Assessment of Damage Awards in Health Law Actions

Introduction

The term "damages" refers to the compensation sought by plaintiffs in their actions against another party, which, in a health law matter, is often one or more health care professionals. The usual cause of action is based on negligence. An assessment of damages is made in every action whether the plaintiff is successful or not.

The global quantum of damage awards in health law actions has been on a steady rise. This is so despite the reported decrease in the number of actions commenced against health care professionals. What then is the process of assessing damages in such actions and why is the average quantum awarded on a steady rise?

Methodology

The methodology of assessing such damage awards was set out in 1978 by the Supreme Court of Canada (SCC) in Andrews v. Grand & Toy Alberta Ltd. Although this involved a motor vehicle accident, the principles of assessment are the same. The SCC’s general approach was as follows:

There is a duty to be reasonable. There cannot be "complete" or "per­fect" compensation. An award must be moderate and fair to both parties. Clearly, compensation must not be determined on the basis of sympathy, or compassion for the plight of the injured person. What is being sought is compensation, not retribution. But, in a case like the present, where both Courts have favoured a home envi­ronment, "reasonable" means reasonableness in what is to be provided in that home environment. It does not mean that Andrews must languish in an institution which on all evidence is inappropriate for him. The ability of the defendant to pay has never been regarded as a relevant consideration in the assessment of damages at common law. The focus should be on the injuries of the innocent party. Fairness to the other party is achieved by assuring that the claims against him are legitimate and justifiable.

Heads of Damage

The courts have established various heads of damage through which the goal of fair compensation is determined. There is also an important distinction made between pecuniary (money) and non-pecuniary losses. The goal is to award as close to perfect pecuniary compensation as is possible while limiting the award for non-pecuniary losses, such as pain and suffering, loss of amenities and loss of expectation of life.

The heads of damage are as follows:

• Pecuniary Losses:
  • For the cost of future care arising from the injuries and disabilities suffered by the plaintiff which were caused by the negligence;
  • For the loss of future earnings by the injured plaintiff which were the result of the negligence;
  • For special damages, being the loss of earnings and any other expenses incurred and paid up to the date of the assessment, and again, which were caused by the negligence.

• Non-Pecuniary Losses:
  • In Andrews, the SCC set a cap for these damages at $100,000.00 except in exceptional circumstances. This means that the award would rarely exceed this limit.

Rising Awards

The quantum of gross damage awards becomes easier to understand knowing what the heads of damage are. It is easy to see that as the costs of goods and services rise, so do the awards for future care and special damages. Further, as the income earned by individuals rises, so do the awards for loss of future earnings. Finally, the upper limit of non-pecuniary damages awarded by a court is now $388,319 as of June of this year. That in itself is almost a four-fold increase.

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