See Ontario Law Reform page673 Commission Report on Exemplary Damages 1991 at p

See ontario law reform page673 commission report on

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awards. (See Ontario Law Reform [page673] Commission, Report on Exemplary Damages (1991), at p. 37.) 162 In the case of disputes concerning damage to property or economic interests, the retributive aspect of the law should not play a major role in litigation. Granting an indemnity of about three times the compensation for loss of property under an insurance policy fulfills no rational function. Despite the moral satisfaction we may derive from giving a good whack to an insurance company and some misguided middle managers, the verdict of the jury does not much advance the case of sound and fair management in the insurance industry. The award fails the rationality test because its sole purpose remains to punish adequately bad faith and unfair dealing by employees of Pilot and its counsel. It does not address any widespread practice in the insurance industry. It does not pretend to effect a disgorgement of unfairly acquired profit. The punishment far exceeds whatever property or economic losses may have been caused by the nonperformance of the contract. In such cases, the criterion of proportionality requires that the use of punitive damages remain carefully controlled and that punitive damages should not significantly exceed the amount of damages to property, or economic interests, including aggravated damages, if any are claimed. 4. Control of Awards 163 While Canadian courts have not imposed formal caps on punitive damages, the discretionary [page674] nature of such awards and the difficulties of setting amounts in a rational manner indicate that proper instructions should be given to juries about factors and methods to be used in the difficult task of assessing punitive damages. In my respectful view, that is exactly the concern that the Ontario Court of Appeal attempted to address. Finlayson J.A. not only found that the award was too high, but that it was so high as to be unreasonable and to require interference by the Court of Appeal. The majority adopted a figure which appears reasonable and proportionate. It imposed significant punishment for the bad faith of Pilot without upsetting the proper balance between the compensatory and punitive functions of tort law. 164 Moreover, flexibility and discretion are not the only values at stake in the development of legal rules in the law of damages. Some degree of predictability and consistency should also be factored into situations where the nature of the damages suffered makes it difficult for a jury to determine a proper quantum, as in the case of non-monetary losses and personal injury litigation. In this area, it should be remembered that our Court deemed it necessary to impose formal caps or a "bright line". In the 1978 trilogy Andrews v. Grand & Toy Alberta Ltd., [1978] 2 S.C.R. 229; Thornton v. Board of School Trustees of School District No. 57 (Prince George), [1978] 2 S.C.R. 267; and Arnold v. Teno, [1978] 2 S.C.R. 287, at p. 334, the Court set a cap of $100,000 for damages which were intended as restitution for non-monetary losses after adjustment for inflation; our Court has kept this cap in place ever since.
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