviously a subtle distinction between a person of less than ordinary fortitude who suffers damage that is not foreseeable, and a person of ordinary fortitude who suffers damage that is more serious than expected. However, in view of the analysis in Mustapha, the distinction is real and must be respected. I have no doubt that Ms. Degennaro falls into the category of a person who is a person of ordinary fortitude who has suffered damage that is more serious than expected.

163 For the foregoing reasons, the chronic pain suffered by the plaintiff, Ms. Degennaro, was a foreseeable consequence of the incident that occurred in May, 1999, and the defendants must compensate her for it.

On the Internet

Here are some links to a few Canadian legal blogs that I've been reading lately and I've found them to be helpful. Take a look but I add the caveat that I have nothing to do with these websites - so read at your own risk!!

http://www.thecourt.ca/

http://www.slaw.ca/

http://www.cavanaghwilliams.com/blawg/

Worker's Compensation - 2

Further to my last post, the question often is whether a worker is in the course of employment or not.

For example, if a worker is on a smoke break at work when they get injured, is this an “injury by accident, arising out of and in the course of his or her employment”? Is this employee entitled to benefits from the Worker’s Compensation fund or is the worker able to sue?

There are several decisions from the Workplace Safety and Insurance Appeals Tribunal (“WSIAT”), going back 15 to 20 years ago, in which the Tribunal held that workers who drive around most of the day as part of their employment and who have an accident while on a coffee break, stopping for lunch or running an errand not far off their scheduled route, do not create a “distinct departure” from their employment activities. Therefore, the accident was held to fall within the parameters of Section 13 of the WSIA, 1997, “an accident arising out of and in the course of employment”. The WSIAT ruled that the tort action was barred. These are cited at WSIAT decisions 351/90, 62/94 and 669/89.

In another case found at WSIAT decision 901/95, at paragraph 44, the tribunal found that a plaintiff who slipped and fell when he was going into a donut shop was engaged in a work-related activity that was reasonably incidental to his employment. In that instance, the plaintiff was a salesman and often used the donut shop for filling out paper work because he did not have an office of his own. He also often met clients at the donut shop.

The test used by the WSIAT is whether the personal injury in a work-related activity was “reasonably incidental” to the injured person’s employment. The WSIAT, in their decision of 901/95, also stated that they were persuaded that the plaintiff was engaged in a work-related activity that was reasonably incidental to his employment on the basis that the timing, duration, and potential cancellation of each break was determined by the requirements of the plaintiff. In other words, the plaintiff, as a salesman, was self-directed and there was not a bright line to distinguish between when he was on a break or when he was working in the donut shop.

In a more recent decision, the WSIAT, at decision 285/05, affirmed the work-relatedness test when deciding that an employee’s right of action had been taken away by the WSIA, 1997 when the employee slipped and fell in a parking lot of an airport while on a business trip.

The WSIB has an Operational Policy Manual which contains policies related to this issue. Policy document 15-02-02, which applies to all decisions made on or after July 1, 1990, states that a personal injury by accident occurs in the course of employment if the surrounding circumstances relating to place, time and activity indicate that the accident was work-related. Further, policy document 15-03-03, applicable to all decisions made on or after June 1, 1989, states that a worker is considered to be in the course of employment on entering the employer’s premises but that the “in the course of employment” status ends on leaving the employer’s premises, unless the worker leaves the premises for the purposes of employment. These policies seem to be in conformity with the WSIAT’s decisions.

Worker's Compensation in Ontario and Restrictions on the Right to Sue an Employer

The Workplace Safety and Insurance Act, 1997 governs the Ontario workers’ compensation system.

Fundamental to this system is a compromise in which workers give up the right to sue for their work-related injuries, irrespective of fault, in return for guaranteed compensation for accepted claims.

Employers receive protection from lawsuits in exchange for financing the program through premiums.

Employees cannot sue employers or most other employers for injuries occurring during employment, in most circumstances.

This system of collective liability provides compensation for injured workers and their families, while spreading individual costs among employers.

It means that if an employee commences a lawsuit against its employer or other employer, that employer can have the lawsuit dismissed.

Here is how it works:

Section 13(1) of the WSIA, 1997 states that a worker who sustains a personal injury by accident, arising out of and in the course of his or her employment, is entitled to benefits under the insurance plan.

Section 28 of the WSIA, 1997 provides that a worker employed by a Schedule 1 employer is not entitled to commence an action against any Schedule 1 employer (or a Director, Executive Officer or a worker employed by any Schedule 1 employer) in respect of the worker’s injury. This protection from lawsuits is the trade-off for the compensation injured workers receive.

Section 27 of the WSIA, 1997 states that Section 28 applies with respect to a worker who sustains an injury that entitles him or her to benefits under the insurance plan. Therefore, this prevents workers who are entitled to benefits under the insurance plan from suing another employer who is also within the same Schedule 1.

Small Claims Court - $25,000 Limits

On January 1, 2010, the monetary jurisdiction of Small Claims Court in Ontario will be raised from $10,000 to $25,000. The limit had not changed since 2001 when it was increased from $6,000 to $10,000.

The question I have been wondering is, what will happen to cases started prior to January 1, 2010, but which claim between $10,000 and $25,000? If you start a case before Jan. 1 for $25,000, will it automatically be transferred to Small Claims Court after that date?

The answer seems to be no.

Section 23(2) of the Courts of Justice Act states:

"An action in the Superior Court of Justice may be transferred to the Small Claims Court by the local registrar of the Superior Court of Justice on requisition with the consent of all parties filed before the trial commences if,

(a) the only claim is for the payment of money or the recovery of possession of personal property; and

(b) the claim is within the jurisdiction of the Small Claims Court."

It seems that this rule will apply for transfers after January 1, 2010.

In the absence of consent among the parties, a change will require a motion to the Superior Court of Justice.

Why would a party prefer the Superior Court of Justice to the Small Claims Court? One reason would be the discovery procedures available to the parties in Superior Court which are not available in Small Claims Court, such as examinations for discovery and affidavits of documents. Small Claims Court only requires parties to produce documents upon which it intends to rely at trial and a list of proposed witnesses and other persons with information about the matter at issue. This is a significant difference.

Another reason might be the costs rules which are limited in Small Claims Court to 15% of a claim (this can be doubled if a party beats at trial its own offer to settle, in certain circumstances). Of course this is more restrictive than the costs that are available to a successful party in a Superior Court action.

The consequence to a plaintiff however for failing to transfer a proper case to the Small Claims Court may be an order that the plaintiff not receive any costs. See Rule 57.05 of the Rules of Civil Procedure.