TYPES OF DAMAGES - For personal injuries - Loss of earning capacity - Non-pecuniary loss

Law360 Canada ( June 8, 2026, 9:45 AM EDT) -- Appeal by Murphy from damages award arising from motor vehicle accident, challenging the judge’s use of negative contingency deductions. Liability was admitted. The judge found that the accident caused Murphy to suffer chronic neck and upper back pain, headaches, tinnitus with hearing loss, sleep disturbance, cervicogenic headaches, and residual somatic symptom disorder, but not depression. In assessing damages, the judge fixed non‑pecuniary damages at $175,000 and then applied a 30 per cent negative contingency to account for Murphy’s subsequent injuries and health issues, including a workplace incident, groin injury, COVID‑19 infection, leukemia progression, and cardiac surgery. The judge similarly applied cascading negative contingencies of 30 per cent, 50 per cent, and 60 per cent to past loss of earning capacity for various periods, and a 70 per cent contingency to future loss of earning capacity, on the basis of real and substantial possibilities that Murphy’s unrelated health issues would have impaired his vocational capacity irrespective of the accident. Murphy argued on appeal that this was primarily a case of proven post‑accident facts rather than hypothetical contingencies, that the negative contingencies were not firmly grounded in the evidence or the proper legal framework, and that the judge effectively double counted the impact of unrelated conditions. He further argued that the judge failed to consider positive contingencies, including his sick leave bank. The respondents argued that the judge made findings of fact based on the evidence and law, appropriately applied contingency deductions to non‑pecuniary damages and past and future loss of earning capacity, and that the awards were entitled to deference despite conceding the evidence of the impact of other health conditions was thin and the use of a 1.0 full-time equivalent baseline was unusual....
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