As part of their claims in litigation parties may seek punitive damages for large amounts. In many cases, these damage claims represent a mere strategy of brinkmanship and are not seriously pursued.

In the estates context on present practice in Ontario, it is rare that punitive damages are even sought. I also cannot recall in recent memory a reported case in which they have been awarded. But I posit that things could change.

The Ontario courts have shown an increasing tendency to drive resolutions of estate litigation in the early stages through mediation and, if unsuccessful, discourage it through the threat or imposition of cost orders. The root cause of this approach has been rising claims and shrinking court resources. The judges have become creative in managing their caseloads through costs (Recent Quote – “Costs drive the system”). I think the court may try punitive damages on next.

Expect an estates court to make a punitive damages award to remind the bar and the litigants that the use of the court system is not free and there are serious financial risks.

In the recent decision of Boucher v. Wal-Mart 2014 ONCA 149 (CANLII) a jury awarded significant, almost landmark, levels of punitive and related damages. These damages are rare as they do not seek to compensate but rather seek to punish outrageous behavior and bolster public policy. Jury trials, outside of the personal injury area, are also rare in Ontario.

In Wal-Mart the jury awarded $100,000 for intentional infliction of mental suffering, $200,000 for aggravated damages, and $1,000,000 for punitive damages. The case involved a claim by a constructively dismissed employee who had been treated in a demeaning and humiliating fashion by her employer.

The punishment damages were thus $1,300,000 – atmospherically above and beyond the actual lost salary damages of 20 weeks. The jury was sending a message to employers.

The decision was appealed and the punitive damages reduced from $1,000,000 to $100,000, but that still left $400,000 of punishment damages. The judges of the Ontario Court of Appeal were also sending a message to employers.

Expect the trial level of the Ontario courts, including the Estates List in Toronto, to seize on this in the coming years. Punitive damages are back in town.

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