People often ask me about the differences between the Canadian and American legal systems. One of the most significant differences is the size of damages awards for pain and suffering.
We often hear about American cases in which injured people receive damages awards in excess of $1 million for pain and suffering. The law in Canada is very different.
In Canada there is a “cap” on damages for pain and suffering. The cap was introduced by the Supreme Court of Canada in a 1978 decision. At that time, the cap was set at $100,000. It is now about $325,000, when adjusted for inflation. This can seem like a paltry amount to a person who has suffered a life changing spinal cord or brain injury.
Because of the cap, our law does a poor job of compensating catastrophically injured people for their pain, suffering and loss of enjoyment of life. Our law does a much better job compensating for economic losses. Injured people are entitled to recover damages for their loss of earning capacity and the cost of their future care. Those economic losses can total millions of dollars in cases where people are catastrophically injured.
There is a perception that accident victims in the United States sometimes receive a windfall because of the large amounts awarded for pain and suffering. Accident victims in Canada receive no such windfall. When we recover large damages awards for our injured clients, the money compensates our clients for their loss of earning capacity and the cost of their future care. The most that we can recover for pain and suffering is $325,000.