Actuarial Notes

Cap on Non-Pecuniary Damages

Study guide: Exam 6C

The Cap on Non-Pecuniary Damages (the trilogy's rough upper limit) is the ceiling Canadian courts place on general damages for non-pecuniary loss — the non-economic loss from physical or psychological pain and suffering — in personal injury cases: \$100{,}000, set by the Supreme Court of Canada's 1978 trilogy of decisions (Andrews v. Grand & Toy Alberta Ltd., Teno v. Arnold, Thornton v. Prince George School District No. 57) and indexed for inflation. It limits only the non-pecuniary head of a tort award; loss of income and future care are compensated in full. The Fall 2026 syllabus covers it in the Davidson reading (objective A2).

\begin{aligned} \text{Award} = {} & \text{Pecuniary} \\ & + \min\bigl(\text{Non-pecuniary},\, C_t\bigr) \end{aligned}

C_t = \$100{,}000 \times \frac{P_t}{P_{1978}}

  • C_t is the cap at the date of the award and P_t / P_{1978} the rise in prices since the trilogy; Davidson puts the indexed cap at \$311{,}483 as of December 2006. The pecuniary heads are untouched. The cap is on non-pecuniary general damages, not Punitive Damages: the examiner's reports single out confusing the two.
  • Why Dickson J. capped it (Andrews), four reasons:
    • The claim of a severely injured person is virtually limitless, and with no objective yardstick, awards are inconsistent and widely extravagant.
    • Such damages are not really "compensatory", since no money can provide true restitution; they provide additional money to make life more endurable.
    • The plaintiff is fully compensated for future loss of income and future care, which are arguably more important to ensuring the injured person is well cared for. Davidson draws from this the assumption behind the cap: pecuniary loss is fully compensated, "a co-ordinated and interlocking basis for compensation".
    • Exorbitant awards lead to an excessive social burden: unaffordable increases in insurance and social costs. In Teno, Spence J. feared a world where "none but the wealthy could own or drive automobiles".
  • How it hardened. In Fenn v. City of Peterborough (Ont. C.A., 1979) the court awarded \$125{,}000, citing the erosion in the value of money since the trilogy trials and the plaintiff's more substantial pain. It was never appealed, and it remains the only appellate award above the cap. In Lindal v. Lindal (1981) the Supreme Court held that injuries are not to be compared between plaintiffs: \$100{,}000 is the limit for all such cases, and it is the \$100{,}000, not the award, that is raised for inflation. In ter Neuzen v. Korn (1995) the Supreme Court said the trilogy had imposed the limit as a "rule of law". Where a jury's award exceeds it, the court substitutes an award at the cap.
  • Lee v. Dawson. A jury's \$2{,}000{,}000 was cut to \$294{,}600, the indexed cap at the time. The plaintiff argued that the cap offends the Charter's section 15 equality values, since it denies full compensation only to the most seriously injured. The B.C. Court of Appeal rejected that, because general damages were never meant to give "full" compensation. It listed the other arguments against the cap, found some of them compelling, and held that it could not overturn the trilogy. On October 19, 2006 the Supreme Court dismissed leave to appeal without reasons, so the cap remains the law.
  • Where the cap does not apply: sexual assault (S.Y. v. F.G.C., B.C.C.A.); defamation (Hill v. Church of Scientology, \$300{,}000 general damages); and negligence causing economic loss (Young v. Bella, where the Supreme Court refused to cap a jury's \$430{,}000). In each case the policy concern behind the cap, social cost, was not made out. Some published answers file Young v. Bella under defamation, but the paper treats it as negligence causing economic loss.
  • A statutory cap is a different thing. A province can legislate its own cap for a class of injury. The published answer to a 2016 question turns on Morrow v. Zhang (a case in the current Landmark Legal reading), in which Alberta's cap on non-pecuniary damages for minor injuries was struck down at trial on Charter grounds, and the Court of Appeal reversed that ruling and upheld the cap. It is a tort reform tool, alongside the threshold and deductible, and it is distinct from the trilogy, which caps every injury.

Applying the Indexed Cap A young plaintiff suffers a catastrophic brain injury in a car accident. The jury assesses \$1{,}500{,}000 for pain, suffering and loss of amenities, \$2{,}000{,}000 for future loss of income and \$3{,}200{,}000 for future care. Prices have risen 20\% between December 2006, when the indexed cap stood at \$311{,}483, and the date of the award.

What does the court award? And what would a second plaintiff receive, whose permanent knee injury is assessed at \$90{,}000 non-pecuniary?

Answer The cap at the date of the award. The \$100{,}000 is indexed, not the award:

\begin{align*}
C_t &= \$311{,}483 \times 1.20 \\
&= \$373{,}780
\end{align*}

The award. The court substitutes the cap for the jury's non-pecuniary figure and leaves the pecuniary heads alone:

\begin{align*}
\text{Pecuniary} &= \$2{,}000{,}000 + \$3{,}200{,}000 \\
&= \$5{,}200{,}000 \\[4pt]
\text{Non-pecuniary} &= \min(\$1{,}500{,}000,\; \$373{,}780) \\
&= \$373{,}780 \\[4pt]
\text{Award} &= \$5{,}200{,}000 + \$373{,}780 \\
&= \$5{,}573{,}780
\end{align*}

The cap removes \$1{,}126{,}220, all of it from pain and suffering. The income loss and the care costs, which Dickson J. called arguably more important to the plaintiff's future care, are paid in full.

The second plaintiff receives the full \$90{,}000, since the cap binds only above \$373{,}780. That asymmetry is the equality argument in Lee v. Dawson: only the most seriously injured lose part of their assessed damages. The courts' answer is Lindal: non-pecuniary awards are not meant to match the gravity of the injury, and the \$100{,}000 is the upper limit for all such cases, for uniformity and predictability.

Does the Cap Apply? For each claim, say whether the trilogy cap limits the non-pecuniary award.

  1. A victim of sexual assault sues her assailant.

  2. A professional sues a newspaper for defamation.

  3. A university's negligent handling of a student's file destroys her career prospects, with no physical injury.

  4. A plaintiff injured in a car crash argues that her injuries are worse than Andrews' and that inflation has eroded the \$100{,}000, so her award should exceed the indexed cap.

  5. A province's auto statute limits non-pecuniary damages for minor soft-tissue injuries to a fixed amount.

Answer

  1. No. In S.Y. v. F.G.C. the B.C. Court of Appeal rejected the idea that the cap applies to sexual assault.
  2. No. In Hill v. Church of Scientology the Supreme Court held there is no cap for defamation.
  3. No. In Young v. Bella the Supreme Court held that the case for capping negligence causing economic loss was not made out, and it left the jury's \$430{,}000 standing.
  4. Yes, and both arguments fail. Lindal bars comparing injuries between plaintiffs. Inflation is dealt with by indexing the \$100{,}000 itself, which the indexed cap already does. The argument that won in Fenn (\$125{,}000 in 1979) is the only appellate exception, and it was never tested in the Supreme Court. Under ter Neuzen, an award above the cap is replaced by the cap.
  5. This is a different cap. It comes from the statute, not the trilogy, and a challenge to it is a Charter question about that legislation. In Morrow v. Zhang, Alberta's minor-injury cap survived a Charter challenge at the Court of Appeal.

What the three exceptions share is the reason for them. In Young v. Bella the Supreme Court quoted S.Y.: there was "no evidence" that such cases have "any impact on the public purse", and no cap was needed to protect the public from "a serious social burden, such as enormous insurance premiums". The policy reasons belong to catastrophic personal injury from accidents and medical malpractice, and that is where the cap stays.