Punitive Damages

Introduction

Punitive damages
Damages awarded in a civil lawsuit in order to punish wrongdoing of a greater culpability than simple negligence, without regard to compensating the plaintiff’s actual loss. Punitive damages are intended as a deterrence. Some states prohibit insurance of punitive damages on the grounds that spreading the risk of punishment for willful misconduct lessens the deterrent effect. Some policies specifically exclude coverage for punitive damages, while others rely on state laws.

Punitive damages in Canada
Punitive or exemplary damages are generally only available in Canada where there is proof of malicious conduct on the part of the defendant. Canadian courts are generally careful in exercising their discretion to award these damages, which are an exception to the time-honored principle that civil damages seek to compensate the victim. As the term implies, “punitive” damages are meant to punish the offending party rather than to compensate the plaintiff.
There are two sources of punitive damages in Canada – the Common Law and statutes. Historically, punitive damages were not available in Quebec civil law but are now provided for in certain legislation.

Aggravated damages, as distinguished from punitive.
A court may order an amount, in addition to the regular damages, because the plaintiff’s feelings were hurt due to the defendant’s behavior.

The formal distinction is that aggravated damages are given to compensate the plaintiff when the harm done to him by a wrongful act was aggravated by the manner in which the act was done;
exemplary / punitive damages, on the other, are intended to punish the defendant, and presumably to serve one or more of the objects of punishment – moral retribution or deterrence.

Aggravated damages are commonly described as being awarded for conduct which shocks the plaintiff, while exemplary awards are for conduct that shocks the court. Aggravated damages would
ordinarily be covered by a policy wording covering liability to pay compensation.

Compensatory damages
Money awarded in a civil lawsuit to make an injured person whole, including recompense for damaged property, lost wages or profits, pain, bereavement, medical expenses, etc.; pecuniary
compensation for a person’s out-of-pocket losses and future expenses due to injury, disability, disfigurement, pain and suffering, and all actual losses, whether economic or non-economic.

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