Canadian law regarding aggravated and punitive damages continues to change and evolve, and these have become especially important in cases involving insurance companies and bad faith claims. But what exactly is aggravated and punitive damages? What makes one different from the other, and what is the aim of each?
The focus of aggravated damages is to compensate the plaintiff (the victim of the crime) for an actual loss that has occurred. The harm to the plaintiff is measured, and appropriate damages are awarded. In Alberta, aggravated damages can range from $10,000 to $100,000.
The most common reasons for aggravated damages are a contract breach (such as an employment contract) or insurance claims being denied. Proof must be provided to show that mental distress and aggravation did occur. Injuries involved in cases resulting in aggravated damages are intangible. Generally, they result in the plaintiff having experienced anguish, anxiety, wounded pride, damaged self-confidence, lowered self-esteem, indignation, and so on.
Punitive damages do not focus on compensating the victim but rather on punishing the crime or wrong-doing. They are a reaction to wrongful conduct and are used where general and aggravated damages do not seem to suffice.
To determine the amount of punitive damages awarded, the court does not consider the level of injury experienced by the plaintiff but rather the disregard for the law by the defendant (the individual who committed the wrong-doing). Proof of malicious conduct on the defendant’s part must be provided, but unlike with aggravated damages, proof of injury is not required. The defendant’s actions must be categorized as either malicious, high-handed, or outrageous for punitive damages to apply, and damages generally range from $50,000 to $1,000,000. Often, defendants in such cases are large organizations or corporations.
For example, there is an ongoing case between CBC and Lee Lalli, a Montreal businessman, as CBC linked Lalli to the Mafia in an investigative Enquête episode. Lalli claims that this episode hurt his reputation and honour, and that factually incorrect information was presented as true. Due to the extreme claim that he is linked to such a group, Lalli is seeking punitive and compensatory damages.
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