The pursuit of aggravated damages has to be made viable

In Cottrill v. Utopia Day Spas and Salons Ltd., 2018 BCCA 383, the B.C. Court of Appeal (“BCCA”) overturned a lower court’s decision to award $15,000 in aggravated damages.

The crux of the decision reads as follows, and in a vacuum I note that the following excerpt is eminently reasonable.

Given the lack of an evidentiary basis for the finding of mental distress caused by the manner of dismissal, it was an error in principle for the trial judge to make an award of aggravated damages.

Reading all of the case law together, however, the existence of aggravated damages is rendered all-but meaningless since it would appear there is almost no cost-effective way to pursue them. Any award which would have been worth fighting for in the first instance has almost invariably been taken away on appeal. The system is, at its root, premised on litigants acting in a financially reasonable manner.

There is no doubt that damages should be awarded if and when the evidence substantiates them. I have no qualms with that principle. But Canadian courts have long held that in any instance where a legal right exists, there must be an effective remedy (see Macaraeg v. E Care Contact Centers Ltd., 2008 BCCA 182, for example). The existence of damages which cost more to pursue than they are worth if/when awarded helps nobody. Yet that is the exact regime in which we now find ourselves. I am speaking from experience. Dozens of times every year I consult with people who have legitimate arguments for these damages, but the most responsible legal advice I know how to give is telling them to forego these claims because pursuit of them is not viable on a risk-reward basis.

Let us remember as well that aggravated damages (and their oft-misunderstood cousin punitive damages) are supposed to be awarded in circumstances which are really bad to begin with.

There is a historically-entrenched power imbalance as between employer and employee. The Supreme Court of Canada has mandated lower courts with the task of striking a fairer balance. The case law relating to aggravated damages does not currently achieve this balance. Terminated individuals often have difficulty finding the means to pursue litigation at all. If we are to foster a regime in which three-day trials now run to four or five days and where expert evidence is called by one or more of the parties at thousands of dollars in expense, I would suggest that the damages at the end of that road ought to justify the expense and effort incurred. In the Cottrill case (linked above), the damages in question were $15,000. I would argue this modest sum already fails to achieve the balance for which I advocate herein. Taking them away makes the problem far worse.

As far as I am aware, no court has directly considered setting aggravated damages in an amount that reflects the real and substantial costs of litigation. In my view that is exactly what is called for.

I respectfully suggest that advocates should encourage courts to consider implementing a regime wherein persons with legitimate claims are incentivized to pursue them. This would involve setting the quantum of the damages awarded at an amount which justifies the rigours of evidence required to prove them. Without simultaneously considering these factors, the regime might remain as it currently is, with individuals who have suffered real harm giving up far more often than fighting for what is right.

Martin Sheard assisted me, and his work was first-rate. He was knowledgeable, efficient, and made me absolutely confident that I had received exactly the legal services I needed.
— Joe Broadhurst / Managing Partner, Broadhurst Kooy Family Law

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Martin Sheard has advocated at the Supreme Court of Canada on behalf of financially marginalized Canadians. Only about once every two years does the Supreme Court of Canada hear an employment law case, so this was a special moment for Martin.