What is the difference between aggravated and punitive damages in Canada?
Aggravated damages are compensatory - they compensate for additional intangible harm (humiliation, distress) caused by the defendant's high-handed or malicious conduct. Punitive damages are non-compensatory - they punish and deter reprehensible conduct that departs markedly from ordinary standards of decency, as set out in Whiten v Pilot Insurance (2002).
When are punitive damages awarded in Canada?
Punitive damages are exceptional. They require conduct that is malicious, oppressive, high-handed, or a marked departure from decent behaviour - such as an insurer's bad-faith denial of a valid claim. Courts follow the Whiten proportionality analysis and award only what is rationally required to punish and deter.
How large are punitive damage awards in Canada?
Canadian punitive awards are far more restrained than US ones. Whiten upheld $1 million against a bad-faith insurer, which remains high by Canadian standards. Most punitive awards are in the tens of thousands to low hundreds of thousands, guided by proportionality to the blameworthiness and the compensatory award.
What is the proportionality principle from Whiten?
Whiten v Pilot Insurance requires punitive damages to be proportionate to: the blameworthiness of the conduct, the vulnerability of the plaintiff, the harm directed at the plaintiff, the need for deterrence, any other penalties paid, and the advantage wrongfully gained. The award should be the lowest amount that serves its purpose.