October 30, 2006
Northern Punitives, Eh?
The Ontario Court of Appeal recently ruled on a punitive damages case with strikingly similar considerations as those evaluated by U.S. courts -- in particular those the Supreme Court will presumably be considering tomorrow in the Williams case.
In applying this principle [of proportionality] to the facts of this case, the Court held that a punitive damage award must be proportionate to the blameworthiness of the employer’s conduct, with particular attention paid to the duration of the misconduct. . . . The Court also considered whether [the defendant's] conduct in relation to [the plaintiff] was malicious and high-handed. . . .
The decision of the Court of Appeal also cautions against placing too much weight on the relative size of the corporate defendant in assessing punitive damages, recognizing that "Indiscriminate use of the relative power of the defendant and the plaintiff as a significant factor would lead to unprincipled awards." [T]he Court recognized that a defendant’s financial power could become relevant where it may rationally be concluded that a lesser award would fail to achieve deterrence. . . .
As part of the proportionality analysis, the Court also considered the totality of all other damages assessed against [the defendant] including the compensatory damages awarded [in this case].
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The leading case in Canada on punitive damages in a contractual contract is Whiten v. Pilot Insurance, in which the Supreme Court held that the instructions to the jury should have these directions:
(1) Punitive damages are very much the exception rather than the rule,
(2) imposed only if there has been high-handed, malicious, arbitrary or highly reprehensible misconduct that departs to a marked degree from ordinary standards of decent behaviour.
(3) Where they are awarded, punitive damages should be assessed in an amount reasonably proportionate to such factors as the harm caused, the degree of the misconduct, the relative vulnerability of the plaintiff and any advantage or profit gained by the defendant, (4) having regard to any other fines or penalties suffered by the defendant for the misconduct in question.
(5) Punitive damages are generally given only where the misconduct would otherwise be unpunished or where other penalties are or are likely to be inadequate to achieve the objectives of retribution, deterrence and denunciation.
(6) Their purpose is not to compensate the plaintiff, but
(7) to give a defendant his or her just desert (retribution), to deter the defendant and others from similar misconduct in the future (deterrence), and to mark the community's collective condemnation (denunciation) of what has happened.
(8) Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives, and
(9) they are given in an amount that is no greater than necessary to rationally accomplish their purpose.
(10) The jury should be told that while normally the state would be the recipient of any fine or penalty for misconduct, the plaintiff will keep punitive damages as a "windfall" in addition to compensatory damages.
(11) Judges and juries in our system have usually found that moderate awards of punitive damages, which inevitably carry a stigma in the broader community, are generally sufficient.
Posted by: Michael Webster | Oct 31, 2006 4:45:36 AM