Skip to content

Client Update: Supreme Court of Canada dismisses appeals in punitive damages cases

The Supreme Court of Canada has dismissed the appeals in Bruce Brine v. Industrial Alliance Insurance and Financial Services Inc.1 (with costs) and Luciano Branco, et al. v. Zurich Life Insurance Company Limited, et al.(without costs). Both of these cases dealt with large awards for punitive damages and mental distress damages which were substantially reduced at their respective Courts of Appeal.

The Courts of Appeal decisions therefore stand. In Brine, the Nova Scotia Court of Appeal reduced damages for mental distress from $180,000 to $90,000, and punitive damages were reduced from $500,000 to $60,000. In Branco, the Saskatchewan Court of Appeal reduced damages for mental distress from $450,000 to $45,000 and punitive damages were reduced from an unprecedented $4.5 million to $675,000.

Please see our previous Client Update on Brine, which set out the following lessons learned:

  • The standard of good faith applies to discretionary services like rehabilitation once offered. In general, insurers must carefully consider how they are handling their files, be able to back up their conclusions with reasonable and rational evidence, and remain forthright in communications with the insured – especially in contracts meant to protect the insured’s “peace of mind.” Insurers will have to be cautious when deciding to commence rehabilitation benefits, as they will not be permitted to stop them even in the face of it appearing the insured will not return to work (without risking a finding of bad faith, and a corresponding award of damages). Insurers may need to consider more explicit provisions in the contract to mitigate what could be a significant change in the way rehabilitation benefits have been engaged in the past.
  • Courts in Nova Scotia are not hesitating to award large damages awards against insurers, whether they are contractual damages for the insured’s mental distress, or punitive damages for particularly egregious conduct by the insurer. Further, if an insurer has a history of such awards imposed against them in other cases, this will likely increase the frequency and amount of punitive awards against the same insurer.

Although Stewart McKelvey was not involved in the Brine or Branco cases, if you would like to discuss the implications of these Court of Appeal decisions in greater detail, or would like advice on avoiding bad faith damages, please contact Patricia MitchellMichelle Chai or the other members of the Stewart McKelvey Life & Disability Insurance Practice Group.


1 Interestingly, before the Supreme Court of Canada dismissed the appeal in Brine, the Court considered whether the Plaintiff Insured was allowed to file an affidavit from a professor which made a number of statements about misconduct by insurers being exacerbated by low punitive damages. The Court held the affidavit did not assist the Court in determining if the appeal dealt with matters of public importance, and commented the affidavit amounted to an “improper attack on the correctness of the Court of Appeal decision below”. The decision is not publicly available, but can be found on Westlaw at 2016 CarswellNS 205.

SHARE

Archive

Search Archive


Search
Generic filters

 
 

Nova Scotia relaunches Paid Sick Leave Program

January 12, 2022

Rick Dunlop and Will Wojcik Nova Scotia’s COVID-19 Paid Sick Leave Program (“Program”) is now open for applications. Employers can now be reimbursed for employees’ time off work to comply with public health requirements, including…

Read More

Retailer’s mandatory mask mandate – no discrimination based on disability or religious belief

December 30, 2021

Sean Kelly and Will Wojcik A recent decision of the Human Rights Tribunal of Alberta (“Tribunal”) dismissing a customer’s allegations of discrimination based on physical disability and religious belief against a Natural Food Store’s mandatory mask…

Read More

New Brunswick Court of Appeal rejects claim for unjust enrichment in ordinary wrongful dismissal action

December 22, 2021

Clarence Bennett and Lara Greenough In ExxonMobil Business Support Centre Canada ULC v Birmingham, the New Brunswick Court of Appeal considered the equitable remedy of unjust enrichment in the context of an ordinary wrongful dismissal…

Read More

COVID-19 vaccination soon to become mandatory in all federally regulated workplaces in Canada

December 17, 2021

Brian Johnston, QC and Katharine Mack COVID-19 vaccination policies have become more prevalent. Public sector employees have been mandated to get vaccinated in a number of jurisdictions, the federal government has mandated vaccinations in the…

Read More

Work life balance and ban on non-competes – changes to laws in Ontario

December 17, 2021

*Last updated: December 17, 2021 (originally published December 1, 2021) Mark Tector and Will Wojcik Bill 27, Working for Workers Act (“Act”), 2021, received Royal Assent on December 2, 2021, and is now in force in Ontario.…

Read More

Private posts can lead to a lack of academic professionalism: the relationship between social media and post-secondary institutions and the duty of procedural fairness

December 9, 2021

Included in Discovery: Atlantic Education & the Law – Issue 09 (also available in French, here) Tessa Belliveau In its recent and interesting decision regarding Zaki v.  University of Manitoba, 2021 MBQB 178 (CanLII), the…

Read More

A new era: expanded obligations for owners under New Brunswick’s Construction Remedies Act

December 7, 2021

Included in Discovery: Atlantic Education & the Law – Issue 09 Conor O’Neil and Sarah-Jane Lewis Construction lien legislation exists in every province and territory in Canada. Liens are a creature of statute introduced, at…

Read More

A legal lost and found: proposed rules for New Brunswick’s Unclaimed Property Act now published

December 6, 2021

Christopher Marr, TEP and Michael Forestell As detailed in our previous update , in March 2020 New Brunswick implemented the Unclaimed Property Act (“Act”), with the intention that the New Brunswick Financial and Consumer Services…

Read More

Legislative amendments impacting Prince Edward Island companies

December 3, 2021

Margaret Anne Walsh and Graeme Stetson Beneficial Ownership and Corporate Transparency On September 1, 2020, the Government of Prince Edward Island proclaimed into force Bill no. 34 which amends the Business Corporations Act (“BCA”). The…

Read More

What the government is doing to continue support for international students

December 2, 2021

Included in Discovery: Atlantic Education & the Law – Issue 09 Brendan Sheridan With the 2021 fall school semester under way, it has been a year and a half since the COVID-19 pandemic first resulted…

Read More

Search Archive


Search
Generic filters

Scroll To Top