Catastrophic Awards are Booming

This is a reproduction of an article published by Rikin Morzaria and John McLeish in the Lawyers Weekly.  For a link to the original, click here.

A number of cases decided in the past five years illustrate Ontario courts’ willingness to give multimillion-dollar damages awards to seriously injured plaintiffs. In each case, the plaintiff suffered a catastrophic injury. While these injuries are not a new phenomenon, the amounts of the awards are unprecedented and appear to be increasing.

In the 2007 case of Marcoccia v. Gill, Robert Marcoccia suffered a severe traumatic brain injury in a motor vehicle accident. At the time of the collision, he was 20 years old and had just finished grade 12. The injuries to the frontal and temporal lobes of his brain left him with severe behavioural disabilities, as well as left-sided hemiparesis. Because Marcoccia was unable to effectively manage his emotions and impulses, he was unable to live independently. The jury accepted that he required care 24 hours a day, seven days a week, and would never be able to work. It assessed his damages at $16.9 million.

In the 2008 case of Gordon v. Greig and Morrison v. Greig, Derek Gordon and Ryan Morrison were passengers in a pickup truck that swerved to avoid an oncoming car, and then rolled over. Gordon suffered a catastrophic brain injury that left him without bladder and bowel control, senses of smell, taste and hunger, and loss of temperature control and sexual function. Morrison suffered a spinal cord injury that left him with paraplegia. Justice Bruce Glass awarded Gordon damages of $11.5 million and Morrison damages of $12.3 million.

Most recently, in MacNeil v. Bryan, Justice Peter Howden awarded $18.4 million in what is believed to be the largest personal injury award in Canadian history. Katherine-Paige MacNeil suffered a catastrophic brain injury, including the loss of some frontal lobe brain mass and severe hemorrhaging in her brain. She also suffered several lumbar spine fractures and other orthopedic injuries. Justice Howden accepted that the injuries left MacNeil, who was 15 years old at the time of her injury, unemployable and dependant on around-the-clock supervision.

None of these cases articulated new legal principles for the quantification of damages. So what accounts for the increased value of the damages awards? A review of the decisions reveals that there are at least two factors at play.

The first reason for the increase is the escalating value of future cost of care awards. Over the years, both medical professionals and counsel have become more sophisticated in their understanding of serious brain and spinal cord injuries, and in the development of life care plans to address the resulting impairments. The single largest component of most life care plans is the cost of attendant care that an injured person will require. Historically, most of the focus of the attendant care centred ontime, or the amount of supervision an injured person would need throughout the day. However, with greater recognition of the capacity of individuals to engage in productive activity, a great deal of energy is now devoted to establishing the level of attendant care.

For example, in MacNeil, Justice Howden accepted that MacNeil required eight hours a day of care from a rehabilitation support worker (RSW), who could facilitate her involvement in community and volunteer activities. This was in addition to the 16 hours a day of basic supervisory care from a personal support worker. The additional cost of hiring an RSW accounted for almost $4.5 million of the more than $15 million cost of future care over MacNeil’s lifetime.

The rate of inflation for health care expenses also increases the cost of life-care plans. It is now common for plaintiffs’ counsel in significant personal injury cases to retain economists to provide opinions on the rate of inflation for health care expenses. In several cases, courts have accepted the evidence of economists that the discount rate for future health care expenses should be reduced from the rate set out in Rule 53.03 of the Rules of Civil Procedure to account for inflation.

A second reason for the increase in personal injury damages awards is the willingness of courts to recognize the cost of guardianship and management fees. Judges will award management fees where it is clear that the injured plaintiff will not have the ability to manage his or her own financial affairs and investments and will require a professional to do so.

Management fees on large damages awards can be considerable. In Gordon v. Greig, the management fee was more than $520,000; in MacNeil v. Bryan it topped $830,000.

Guardianship fees are intended to cover legal fees that the injured person will incur to amend management plans, bring motions to the court for advice and direction, and pass accounts. In Sandhu v. Wellington Place, for example, the plaintiff was awarded $400,000 to cover such legal fees.

Over the coming years, the continued increase in the cost of health care expenses at rates greater than the rate of inflation can be expected to continue to drive personal injury awards upward. To ensure that a seriously injured client is fairly compensated, it is critical that counsel develop the necessary evidentiary foundation to prove future economic losses. This includes appropriate support by specialist physicians and other health practitioners for each item recommended by the life care planner, and a solid evidentiary foundation to establish the need for management and guardianship fees, where appropriate.

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