Pecuniary and Non-Pecuniary Damages in Long-Term Disability Claims
The law in Ontario allows you to sue for compensation if you are injured as a result of someone else’s wrongdoing or negligence. The injuries could be physical, emotional, or even legal such as in case of breach of contract.
Compensation comes in form of damages. This is an amount of money intended to make the injured person whole again so that he/she can be as close as possible to the position he/she was in before the injury.
These damages generally fall under 2 broad categories namely pecuniary and non-pecuniary damages. A personal injury case may involve both of these such as if you have medical bills to pay after an accident and the accident has left you disfigured, but a breach of contract claim only has pecuniary damages. So, what is the difference between the two?
Pecuniary damages, which are also called economic/special damages, are meant to compensate an individual for actual losses that can be quantified and calculated. As an example, if you need medical care after an accident, that is a pecuniary damage. Another example is vehicle repair costs if you have been in a car accident.
Note that although there is no actual “bill” to consider with lost earnings, this is another type of pecuniary damages. If you were employed or self-employed, you will obviously not be able to earn your daily work capacity if you are injured. The actual amount of lost earnings is calculated by comparing what you were earning before injury to what you are earning after the injury.
Pecuniary losses also cater for loss of earning capacity (if you can no longer pursue your natural career path) and future care such as in case of chronic illness resulting from an injury.
Non-pecuniary damages, also known as non-economic/general damages are those damages that cannot be easily quantified since they don’t have an actual price tag. Examples of non-pecuniary damages are disfigurement and pain and suffering.
Non-pecuniary losses also cover impairment of life (if you will no longer enjoy the quality of life you did before), impairment of relationship (if your injury has had a negative effect on your marital, familial, or social relationships), and impairment of physical/mental abilities (if you lose your natural physical and intellectual abilities).
Even though these losses will not have bills or receipts, they still have to be proven in other ways. Some of the factors considered are the severity and nature of the injury, the duration of the injury, disability or loss of life, and the age of the claimant.
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If the insurance company was acting in bad faith such as wrongly denying you LTD benefits, the law allows you to sue for both pecuniary and non-pecuniary damages, even in breach of contract cases. Long-term disability lawyers in Toronto will help you prove such bad faith.
There are instances when there is nobody at fault. In such circumstances, LTD claims in Ontario focus on benefits, not damages. If you have a Canada Pension Program (CPP) policy, you can get income-replacement benefits on a regular basis, calculated as a percentage of your pre-disability income.
The Ontario Disability Support Program (ODSP) also provides employment-support and income-support benefits based on your specific needs such as paying for housing, disability-related costs like clutches, and medical supplies.
Pecuniary and non-pecuniary losses together make up the compensatory losses that your personal injury lawyer will seek on your behalf. By understanding the difference between the two you will get a grasp on how to establish your claim. It will also help you to offer your lawyer the best back up information that you can.
Non-pecuniary losses are also known as non-economic or general losses. They are more difficult to quantify than pecuniary losses. They relate not to the financial aspects of the injury, but to the additional intangible costs that result from the injury. These losses are not easy to prove, so the burden of proof is greater.
Non-pecuniary losses will include the following;
- Life impairment – this happens when the injured person no longer enjoys the same quality of life that he enjoyed prior to the accident
- Emotional distress – when the accident has affected the mental health of the claimant such that they suffer depression, anxiety or any other psychological problem, that person is said to have suffered emotional distress.
- Pain and suffering – as a result of the accident, injuries and economic losses
Impairment of mental of physical abilities – the claimant is disabled as a result of the injury and now no longer has the same mental or physical ability following the accident.
- Impairment of relationships – this is said to have occurred when the accident has damaged the claimant’s ability to relate in the same manner socially or with family, colleagues or their life partner.
- Future employability – if as the result of the accident you are unable to work in the career of your choice, this may also fall under non-pecuniary losses.
It is clear that you cannot prove any of these losses with a receipt or an invoice, so other measures must come into play when we claim for non-pecuniary damages.
The courts will use the following factors to determine the compensation for non-pecuniary losses.
- The nature, duration and severity of the injury – here, in considering compensation, the courts will use precedence to help determine the amount of compensation payable. Typically, the worse the injury the higher the compensation paid.
- The age of the claimant – the younger the person who is disabled, for example, the higher the likely court award
- Loss of life or disability
Although the courts may rely on previous similar cases when considering compensation, each case is always considered on its own merits. Cases may seem similar, but people react differently and some may suffer greater psychological harm, for example.
Unlike pecuniary losses there is no physical documentation that can prove your loss.
Personal injury compensation is often divided into pecuniary losses and non-pecuniary losses. An understanding of the terms and how they impact on your claim is important if you are to have a good understanding of how your claim has been calculated. Understanding the terms will help you assist your personal injury lawyer to claim for all your losses financial or otherwise.
Pecuniary losses are quite simply financial losses. You can measure them in dollars and cents. Pecuniary losses cover the financial loss of not just the injured but their families too. Usually you can prove pecuniary losses by producing the receipt, an account or a statement. Because it is easy to measure, this is the more common form of compensation paid for loss in a personal injury law suit.
Pecuniary losses may include
- Medical bills – this will include all the medical costs that you have incurred as a result of the accident. Such expenses may include ambulance services, medicines, hospitalisation, doctor’s fees, therapy and the like.
- Future care – if the injury is of such a severe nature that it results in disability or chronic illness, the costs of chronic care and therapy will form part of the claim. These costs extend to the care given by friends or family who give of their time and may have to stop working and earning an income.
- The cost of damages – if capital goods such as your motor vehicle have been damaged as a result of the accident, the claim will include the costs to repair or replace the goods.
- Loss of earnings – injured people often have to miss work. Earnings lost due to the injury will form part of the claim as will an estimate of future earnings shortfalls brought about by time lost due to the injury.
- Loss of earning capacity – these costs occur if your injury has precluded you from continuing to do your job or chosen career. If, for example, you are a dancer and you injure your back, you may no longer carry out your chosen career. You may have to find work where you earn less. If this is the case, loss of earning capacity will form part of your claim.
Your personal loss attorney will need proof of pecuniary loss. It is, therefore, essential that you keep all the relevant documentation. This will include receipts, accounts or statements for all the expenses related to the injury and its treatment. You may also need pay slips, tax returns and any other documented proof of payment related to the case.
Your attorney will gather all the information that he or she requires to prove your claim and ensure that every financial loss that you have incurred is duly paid back to you as part of the compensatory order made by the court.