Canada’s liability damage awards unlikely to reach U.S. levels

Canada’s insurance industry is not in danger of seeing the same kinds of wild personal injury and product liability lawsuits launched in the United States, based on the differences between the two countries’ legal systems and culture, a panelist told Swiss Re’s 2007 Casualty Seminar in Toronto.

“It’s my firm belief that I don’t think we will ever see some of the excesses that [a fellow panelist and Swiss Re legal counsel] described,” said Kathy Ricketts, vice president of casualty underwriting for Swiss Reinsurance Company Canada.

Ricketts added that Canadian court awards, while they are getting higher, would never approach those in the U.S. for the following reasons:

* Canadians, unlike U.S. citizens, have universal health care and are thus less likely to be ruined by medical claims (and are therefore less likely to have to sue to recover their medical costs);

* Canadian judges are appointed, not elected, and therefore Canadian courts are somewhat insulated from pressure to make decisions that will appeal to the electorate (i.e. policyholders). The outside limit for punitive damages against an insurer in Canada is thus far about Cdn$1 million. To approach this kind of award, the defendant’s conduct would have to approach the high standard of being be demonstrably “vindictive,” “reprehensible,” and “malicious.”

* There is more of an emphasis on bench trials in Canada, as opposed to jury trials in the United States.