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January 11, 2010

Caps on General Damages Upheld

Two recent decisions have upheld the cap on general damages in Alberta and Nova Scotia. In Hartling v. Nova Scotia, the Nova Scotia Court of Appeal upheld Nova Scotia’s $2,500.00 cap on “minor injuries”. In Morrow v. Zhang, the Supreme Court of Canada dismissed a leave application from the Alberta Court of Appeal’s decision which upheld Alberta’s Minor Injury Regulation which imposes a $4,000.00 cap on non-pecuniary damages for minor injuries. The Alberta legislation defines minor injuries as sprains, strains and WAD I or II injuries. In both cases, the cap was challenged as violating the Canadian Charter of Rights and Freedoms, alleging discrimination under s. 15 on the basis of physical disability, mental disability and gender. The Courts held that the caps were not discriminatory.

Although these decisions will likely be applauded by those defending claims, they raise interesting questions. Since the caps only apply to non-pecuniary general damages, will courts increase other heads of damages in order to compensate? For example, in Morrow, the trial judge would have assessed the plaintiff’s general damages at $20,000.00 and $15,000.00. The cap would reduce those to $4,000.00, but in another circumstance, would a court increase the amount of pecuniary damages to compensate? One also has to wonder whether physicians treating patients injured in automobile accidents who are aware of the cap on minor injuries might tend to describe them in different ways so as to avoid being caught by the definition. Both the Alberta and Nova Scotia courts discussed the history of the caps and the fact that they were attempts by the legislatures to control escalating automobile insurance costs. The courts seem to be sending a message that they will give effect to the legislature’s intentions with these decisions.


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