Basic Process for Assessing Damages: 97 Select interest that deserves vindication 97 a. Restitution 97
Pecuniary Losses: Lost Future Earnings
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- Navigate this page:
- Step 1: Estimate the level of earnings
- Step 3: Factor in Contingencies
- Step 4; Account for Residual Earnings
- Step 5: Deduct for Any Overlap with Cost of Care
- Step 7: Discount to Present Value
- Theoretical Justification
- Practical Justification
- Compensating Future Losses of Children πs who did Unpaid Work
- Addressing these Issues
- Compensating Household Services
- Compensating Unwaged Work (or Underemployment)
Pecuniary Losses: Lost Future EarningsIssue: It’s easy to quantify the lost earnings up to trial: the actual amount of money that was lost as a result of not being able to work. BUT: it’s tougher to determine what future earnings would have been. Theoretical basis: (see Cooper-Stevenson) Lost actual earnings Lost earning capacity Lost working capacity
Step 2: Consider length of working lifePre-accident lifespan and estimated retirement date Important: lost future earnings are based on pre-accident lifespan the total amount π might have earned. Note: we used to estimate that people would retire around 65, unless other factors impacted it. But now that mandatory retirement has been eliminated, parties get into arguments about this more often. Complicating feature: the issue of lost years Example: A 20 year old is catastrophically injured, and prior to the accident would have worked until 65. As a result of the accident, lifespan shortened by 20 years, such that they will die at 45. Lost earnings will be calculated on the basis of pre-accident lifespan, and from that award π is supposed to pay costs of living while they live, and then they will die and [theoretically] won’t have used it all because of having fewer years. Issue: windfall to estate? Basically, the unused portion will increase the estate and mean that the heirs will get a larger inheritance than they otherwise would have. Note: living expense deduction for lost years [Tonneguzzo, 1994 SCC]
Lost YearsIn Andrews and Tonneguzzo, courts deducted 50% from the lost years Because they won’t actually live to the age they would have, deduct for the lost years for the windfall to the estate typically 50% Step 3: Factor in Contingencies:Positive and negative impacts on awards Statistical contingencies: affect everyone ∆s and πs will bring evidence about general contingencies that would have impacted π’s work years/income etc. Individualized contingencies: lost chances [see e.g. Conklin v. Smith, 1978 SCC] Can be positive or negative in Conklin, the π was working toward a higher-paying career, so the court awarded more on the change that he might have made a career change. Caution: avoid double discounts and resist over-estimates Double Discounts: see e.g. Andrews Court estimated his working life at 65, but CP pension would have kicked in at 55, so they set that as the limit. Then, they deducted 20% from the award for the chance, among other things, of early retirement. Factored in a possible unemployment period as well. Advice: don’t accept a 20% contingency deduction, because it’s probably too high – even though that happens all the time. Bring statistical evidence to bear, because actuaries have info on everything.
Earnings are only going to be reduced to zero in catastrophic cases in most cases, though, π may earn less or will be unable to work full-time. Step 5: Deduct for Any Overlap with Cost of CareYou would already have spent money on food etc., so if the cost of care calculation includes that sort of expenses (i.e. in a nursing home), deduct for this. Deduct fully over the course of the prior life expectancy Step 6: Factor in Collateral BenefitsOther sources of income replacement E.g. employer wage continuation, sick benefits, disability insurance Step 7: Discount to Present ValueSee above subtract inflation rate from interest rate and apply that percentage to discount the value. S. 56 of Law and Equity Act Note: Issue of TaxationIn calculating lost earning capacity, we generally don’t take taxation into account. i.e. courts calculate lost earnings on a pre-tax basis, even though awards are not taxed. So, in Andrews, π was awarded based on loss of $1000/month, even though he would really only have taken home $800/month after tax if he hadn’t been injured. Windfall? Theoretical JustificationIt’s a capital asset …this seems wrong. Idea: the award is a valuation of the person’s earning capacity, not their actual lost earnings. Basically, the court says you’re valuing the earning capacity as an asset. But… no we’re not. Practical JustificationBuffers errors The calculation is complicated Difference may be partly offset by tax on income from award Income from award is subject to the usual rules of taxation. So, maybe that justifies it. We just ignore it on both sides and pretend it’s a wash. It’s not really equal, but it may be close enough that it’s not worth the effort to adjust the system. Past LossSee Insurance (Vehicle) Act, s. 98: Despite any other enactment or rule of law but subject to this Part, a person who suffers a loss of income as a result of an accident or, if deceased, his or her personal representative, is entitled to recover from designated defendants, as damages for the income loss suffered after the accident and before the first day of trial of any action brought in relation to it, not more than the net income loss that the person suffered in that period as a result of the accident. Past income loss is replaced on a post-tax basis, per s. 98. Basically, we know what the take-home pay is, so we replace that. Compensating Future Losses of Children & πs who did Unpaid WorkWhere π has work history [e.g. Andrews], can use direct evidence. Use current wage as a baseline Consider educational and motivational track record Consider evidence re life plans as basis for adjustments and contingencies Children and unwaged work: lack of individualized evidence causes problems of calculation. Conventional sums vs. individualized awards: Teno,28 Fenn and Penso: $6000 awarded in each case as a rough estimate of annual earning capacity. Courts have shifted from Teno model to statistical methods assessment Issues of FairnessWhat are the key indicators of success? Can we agree on these? E.g. height; birth order; parental education attainment, socio-economic status, and ethnic origin But, is it really fair to replicate the outcomes of an unfair world? Is it worth court time to do this? Response: the tort system isn’t there to fix the world; it’s just there to replicate it The whole compensation model is based on replicating what the outcomes would have been, but for the tort. Male/female: if you compare prospects of 4 year old boy and 4 year old girl, you get a disparity of about 25%
The tort system is just perpetuating these inequalities. Gender factors in damages assessments
Gender neutral statistics
Addressing these Issues:It’s becoming common for courts to adjust upwards for female πs, for two reasons: Enhance past statistics with the contingency of future improvement The situation is improving, especially in relation to inequality of wages. Participation rate is still a significant issue, but the wage gap is narrowing. Offset deduction with lost homemaking capacity Even unwaged work can represent a loss of earning capacity So, might start w/ lower participation rates and get a lower number, but might increase the number to account for the fact that, but for the accident, a π might have worked in the home without a wage but enhancing the economic welfare of the home.
Issue: how do you measure lost homemaking capacity, then? Household services are made up of: (1) direct labour and (2) managerial functions So, can be broken up into different functions. For things that have market wage rates, compare with those – e.g. cost of childcare, gardener etc. Courts haven’t used a lot of evidence to value the managerial side of homemaking, likely because there isn’t really a labour market for that. Unless you’re super rich, maybe? Past loss Where there has been an actual expenditure: special damages based on actual cost. Where no expenditure and work left undone or done inefficiently: compensated on loss of amenity basis based on hypothetical cost [per Fobel] Where work was done by others: in trust awards. Future loss Where services will be replaced: full cost included as cost of care Where services may not be replaced: impairment compensated based on replacement cost per Fobel. Issues: 1. What counts as work? Not all expenditure of energy counts as work 2. Wage rates are low So much of household work is performed on an unwaged basis that it makes the market rates low for that work If all homemakers got wages for that work, labour costs for household work would increase substantially. One idea to address this: Can use the individuals’ evidence of what they value labour at The value of household labour is related to the opportunities lost or given up. For example, say you’re a practicing lawyer and you take two years off to raise children. The value of childcare to you is your lawyer’s salary for those two years. But… that really promotes inequality since it’s valuing the same work differently for different people.
Charitable and Religious OrganizationsTurenneFacts: Teacher, but member of religious order, vow of poverty so she didn’t take any wage for teaching. Accident, ∆ claimed no damages b/c no lost wages. Held: Compensated in the full amount someone else would have earned in that circumstance She was working as a teacher, compensate her accordingly. Voluntary choice to deploy earning capacity in a way that she didn’t earn anything. Directory: outlines outlines -> Chabot College Fall 2010 Course Outline for Computer Application Systems 60 business software applications/general accounting outlines -> Adil Khan Contracts Midterm outline- waldron outlines -> Remedies for breach of promise (1) The Interests Protected outlines -> Chapter Five: Written Documents 1 Unsigned Documents 1 outlines -> Cases and Materials on Contracts outlines -> College of Science and Health outlines -> Evidence outline outlines -> 2. Act, Omission, Status or Circumstances 4 Consequences and Causation 8 Introduction to Mens Rea and Intent 10 Levels of Fault 11 outlines -> Course Outline as/huma 2650 0A Download 1.08 Mb. Share with your friends:
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