In 1978, the Supreme Court of Canada introduced a cap on general damages (pain and suffering) through a series of landmark cases known as the “trilogy”. This cap, initially set at $100,000 for non-pecuniary losses such as pain and suffering, has been adjusted over time for inflation and currently stands at approximately $400,000. The suggested purpose of the cap was to promote fairness and consistency in personal injury compensation, ensuring that awards for pain and suffering did not become excessive or unpredictable. In my respectful view, the rationale for the cap is flawed and it results in an extremely unbalanced compensation for injury victims. The reality is that the most severely injured people in Canada are the most prejudiced by the cap on pain and suffering, while people with modest injuries are fully compensated for their pain and suffering. The prejudicial outcome for seriously injured Canadians greatly outweighs any suggested benefit of a cap on pain and suffering remedies.
In my view, the cap on general damages is inconsistent with the fundamental principles of civil justice. The cap unfairly penalizes the most severely injured Canadians by preventing full compensation for their non-economic losses while allowing those with minor injuries to be fully compensated. The article will explore the origins of the cap, its rationale, and how it disproportionately harms the most vulnerable injury victims. It will also examine how the cap undermines the basic principle of civil justice by devaluing non-economic losses and preventing courts from awarding fair and adequate compensation to the most severely injured individuals. The Origins of the Cap on General Damages - Pain and Suffering The cap on general damages was established in 1978 by the Supreme Court of Canada in a trio of cases: Andrews v. Grand & Toy Alberta Ltd., Thornton v. Prince George School Board, and Arnold v. Teno. These cases involved victims who had sustained catastrophic injuries, such as quadriplegia and brain damage, requiring lifelong care. In each case, the Court was tasked with determining the appropriate level of compensation for non-pecuniary losses, which include pain and suffering, emotional distress, and loss of enjoyment of life. The Supreme Court recognized that while economic losses—such as lost income and future care costs—could be calculated with some precision, non-pecuniary damages were more difficult to quantify. The Court expressed concern that awards for pain and suffering should not become excessive, as this could lead to unpredictability in the justice system and increased insurance premiums. To address these concerns, the Court imposed a cap on general damages, initially set at $100,000, to act as a ceiling for non-economic compensation. This cap was meant to promote fairness and consistency, ensuring that non-pecuniary damages remained proportionate across different cases. The Disproportionate Impact on the Most Severely Injured While the cap may have been intended to prevent excessive awards, it is a poor solution. It is for local judges and juries to decide the verdict in the context of the facts of the case. There are other remedies to challenge or overturn court decisions that are not supported by the law or facts of the case. A cap is a poor solution. In Canada, it has resulted in a disproportionate harm to the most severely injured individuals. For minor or moderate injuries, the cap does not pose any barrier to fair compensation, as the general damages awarded for pain and suffering often fall within the capped amount. In these cases, plaintiffs may feel that their compensation adequately reflects their pain and suffering. On the other hand, for individuals with catastrophic injuries—such as quadriplegia, severe brain injuries, or total loss of mobility—the cap on general damages for pain and suffering creates a significant shortfall. These individuals, whose entire lives are irrevocably altered, are limited to the same capped amount as those with far less severe injuries. As a result, the most severely injured Canadians are effectively under-compensated for the profound physical, emotional, and psychological toll that their injuries impose on them and their families. This disparity highlights a fundamental flaw in the cap system: it treats all injuries as though they are comparable, even when the harm suffered varies dramatically. For the least injured, the cap is rarely an issue, as their compensation for pain and suffering typically falls well within the capped limit. But for those who suffer catastrophic injuries, the cap prevents them from receiving full and fair compensation. The one-size-fits-all approach flattens the scale of justice, failing to reflect the vastly different impacts that severe injuries can have on individuals’ lives. Inconsistent with the Principles of Civil Justice One of the core principles of civil justice is that a victim should be fully compensated for the harm they have suffered, whether that harm is economic or non-economic. This principle is rooted in fairness and accountability, ensuring that those responsible for causing injury are held to account and that victims are made whole to the extent that is possible through financial compensation. Yet, the cap on general damages for pain and suffering disrupts this principle by arbitrarily limiting compensation for non-economic losses. Civil remedies are designed to restore the injured party to their pre-injury state. When an individual sustains a serious injury, they suffer not only economic losses, such as lost wages and medical bills, but also non-economic losses, such as pain, suffering, and the loss of their quality of life. In the civil justice system, monetary compensation is the only remedy available to address these non-economic losses. Courts cannot reverse time or restore a victim’s health, but they can award financial compensation to acknowledge the harm and provide some measure of relief. The imposition of a cap that limits general damages restricts the courts’ ability to fully compensate individuals for their non-economic losses. For victims of catastrophic injury, the emotional and psychological suffering they endure is often profound. Their quality of life is permanently diminished, and the pain they experience can be lifelong. The cap, by artificially limiting the amount that can be awarded for these losses, forces courts to award compensation that does not fully reflect the extent of the harm suffered. The Devaluation of Non-Economic Losses A troubling aspect of the cap on general damages is the implicit devaluation of non-economic losses compared to economic losses. Economic losses, such as lost income and future care costs, are not subject to the same rigid limits as non-economic losses. This creates the impression that economic harm is more significant or more deserving of compensation than the pain and suffering experienced by the injured party. For many injury victims, particularly those with life-altering injuries, non-economic losses can be the most devastating. The loss of mobility, independence, and the ability to enjoy life can have a more profound impact on a person’s well-being than the loss of income or the cost of medical care. Yet, the cap treats these non-economic losses as secondary, limiting compensation for the very aspects of the injury that have the most personal and lasting effect on the victim. The distinction between economic and non-economic damages reflects a flawed understanding of what it means to suffer harm. Economic damages can be calculated with some precision, but non-economic damages often represent the deepest, most personal losses—those that fundamentally alter how an individual experiences the world. By capping general damages, the legal system is effectively saying that these losses are less important or less deserving of compensation than financial losses, a notion that is both outdated and unjust. Prioritizing Insurance Costs Over Catastrophic Injury Victims One of the key rationales behind the cap on general damages, particularly in cases of pain and suffering, is the concern over the rising cost of insurance. Proponents of the cap argue that limiting non-economic damages helps keep insurance premiums manageable for individuals, businesses, and public institutions. However, this perspective effectively prioritizes the financial interests of insurers over the real, tangible suffering experienced by those with catastrophic injuries. By capping damages for pain and suffering, the legal system is placing a higher value on protecting the insurance industry from potential costs than on compensating individuals whose lives have been irrevocably damaged. This approach fails to account for the profound, life-altering losses these victims endure—losses that cannot be fully quantified in economic terms. While maintaining reasonable insurance premiums is important, it should not come at the expense of fairly compensating the most severely injured individuals, whose suffering extends far beyond the economic impact. A Call for Reform The cap on general damages in Canada needs to be revisited and reformed. While the cap may serve a purpose in limiting excessive awards in cases of minor injury, its rigid application to cases of catastrophic injury creates significant injustice for the most severely injured. These individuals, whose lives are permanently and profoundly affected, deserve compensation that fully reflects the depth of their suffering. Reforming the cap would involve recognizing the profound impact that non-economic losses have on injury victims, particularly those with catastrophic injuries. The civil justice system should allow for greater flexibility in awarding non-pecuniary damages, ensuring that those who suffer the most are not penalized by an arbitrary limit on their compensation. A more nuanced approach, one that takes into account the severity of the injury and the extent of the harm, would restore balance and fairness to the system. Andrew Iacobelli is an experienced personal injury lawyer who established Iacobelli Law Firm with offices located in Ontario, Canada and Florida, U.S.A. Andrew restricts his practice to the representation of personal injury victims in claims involving serious injuries, Catastrophic Injuries, and wrongful death in Canada and the United States. Andrew is a lifetime member of the Million Dollar Advocates Forum, and the author of "Are You a Canadian Injured in the United States? Claim the Damages and Insurance Coverage the Right Way". Andrew also hosts a popular podcast and YouTube channel on the subject of personal injury law and the rights of injury victims.
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