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Supreme Court Poised to Re-Consider Law on Damages for Psychological Injury

17-May-16

By Michael Barbero

The Supreme Court of Canada has granted leave in the decision of Saadati v. Moorhead, which addresses the law surrounding compensable damages for psychiatric or psychological illness. The Supreme Court’s granting of leave may signal a desire to clarify the law on whether or not such damages are compensable in the absence of a medically recognized and diagnosed illness or condition.

Facts
On July 5, 2005, Mr. Saadati was driving a tractor-trailer, without the trailer, when his vehicle was impacted by a large SUV (the “Accident”). Mr. Saadati was assessed at the scene by paramedics but not transported to hospital. The Accident was one of five Mr. Saadati was involved in between January 2003 and March 2009. Mr. Saadati commenced a lawsuit as a result of the Accident alleging physical and brain injuries.

The trial judge awarded Mr. Saadati $100,000 in damages. The trial judge found that Mr. Saadati had not experienced either physical injury or brain injury as a result of the Accident. Rather, the trial judge found Mr. Saadati experienced psychological injury for which he should be compensated. This finding was based solely on the evidence of Mr. Saadati’s various family members who testified he was a changed man after the Accident.

Appeal
The British Columbia Court of Appeal dismissed the action siding with the Appellant. The Appellant argued the law was clear - in order for damages for psychiatric or psychological illness to be compensable a plaintiff must first prove he or she suffers from a medically recognized psychiatric or psychological illness or condition. The Court of Appeal went on to reject Mr. Saadati’s counterargument that the law was changed as a result of the Supreme Court’s ruling in Mustafa v. Culligan of Canada Ltd. ("Mustafa"). Mr. Saadati argued Mustafa had lowered the threshold for establishing psychiatric damages by not requiring a plaintiff to show his or her condition was medically recognized.

The Court of Appeal also commented on the issue of procedural fairness stating that the trial judge should not have decided the case on the basis of matters not pled nor argued.

Conclusion
The Supreme Court’s granting of leave suggests a desire to clarify the law surrounding compensable damages for psychiatric or psychological illness and the evidentiary requirements associated with such allegations.

We will continue to monitor this appeal and report back on the Supreme Court’s decision once released.

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