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Mental Breakdown

Recent case law has altered the claims landscape for psychological injuries

An individual who sustains physical injury as a result of the negligence or other breach of duty of another is entitled to be compensated for all of the consequences that reasonably flow from that injury, including psychological damage. For example, a plaintiff who sustains serious physical injury might also, as a result of that injury, experience symptoms of depression, anxiety, post traumatic stress disorder and other emotional sequelae. These psychological consequences are to be considered in assessing damages.

However, what if the plaintiff has sustained only psychological harm? In the absence of a physical injury, is a plaintiff entitled to be compensated for psychological or emotional upset caused by the negligence or breach of duty of another person? If such compensation is available, under what circumstances would be it awarded?

In certain circumstances, damages for psychological or psychiatric harm might be awarded even in the absence of a physical injury. But, not all psychological injuries are worthy of compensation. Those worthy of compensation must be at minimum: serious, prolonged, and more than the ordinary distress or upsets that one may encounter in everyday life. The question is:  which psychological injuries are compensable, and which are not? Recent case law indicates the threshold that the plaintiff must meet when claiming damages for the negligent infliction of psychological harm is somewhat of a moving target. Brokers concerned about their clients’ potential liabilities in industries ranging from healthcare to manufacturing should take note.

Illness Test

Some decisions have required that a “recognizable psychiatric illness” be proven in order to allow for the recovery of damages for purely psychological injuries.  For example, in Odhavji Estate v. Woodhouse, the Supreme Court of Canada observed that it is well established that compensation for psychiatric damages are available where the plaintiff suffers from a “visible and provable illness” or “recognizable physical or psychopathological harm.”

However, this approach has not been without question or criticism. The courts have awarded damages for psychological claims without a finding of a recognizable psychiatric illness. In McDermott v. Ramadanovic Estate, Justice Southin explicitly rejected the limitation of recovery to cases of recognizable psychiatric illness. The judge said that there was no “logical difference between a scar on the flesh and a scar on the mind.” The plaintiff, a 13-year-old girl who saw her parents die in a car accident, was allowed to recover damages for that “emotional scar,” despite the fact that she had not suffered a recognizable psychiatric illness. In Mason v. Westside Cemeteries Ltd., the plaintiff received a modest damage award of $1,000 for “lost peace of mind” suffered when the defendant lost the cremated remains of his parents. In awarding damages for mental distress which fell short of a psychiatric condition, Justice Molloy found it logical to treat a trivial emotional injury similarly to a trivial physical injury, by awarding trivial damages, rather than by denying the claim altogether.

In 1999, the Ontario Court of Appeal heard the appeal in Vanek v. Great Atlantic & Pacific Co. of Canada.  The trial judge awarded psychological damages to the parents of a child who became anxious after their child consumed contaminated grape juice while at school. The child fell ill afterwards, but was not seriously hurt, and returned to school the next day. The parents became obsessed with the incident in what was described as a “highly unusual” way. In Vanek, the Court of Appeal declined to consider the recognizable psychiatric illness test, having already found that the defendant could not possibly have foreseen the highly unusual reaction of the parents. There was some discussion respecting the possibility of an award for psychological damage short of a recognizable psychiatric illness. There was no specific finding as to whether this more lenient approach should be adopted.

Lowering the Threshold?

In 2008’s Mustapha v. Culligan the Supreme Court of Canada took up the discussion respecting the need to prove a recognizable psychiatric illness. In Mustapha, the plaintiff became ill and developed major depressive disorder, anxiety, and phobia about showering after seeing a dead fly in an unopened bottle of drinking water. He did not consume this water and did not sustain any physical injury. Nonetheless, the plaintiff claimed to have suffered psychological damages to such an extent that he required medical attention and was unable to work. He was awarded substantial damages at trial, but ultimately was denied his award by the Supreme Court of Canada. Despite the resulting psychiatric illness, the Court ultimately found that the plaintiff failed to establish that it was foreseeable that a person of ordinary fortitude would suffer serious injury.

The Court questioned the need to prove a recognizable psychiatric illness. Madam Justice McLachlin expressly declined to define the threshold at which psychological injury would be compensable, except to say:

…. psychological disturbance that rises to the level of personal injury must be distinguished from psychological upset. Personal injury at law connotes serious trauma or illness. The law does not recognize upset, disgust, anxiety, agitation or other mental states that fall short of injury. I would not purport to define compensable injury exhaustively, except to say that it must be serious and prolonged and rise above the ordinary annoyances, anxieties and fears that people living in society routinely, if sometimes reluctantly, accept. Quite simply, minor and transient upsets do not constitute personal injury, and hence do not amount to damage.

The discourse is continued in the recent 2011 Ontario Court of Appeal case of Healey v. Lakeridge Health Corporation, which involved a proposed class action. The members of the class received a notice from the defendant hospital advising them to be tested for tuberculosis as they were potentially exposed to patients with active tuberculosis. None of the members of the class had actually contracted any disease. However, all of them suffered varying degrees of emotional upset in the time between the receipt of the health department’s notice and the receipt of the test confirming they were free of TB. Some claimants continued to suffer emotional upset, even after they knew they had not contracted any disease. However, none of the claimants could establish that they had sustained any recognized psychiatric illness. The Court of Appeal noted that the various plaintiffs had suffered to varying degrees from: depression, fear, shock, anxiety, anger, frustration, shame, outrage, distress and sleeplessness. However, all of these conditions were held to be not compensable. According to the Court, the complaints fell below what the Court would regard as a minimum acceptable threshold for compensable claims for purely psychological injury.

In Healey, the Court of Appeal expressed doubt as to the validity of the recognized psychiatric illness test, but did not expressly reject it. It also concluded that Mustapha could not be read as having changed the recognized psychiatric illness standard to some other more flexible standard. It supported an objective threshold to screen such psychological claims and to refuse compensation unless the injury is serious and prolonged. Importantly, the Court did not foreclose the possibility of a change in the formulation of the test at a future date.

Conclusion

It is questionable as to whether a plaintiff need prove a recognized psychiatric illness in order to be compensated. Certainly, if a psychiatrist opines that the plaintiff suffers from a condition listed in the DSM-IV, that plaintiff will be entitled to compensation. Such a psychiatric diagnosis is no doubt sufficient, but probably not a necessary criterion. Certain psychological injuries that fall short of such a diagnosis might be found to be compensable. The possibility is left open in Healey for a more flexible test to be developed and applied. In considering whether the plaintiffs in Healey met the required threshold entitling them to compensation for psychological harm, the Court of Appeal circled back to the reasoning in Mustapha. The plaintiffs were required to demonstrate that they had suffered harm of “sufficient gravity and duration to qualify for compensation.” The Court specifically declined to define the minimum acceptable threshold for compensable claims for psychological injury.

An objective threshold against which to screen claims for psychological harm is necessary, but unfortunately, not yet available. Until a case presents itself as a proper factual foundation for a reconsideration of the traditional recognizable psychiatric illness test, particular cases will continue to be resolved according to their particular facts.

However, the range of damages assessment for psychological injuries is potentially as broad as the range for physical claims. The trial judge in Mason awarded only $1,000 for a very minor psychological injury, but the general damages assessment in Mustapha was $80,000. The “emotional scar” in McDermott was assessed at $20,000, while the emotional distress award of the father in Vanek was valued by the trial judge at $12,500. Thus, serious psychological injuries have the potential to attract significant awards.

S. Wayne Morris is a senior partner at insurance law firm Dutton Brock LLP. He was assisted in the preparation of this article by Teri Liu, an associate of the firm.

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Copyright 2012 Rogers Publishing Ltd. This article first appeared in the May 2012 edition of Canadian Insurance Top Broker magazine.

Transcontinental Media G.P.