In a decision that will alarm insurance companies, Mr. Justice Bernard Manton has awarded damages of $400,000 for loss of competitive advantage to a plaintiff who was injured in an accident at a Home Depot store. This award is more than twice as much as the highest previous assessment we’ve seen for loss of competitive advantage. But what makes the ruling even more striking is that Justice Manton found that the plaintiff was not credible and that, contrary to her testimony, she “could have continued working”.
The case is St. Prix-Alexander v. Home Depot of Canada Inc. It arose out of a 1999 accident at an Ottawa Home Depot store. An employee was retrieving a box from a shelf, turned and struck the plaintiff in the head and neck area (with the package, apparently).
Justice Manton found that Home Depot’s employee had been negligent. Most of his reasons dealt with the issue of damages.
The plaintiff was 42 at the time of trial. She had worked at the Treasury Board, although she was on parental leave at the time of the accident. She went back to work in 2000. She began working four days a week in 2000 and, in 2006, left work and applied for long term disability benefits.
Following the accident, she complained of neck pain and headaches, as well as difficulties in lifting. She attended for physiotherapy and chiropractic treatments, but did not find these helpful.
The plaintiff began to experience tingling and other neurological symptoms in her extremities and insisted that her family doctor arrange for her to have an MRI. She was diagnosed as requiring spinal decompression surgery, whcih was done in 2003. The plaintiff continued to experience symptoms, including severe headaches.
The medical experts differed as to the cause of the plaintiff’s ongoing problems. Doctors called on behalf of the plaintiff said that the 1999 accident had been causative, the defence doctors said no. Justice Manton preferred the evidence of the plaintiff’s doctors, largely because one defence doctor had done only a “paper review” and had not actually examined the plaintiff.
As noted above, the plaintiff stopped working in 2006. At trial, she took the position that she could never work again. She apparently claimed damages for loss of competitive advantage in the amount of $4,000,000.
In the last part of his reasons, which dealt primarily with income loss, Justice Manton was highly critical of the plaintiff’s testimony. Among his observations:
- when she underwent a two-day vocational assessment, she told the examiner on the first day, that she could no longer speak after a few hours. On the second day, she said that she could not continue after an even shorter period, due to an inability to concentrate. Justice Manton found this strange, saying, “I find it strange that the plaintiff did not display similar difficulties when testifying in this court for more than 13 hours at the trial. In fact, I found that she had a very good memory and was able to remember details of illnesses and jobs going as far back as her college days. She had no difficulty whatsoever testifying in a very effective manner.”
- when the plaintiff extended her parental leave in 2000, she did not tell her employer about the accident. Instead, she said that the reason for the extension was “care and nurturing”. Manton J. said “She was therefore not honest with her employer thinking that it would be to her advantage in the workplace to give an untruthful reason for extending her leave.”
- His Honour went on to observe, “I agree with the solicitor for the defence who said in his argument that it seems that at every opportunity, the plaintiff exaggerated her medical condition. I find that on several occasions, she was not entirely truthful in her answers.”
- “Because of several reasons, I find that the Plaintiff’s evidence is not credible.”
- The plaintiff’s family doctor had seen her on approximately 40 occasions since the accident and she had mentioned her pain to him on only two of those. She claimed at trial that she had complained at almost every visit. Justice Manton said, “I find it difficult to believe that Dr. Morris was told about the pain and headaches at almost every visit and referred to this only twice in his notes.”
- He rejected the plaintiff’s claim, that she was entitled to damages for loss of income: “Except for the time she was on maternity leave and the leave of absence that she took when she was operated in 2003, she worked mostly on a full-time basis until the month of June 2006…I have therefore come to the conclusion that the Plaintiff could have continued working as a public servant. No effort was made by her to find a less stressful job or to find out if she could be accommodated by her employer by working regular hours at a job with less responsibilities.”
Despite these findings, Justice Manton awarded damages for loss of competitive advantage, in the amount of $400,000. He gave no explanation as to how he arrived at such a figure. It appears though, that the award was based on the following considerations:
It is clear that the Plaintiff was injured in the accident at Home Depot and that the injury sustained by her caused her a lot of inconvenience and suffering however, I do not believe that she will be unable to work in the future. Her doctor did not recommend that she cease working. It was a decision she made on her own and the doctors were faced with a “fait accompli” because she felt that she could not go back to work. She is now on long-term disability and receiving 70% of her salary but there was no evidence introduced at the trial to indicate the medical reason why she is on long-term disability. I have no doubt she has a loss of competitive advantage because of the injuries sustained by her and she will suffer economic loss because of the fact that she can no longer work 60 hours per week and her ability to compete for employment has been impaired. She can no longer accept jobs that demand a lot of concentration and as stressful as an Executive Assistant. She will therefore be less attractive to her employer than a comparable individual not impaired in any way. The fact that she is now unable to work at the Executive 1 or 2 levels in the Public Service is compensable in damages.
(Non-pecuniary general damages were assessed at $75,000.)
Generally, awards for loss of competive advantage do not reach six figures, let alone $400,000. An explanation of this head of damages was given by G.R. Morin J. in the 1997 case, Earl v. Lang:
While I am of the view that Gary is entitled to an award of damages for loss of competitive edge, there being a real and substantial risk that he may lose income in the future because of a competitive disadvantage sustained as a result of the accident, I find none of the analysis of Hollander, Rea and Townsend to be of significant assistance in determining what a fair and reasonable assessment on this head of damage might be. In my view, the assessment cannot be arrived at on the basis of statistics and actuarial calculations. What I must do is arrive at a lump sum figure, on the basis of all of the evidence, which is fair and reasonable to both Gary and Lang. The figure must have an air of reality about it having regard to all of the evidence. The figures tendered by the above noted three witnesses do not, in my view, have that air of reality. The evidence discloses that Gary is a hard working and industrious individual who was always well thought of by his employer to the extent that his employer made very special accommodations for him upon his return to work after the accident. While there is a real and substantial risk of some loss of income in the future for this particular individual the risk is minimized by Gary’s employment history, his reputation in the work force and his personal courage in doing his work, notwithstanding his disabilities. In my view, a fair and reasonable award on this head of damage would be $50,000. I point out that this award is meant to compensate Gary for his loss of competitive edge. I find on all of the evidence that he has not suffered and will not suffer any loss of income in his trapping or taxidermy business because of injuries suffered in the accident. [Emphasis added]
In a case last year, Cerilli v. City of Ottawa, Justice Colin McKinnon awarded damages for loss of competitive advantage in the amount of $80,000.
The highest previous award that we’ve seen for this head of damages in Ontario was in 2002’s Hutchison v. Dalton: there, Justice Cavarzan awarded $162,801, calculated as follows: 24 years work life expectancy; Present value of $1.00 = $18.089; $15,000.00 x 18.089 (reduced by 40% for contingencies).
So long as awards for loss of competitive advantage were in a “conventional range” of, say, $25,000 to $75,000, insurers could form a reasonable assessment of what might be awarded at trial. But Justice Manton’s assessment might signal a new era. If this head of damages can now attract such high assessments, perhaps it is time for the Court of Appeal to establish some guidelines as to how these claims should be quantified.