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Mental injury claims likely to rise after SCC ruling

Insurers will face practical challenges defending mental injury claims after the Supreme Court of Canada ruled a medical diagnosis was not needed for damages, says Toronto insurance defence lawyer Heather Vaughan

In the case, the nation’s top court sided with the plaintiff, a B.C. tractor-truck driver injured in a collision with another vehicle.

Granting his appeal, the Supreme Court restored a trial judge’s decision to award him $100,000 in non-pecuniary damage, despite his failure to offer evidence of a medically recognized psychological illness, relying instead on evidence from friends and family about his changed demeanour.  

"This is a big reminder to insurers and personal injury lawyers — for both defendants and plaintiffs — of the high value placed on information provided by laypeople," Vaughan, a partner with Benson Percival Brown LLP, tells AdvocateDaily.com. “They’ll still have to prove them, but I think we’ll see plaintiffs placing much more emphasis on psychological injuries going forward.”

However, she says more reliance on non-expert witnesses creates inherent difficulties for insurers. 

“Defendants typically don’t get to interview these people. You can imagine if it’s family or friends of the plaintiff, they’re unlikely to willingly talk to the other side, so it could be very challenging for insurers,” says Vaughan, who represents insurance companies.

To combat that problem, she says her clients will have to inquire whether plaintiffs intend to pursue damages for mental injury early on in the matter. That way, they can retain their own experts to assess the strength of any claim in that realm.

“The Supreme Court didn’t say expert evidence cannot be helpful, it just said it’s not the be-all and end-all. There’s nothing to stop the defence from hiring experts even if the plaintiff doesn’t,” Vaughan says. “There are definitely practical challenges but there are also tactical steps insurers can take to defend against them.”

The B.C. case had its roots in a 2005 accident, after which the plaintiff sued the other driver for negligence, seeking damages for non-pecuniary loss and past income loss. Although the defendant admitted liability for the accident, he disputed the issue of damages.

The case was complicated further in 2010 when a litigation guardian took over the plaintiff’s file because he was declared mentally incompetent to advance it following two further accidents.

Expert evidence supporting his injury claim was ruled inadmissible at trial, and the judge concluded the plaintiff had suffered no physical injuries as a result of the crash.

However, the judge determined the man had suffered psychological injuries — on the basis of testimony from friends and family who said he was once funny and energetic but had become sullen and prone to mood swings — awarding him $100,000 in non-pecuniary damages.

That ruling was overturned when the B.C. Court of Appeal ruled that damages can only be awarded for such injuries when they are demonstrated by “expert medical opinion evidence.”

But writing for the unanimous nine-judge Supreme Court panel, Justice Russell Brown said that the court has “never required claimants to show a recognizable psychiatric illness as a precondition to recovery for mental injury.

“Nor, in my view, would it be desirable for it to do so now. Just as recovery for physical injury is not, as a matter of law, conditioned upon a claimant adducing expert diagnostic evidence in support, recovery for mental injury does not require proof of a recognizable psychiatric illness. This and other mechanisms by which some courts have historically sought to control recovery for mental injury are, in my respectful view, premised upon dubious perceptions of psychiatry and of mental illness in general, which Canadian tort law should repudiate,” he added. 

Vaughan says the decision reflects the increasing de-stigmatization of mental illness in broader society.

“They’re essentially saying that a mental injury is exactly the same as a physical one. You don’t need to rely on expert evidence or a specific diagnosis for either injury because there are protections that already exist in tort law to ward against trivial claims,” she says.

The decision canvasses the history of the Diagnostic and Statistical Manual of Mental Disorders, sometimes known as the Psychiatrists’ Bible, noting that it once listed homosexuality in its pages, and says courts should be wary of outsourcing legal questions about the availability of recovery for damages.

“The appellate court is reminding us that the law should not be based on these kinds of outside influences,” Vaughan says. “It’s an important decision.”

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