August 11, 2023
We have written before about Punitive Damages.
How much are they worth?
In Canada, punitive damages are paid to Plaintiffs where the wrongdoer, in addition to causing actual (compensatory) damages, carried on in a way that was callous, highhanded, malicious or vindictive. They are further limited by the requirement that the compensatory damages must be inadequate to express denunciation and provide deterrence.
Punitive damages are most frequently seen in cases of wrongful dismissal or failure to pay out under an insurance policy for different reasons.
Insurance policies are purchased to give the insured “peace of mind”, so logically, a failure to pay, with additional misconduct, is a harsh blow to the victim, causing mental distress and anxiety (which are not typically covered as compensatory damages in contract cases).
In dismissal cases, the rationale flows from the perceived vulnerability of employees and the impact that mistreatment by employers may have in a limited set of situations, which justifies beyond the typical payments of amounts in lieu of notice.
Payment of punitive damages, however, is not directly related to the impact or insult suffered by the Plaintiff. They are intended to punish, thus, the name.
In the last twenty years, the amounts awarded for serious misconduct have increased greatly. This reflects a better appreciation of the need for deterrence. Courts may, for example, attempt to “strip the profit” gained from the misbehaviour.
The factor we wish to emphasize today is the role played by the size of the defendant. Corporate defendants will frequently be required to pay larger awards. 
Insurance companies, with a few exceptions, tend to be large and profitable. So, a larger award may be necessary. 
The same cannot always be said about employers. In this area, size matters. Multi-national corporations may expect greater penalties than smaller organizations. Bigger is not always better for the employer’s wallet.
For example, in Galea v. Wal-Mart Canada Corp., punitive damages of $500,000.00 were awarded. However, $450,000.00 was also awarded in Pate Estate v. Galway-Cavendish and Harvey (Township), where the Defendant was a small municipality of about 5,000 residents. The difference was in the severity of the misconduct. This is further illustrated by another Wal-Mart decision, Boucher v. Wal-Mart Canada Corp., in which the Ontario Court of Appeal, about six months after the Pate Estate decision, reduced a million-dollar punitive damage award to $100,000.00.
- There is no way to scientifically determine or predict punitive damages
- Larger corporate defendants may be subject to larger punitive damage awards
- However, the biggest factor still appears to be the court’s perception of the relative wrongfulness of the misconduct
- Courts will continue to consider other factors, as enumerated in the Whiten decision, such as:
- Was there moral turpitude involved?
- Has the Defendant apologized or expressed remorse?
- Have criminal penalties been imposed?
- The relative vulnerability of the Plaintiff
- Any advantage (or profit) gained by the Defendant
- Have punitive damages been awarded against this Defendant in the past?
WHAT WEILERS LLP CAN DO TO HELP YOU
If there is a question about how to calculate or prove damages, we have the benefit of having Brian Babcock as counsel. Brian has taught the course on Remedies, including damages, numerous times for the Bora Laskin Faculty of Law.
We know the law of damages, the rules of evidence, the art of advocacy, and how to blend them together to get the best possible results.
Our labour and employment team also are experienced in advising employers on how to avoid claims of misconduct in employee relations to prevent problems before they arise.
 See Cassels and Adjin-Tettley, Remedies: The Law of Damages third edition pp. 337-340
 Whiten v Pilot  1 SCR 585; Branco v American Home Assurance Co. 2013 SKQB 98