Assessing Tort Damages in The Conflict of Laws: Loci, Fori, Illogical

ASSESSING TORT DAMAGES IN THE CONFLICT
OF LAWS: LOCI, FORI, ILLOGICAL

Christina Porretta*
The task of determining which law to apply when quantifying a

damages award in tort cases involving more than one jurisdiction is not
an easy one. As multinational litigation becomes more common, choice
of law principles are required to evolve in order to ensure that plaintiffs
are properly compensated, and defendants protected from excessive
damages awards. This paper considers the history of choice of law in
tort with respect to the assessment of damages and recent developments
in common law and civil law jurisdictions, and suggests a new
framework with respect to the assessment of pecuniary, non-pecuniary,
and punitive damages in Canada where a conflict of laws situation
arises.
La tâche consistant à déterminer la loi applicable lors de la

quantification des dommages-intérêts dans les actions en
responsabilité délictuelle impliquant plusieurs pays n’est pas du tout
facile. Comme les litiges internationaux sont de plus en plus courants,
les principes du choix de la législation applicable sont appelés à
évoluer pour veiller à ce que les plaignants reçoivent l'indemnité
appropriée, et que les défendeurs soient protégés contres des
condamnations trop lourdes. Le présent article examine l'historique des
règles du choix de la loi applicable en matière délictuelle en ce qui
concerne la détermination des dommages-intérêts et les récents
développements dans les pays de common law et de droit civil, et
propose d’établir un nouveau cadre régissant la détermination des
dommages-intérêts pécuniaires ou non pécuniaires et les dommages-
intérêts punitifs au Canada en cas de conflit de loi.
1. Introduction
In the conflict of laws the issue of damages has taken a backseat to

commonsense and logic. Indeed, it has been observed that the conflict of
* Associate, Dentons Canada LLP a member of Dentons, an international legal

practice providing services through its member firms. The views of the author may not
represent the view of Dentons or its clients. The author is grateful to Janet Walker of
Osgoode Hall Law School for her thoughtful comments on earlier drafts of this article,
and to the anonymous reader who reviewed this article for publication and made helpful
suggestions for improvement.
98 LA ReVUe DU BARReAU CANADIeN [Vol. 91
laws has long struggled with the topic of damages.1 Traditionally, the
question of which law should be applied to resolve conflict of laws issues
has been resolved by resort to the distinction between substantive and
procedural issues. In Canada, it is trite that issues of substance are to be
governed by the law applicable to the tort or the lex loci, with matters of
procedure to be governed by the law of the forum or the lex fori.2 Issues
relating to the quantification of damages are labeled as procedural and are
governed by the court in which the action is brought. Whatever may be the
justification for this current rule, its application has given rise to much
difficulty, which has led to the great debate as to whether the quantification
of damages constitutes an issue of substance or procedure.3 As it stands,
the current rule encourages plaintiffs to commence their action in the
forum that applies the law most favourable to them – in terms of the scale
of damages available for recovery – which results in forum shopping.4
At the end of the day, the amount of damages that a plaintiff could
potentially recover is what really matters to him or her. As one author has
stated, damages “are the bottom line – what all the fuss and fury of trial are
about.”5 Thus, the uncertainty and inconsistency involved in the current
approach to quantifying damages justifies a fuller examination of this
issue, especially in light of the increasing number of private international
cases making their way into Canadian courts. The goals of this article are
(1) to investigate the question of how Canadian damages principles are to
be given effect in torts cases involving foreign parties; and (2) to construct a
1 Russell J Weintraub, “Admiralty Choice-of-Law Rules for Damages” (1997) 28 J

Mar L & Com 237 at 237 [Weintraub, “Choice-of-Law Rules for Damages”]. See also
Richard Garnett, Substance and Procedure in Private International Law (United
Kingdom: Oxford University Press, 2012) at 326: “The issue of quantification is arguably
the most contentious and uncertain in the whole topic of damages.”
2 Tolofson v Jensen; Lucas (Litigation guardian of) v Gagnon, [1994] 3 SCR
1022, 100 BCLR (2d) 1 (WL), [Tolofson].
3 Janeen M Carruthers, “Substance and Procedure in the Conflict of Laws: A
Continuing Debate in Relation to Damages” (2004) 53 ICLQ 691at 694 [Carruthers,
“Continuing Debate in Relation to Damages”].
4 “Forum shopping” is the name given to the practice adopted by some litigants
to get their case heard in the court most likely to provide a favourable/lucrative damages
award. Some states in the US have, for example, become notorious as plaintiff-friendly
jurisdictions and so have become litigation magnets even though there is little or no
connection between the legal issues and the jurisdiction in which they are to be litigated;
see Russell J Weintraub, “When and How to Demagnitise Magnet Forums” (2001) 12
KCLJ 195 [Weintraub, “Magnet Forums”].
5 Weintraub, “Choice-of-Law Rules for Damages,” supra note 1 at 237. See also
Garnett, supra note 1 at 334, noting that civil liability has little value unless it also
embraces quantum of damages, especially in personal injury cases where damages is the
gist of the action.
2012] Assessing Tort Damages in the Conflict of Laws: Loci, Fori, … 99
principled approach to quantifying damages that focuses on consequences,

uniformity, and predictability.
Part 2 provides background to the reasons why courts apply a certain

law to an issue in a case and critiques the current rule in Canada. In doing
so, the purpose of damages generally is considered followed by a
description of the current position with respect to damages issues in
selected jurisdictions. I commence with an examination of the approaches
used by Canadian, Australian, and english courts, both past and present, in
determining the applicable law, both generally and in relation to damages.
This involves a consideration of the jurisprudence and theory that
comprise the current substance versus procedure debate,6 which will
provide the foundation from which to consider and measure the potential
of a proposed principled approach.
Part 3 attempts to formulate choice of law rules for quantifying

damages in Canada. In doing so, different heads of damages will be
considered. It is not possible to examine all of the different types of
damages whose classification as substantive or procedural raises
difficulties so this article will limit its focus to three specific areas, which
often arise in tort cases. The first area pertains to compensatory or general
damages, which deals with the issue of how to put the person who has been
injured in the same position as he or she would have been in had the tort
not occurred. The second area focuses on non-pecuniary damages, which
are intended to provide a measure of consolation for intangible losses, such
as pain and suffering and loss of enjoyment of life. The final area that will
be examined is that of punitive or exemplary damages, which act as a
deterrent and are used to punish the tortfeasor. Courts always, however,
retain an inherent power to refuse to apply a foreign law or recognize a
foreign judgment on the grounds of inconsistency with public policy.
Accordingly, the area of public policy is also examined, which can be used
as a “check” on the appropriateness of the applicable law chosen.
These issues are significant because Canada is in need of a framework

that balances respect for comity while providing necessary protection for
the domestic defendant(s) in a globally integrating world. The
jurisprudence discussed below illustrates the injustice that can be caused
by rules that are not specifically adjusted to respond to the particular
6 The majority of cases cited and considered throughout this paper are personal
injury cases, which is not purposely intended. There is very little jurisprudence with
respect to determining the appropriate law in order to assess damages in conflicts cases,
and within that small group of cases lies mostly personal injury decisions. However, there
is no reason why the same principles suggested in this paper could not apply to assessing
damages in other torts cases, such as product liability and property damage cases.
100 THe CANADIAN BAR ReVIeW [Vol. 91
fairness issues arising from international litigation. It is my position that

the increasing magnitude of cases involving aspects of conflict of laws
necessitates appropriate procedural safeguards to protect the interests of
parties involved in litigation under the jurisdiction of Canadian courts.
2. Re-characterizing the Assessment of Damages

from Procedural to Substantive Law
A) The Purpose of Damages Generally
The purpose of an award of damages is to put the injured party back in the
position that he or she would have been in had the wrong never occurred.
The Supreme Court of Canada neatly summarized this principle in Ratych
v Bloomer:
… the purpose of awarding damages in tort is to put the injured person in the same
position as he or she would have been in had the tort not been committed, in so far as
money can do so. The plaintiff is to be given damages for the full measure of his loss
as best that can be calculated. But he is not entitled to turn an injury into a windfall.
In each case, the task of the Court is to determine as nearly as possible the plaintiff’s
actual loss. With respect to non-pecuniary damages, the task is necessarily imprecise,
and resort must often be had to conventional figures. But where pecuniary damages
are at issue, it is the actual pecuniary loss sustained by the plaintiff which governs the
amount of the award.7
Damages have been distinguished among four types: those designed to

protect the “reliance interest,” the “restitution interest,” the “expectation
interest” and the “retribution interest.”8 each type protects a different
interest and promotes a different form of justice. This paper concerns itself
only with those types of damages that fall under the categories of reliance
interest and retribution interest.
Damages measured by the reliance interest are most common in tort

cases and aim to restore to the plaintiff any losses suffered as a result of the
defendant’s breach of duty. These damages are measured by an amount
that will put the plaintiff in the position she would have been in had the tort
not been committed. Reliance damages may also include compensation for
lost future opportunities. Damages under this category are divided into two
types of compensation: pecuniary and non-pecuniary loss. In theory, it is
7 [1990] 1 SCR 940 at 962-63, 73 OR (2d) 448 [Ratych].

8 See Jamie Cassels and elizabeth Adjin-Tettey, Remedies: The Law of
Damages, 2d ed (Toronto: Irwin Law Inc, 2008) at 6.
said that perfect compensation is obtainable in respect of pecuniary loss.9

Practically speaking, however, compensation can never be “complete” or
“perfect.”10 The question, therefore, that must be asked in a conflict of
laws analysis is: in what legal system will the claimant’s loss be made
whole?
Damages based on retribution have nothing to do with compensation

to the plaintiff. Rather, they are damages whose goal is to punish the
defendant or to deter certain conduct. Otherwise known as punitive
damages,11 they are based not only on the private interest of the wronged
plaintiff, but more importantly, on the public interest in deterring and
punishing unacceptable behaviour within a certain community.
Remedial selection and the measurement of damages are highly

discretionary in nature. An appreciation of the principles governing the
methods of damages quantification provides critical insights into specific
legal rules and arrangements, as well as into the nature of the common law
process generally. It has been stated that from a pragmatic point of view,
the issue of remedies is of utmost importance in civil litigation since a right
has practical value only to the extent that it is vindicated by an adequate
remedy.12 From a theoretical point of view, the law of remedies is also of
primary significance because the remedies the courts choose to make
available to vindicate a right reveal much about the nature, purpose and
scope of that right. Despite their vital importance, however, the issue of
quantification of damages in the conflict of laws has never thoroughly been
considered by a Canadian court. In light of the increasing number of
Canadian cases involving foreign litigants, issues relating to quantifying
damages should no longer be treated as an afterthought. Thus, the time is
ripe to re-assess and reform the current rule.
9 Both the Supreme Court of Canada and the House of Lords have held that in
respect of pecuniary losses the plaintiff can, in principle, recover full compensation; see
Andrews v Grand & Toy Alberta Ltd, [1978] 2 SCR 229 at 241-42, 8 AR 182 [Andrews];
and Pickett v British Rail Engineering Ltd (1978), [1980] AC 136 at 168 (HL).
10 One kind of difficulty arises from the need to estimate the probability of
uncertain future events. For example, future changes in the plaintiff’s medical condition,
the effect on the plaintiff’s expectation of life, the cost of future care, and the salary the
plaintiff would have earned if not injured, are all matters that the court must estimate; see
Andrews, ibid at 236-37.
11 Such awards are also called exemplary, vindictive, penal, aggravated, treble
and retributory and are used interchangeably in this paper.
12 Cassels and Adjin-Tettey, supra note 8 at 1.
B) Choice of Law for Assessing Tort Damages
1) Choice of Law in Canada Generally
Canada’s modern choice of law history begins with the 1994 Supreme
Court of Canada decision in Tolofson v Jensen.13 Since the decision is of
central importance in Canada, the facts bear noting. In Tolofson, a young
passenger in a car owned and driven by his father was seriously injured
when the car collided with a vehicle driven by the defendant Jensen in
Saskatchewan. The Tolofsons were residents of British Columbia where
the automobile was registered and insured. The defendant Jensen, was a
resident of Saskatchewan and his vehicle was registered and insured in that
province. The plaintiff brought an action in British Columbia against both
his father and Jensen seeking damages for his injuries. At the time of the
accident, Saskatchewan law, unlike British Columbia law, did not permit a
gratuitous passenger to recover, absent willful or wanton misconduct of the
driver of the car in which he or she was travelling. Furthermore, the action
was barred in Saskatchewan under that province’s statute of limitations but
was not barred in British Columbia. The plaintiff sought to avoid the
Saskatchewan limitation period by bringing his action in British Columbia,
a province that was free of these restrictions. Thus, it was necessary for the
court to decide which law should be applied to determine the liability of
the defendant driver.
Historically, the law of the forum would apply to tortious issues. After
reviewing the development of the Anglo-Canadian choice of law rules in
tort, however, La Forest J, speaking on behalf of the majority, observed
that the rules appear to have been applied “with insufficient reference to
the underlying reality in which they operate and to general principles that
should apply in responding to that reality.”14 He recognized that the major
issue in these types of choice of law cases is to determine what law should
apply after a court has properly taken jurisdiction. La Forest J determined
that, as a general rule, the law to be applied in torts is the law of the place
where the activity occurred (the lex loci delicti). He then went on to
consider whether there should be an exception to this general rule within
Canada and concluded that there need not be in cases that are
interprovincial in nature. One of the main goals of any conflict of laws rule
is to create certainty in the law, and any exception adds an element of
uncertainty. La Forest J did recognize, however, that there are situations,
notably where an act occurs in one place but the consequences are directly
felt elsewhere, when the question of where the tort takes place itself would
13 Supra note 2.
14 Ibid at 1046.
give rise to “thorny issues.”15 In such a case, he held that it may well be
that the consequences would be held to constitute the wrong. Thus, he
maintained a very narrow exception to the general rule for tortious activity
outside Canada:
… because a rigid rule on the international level could give rise to injustice, in certain
circumstances, I am not averse to retaining a discretion in the court to apply our own
law to deal with such circumstances.16
In that context, he considered whether there was room for an exception in

the case of inter-provincial torts where the parties were residents of the
forum in which the action is brought, not of the province where the tort
took place. Ultimately, he rejected as unsound the assumptions and
arguments in favour of this exception. First, he disagreed with the
assumption that it is within the reasonable expectations of the parties that
their home law would apply to an action between them. In his view, it was
reasonable for parties to expect to be governed by the law of the state
where they were at the time of the wrong. He also rejected the “public
policy” argument that it would be unjust and unfair to apply the law of
another state if some aspect of that law was considered contrary to the
public policy of the forum as reflected in its own law. In the result, La
Forest J applied the lex loci delicti rule in spite of the fact that by applying
Saskatchewan law, the plaintiff’s claim was barred by a limitation period
and by a bar on claims by gratuitous passengers, whereas the law of the
forum, British Columbia, would have allowed the plaintiff’s claim to
proceed.
Thus, the fifty-year-old english rule directing courts to apply the law
of the forum to issues arising from tort actions was rejected17 on the basis
that applying the law of the tort to substantive issues has the advantage of
certainty, ease of application and predictability.18 As a result, the law of the
forum would only be applied to matters pertaining to procedure, for which
15 Ibid at 1050.
16 Ibid at 1054.
17 For decades, the prevailing choice of law rule came from england and
effectively directed the courts to apply their own law (the law of the forum) to determine
the rights and obligations of parties to all torts, regardless of the connections that might
exist between the parties or the events and other legal systems. The only exception was
that no liability would exist if the tort had occurred abroad and the conduct complained
of was justifiable by the law of the place where the tort occurred.
18 Tolofson, supra note 2 at 1050-51. According to La Forest J, people expect
their activities to be governed by the law of the place where they happen to be and expect
that legal benefits and responsibilities will be defined accordingly. Thus, the majority
could find no compelling reason for applying the law of the forum to issues characterized
as “substantive.”
a narrow definition was given. La Forest J confined procedural issues to

those that exist for the convenience of the court, administering the court’s
“machinery as distinguished from its product.”19
Although the Supreme Court’s decision in Tolofson essentially

reformed choice of law rules in Canada, one thing remained constant – the
fact that a distinction still has to be made between matters of substance and
procedure in order to determine which law will apply to a certain issue.
The task of designating a particular issue as substantive or procedural has
been likened to an exercise of positioning an issue on one side, or the other,
of a fixed line.20 By contrast, it has been argued that the task of
characterizing an issue as substantive or procedural is more subtle than the
analogy suggests; the so-called “line” is not fixed, but varies according to
context, purpose, and stage of development of conflict rules.21 Indeed,
others have taken the position that there is no clear line of demarcation
between the two.22
Unfortunately, many courts have proceeded as if there were a clear line

of demarcation between the two in relation to the issue of damages. The
most blatant example is the House of Lords decision in Harding v
Wealands,23 where it was concluded that quantification of damages in a
tort action was a matter for the law of the forum, even after acknowledging
that the rule was based on parliamentary error. Similarly, the majority of
the High Court of Australia in Stevens v Head gave an expansive
interpretation to the meaning of procedure, holding that in relation to the
quantification of damages anything beyond the ascertainment of heads of
19 Ibid at 1067.
20 See Carruthers, “Continuing Debate in Relation to Damages,” supra note 3.
21 Ibid at 696, citing Walter Wheeler Cook “‘Substance’ and ‘Procedure’ in the
Conflict of Laws” (1932-1933) 42 Yale LJ 333: “[N]o intelligent conclusion can be
reached in any particular case until the fundamental purpose for which the classification
is being made is taken into consideration.” See also La Forest J’s reasons in Tolofson,
supra note 2 at 1067, where he stated that “differentiating between what is a part of the
court’s machinery and what is irrevocably linked to the product is not always easy or
straightforward.”
22 Anthony Gray, “Loss Distribution Issues in Multinational Tort Claims: Giving
Substance to Substance” (2008) 4:2 J P Int’l L 279 at 280 [Gray, “Loss Distribution
Issues”]. See also Mason CJ’s judgment in McKain v RW Miller (1991), 174 CLR 1 at 18
(HCA) [McKain], where he stated that the dividing line is “artificial and contrary to
common sense.” See also Harding v Wealands, [2004] eWCA Civ 1735 (BAILII) at para
51[Harding CA]: “In my judgment, the speeches of the members of the House of Lords
in Boys v Chaplin, [[1971] AC 356 (HL)[Boys]] show clearly that there is no bright line
between questions of procedure and questions of substance in relation to damages.”
23 [2006] UKHL 32 (available on BAILII) at para 51 [Harding HL].
damages was procedural.24 Such decisions have allowed plaintiffs to

bypass provisions in the law of the place of the tort, which may limit the
amount for which he or she could recover, by commencing the action in
another jurisdiction where no such limits apply.25 It is indeed arguable, and
is demonstrated in more detail below, that the current state of the law in
Canada promotes forum shopping.
2) The Distinction between Substance and Procedure
The distinction between substance and procedure is central to conflict of

laws methodology.26 It cannot be determined what law governs a particular
issue until that issue has been characterized as substantive or procedural.
The Ontario Court of Appeal has described issues of substantive law as
those which create rights and obligations.27 Substantive law is concerned
with the ends which the administration of justice seeks to attain and
determines the parties’ conduct and relations in respect of the matters
litigated. Procedural law, however, is the vehicle providing the means and
instruments by which those ends are attained and regulates the conduct of
courts and litigants in respect of the litigation itself. It has been described
as the mode of proceeding by which a legal right is enforced, as
distinguished from the law that gives or defines the right.28 With this
distinction in mind, I turn to the existing practices in selected jurisdictions
and the ongoing debate currently taking place.
24 (1993) 176 CLR 433 at 457-60 (HCA) [Stevens].

25 See, for example, the recent decision of the Ontario Superior Court in Barrick
Gold Corp v Goldcorp Inc, 2011 ONSC 3725, (2012), 99 BLR (4th) 1. Although a breach
of contract case, it nevertheless illustrates this point. Among the issues was which law
applied to determine the nature of the remedy (specific performance) sought by the
plaintiff. The contract at issue was governed by Chilean law. The judge held that absent
express agreement by the parties that Chilean law would apply to procedural matters, the
availability of specific performance was a procedural matter that was to be governed by
the lex fori (Ontario law), notwithstanding the merits of the proceeding was governed by
Chilean law. Under Chilean law, the remedy of specific performance was not available to
the plaintiff, whereas under Ontario law it was (as long as the plaintiff was able to meet
the appropriate test). Such a result is a ringing endorsement for forum shopping.
26 Carruthers, “Continuing Debate in Relation to Damages,” supra note 3.
27 Sutt v Sutt, [1969] 1 OR 169, 2 DLR (3d) 33 (CA).
28 Janet Walker, “Conflict of Laws” in Halsbury’s Laws of Canada vol 2R, 1st ed
(Toronto: LexisNexis, 2011) at HCF-115.
C) Current Position in Australia and England
1) Australia
Different views have been expressed by the High Court of Australia in

regard to the question of the proper law to apply to the quantification of
damages. There is, however, support for the proposition that questions
affecting the quantification of damages are a matter of substance, not
procedure. In Breavington v Godleman,29 an action was commenced in
Victoria for a motor vehicle accident that occurred in the Northern
Territory, which is also where the plaintiff resided. At issue was whether
damages should be assessed under the law of Victoria, the lex fori, or the
law of the Northern Territory, the lex loci. Although this case was intra-
provincial, Mason CJ considered conflicts cases as they arise in relation to
foreign torts committed outside of Australia. In his opinion, he preferred to
apply the lex loci when assessing damages, subject to an exception
involving the application of the law of the country with which the parties
had, at the time of the occurrence, the closest and most real connection.30
In applying this rule he held that the Victoria court should apply the law of
the Northern Territory in determining the plaintiff’s entitlement to
damages, as a substantial connection existed between the plaintiff and the
Northern Territory:
In reaching the conclusion that, as a matter of conflicts of law, the law of the Northern
Territory is to be applied, I reject the notion that the principles according to which
damages for personal injury are to be assessed is a matter of procedure. It would be
artificial to regard that question as one of adjectival or procedural law. The measure
of damages is plainly a question of substantive law.31
This issue was re-visited in a subsequent decision of the High Court in

Stevens.32 In that case, the plaintiff, who was a resident of New Zealand,
29 (1988), 169 CLR 41[Breavington].

30 Ibid at 76-77. Mason CJ stated that this approach avoids the shortcomings of
the application of the lex fori, particularly with respect to the problem of forum shopping.
However, he further stated that this rule should be subject to a flexible application in the
modern age of travel when the place of the accident may be fortuitous, as it is in the case
of an aircraft accident, and the parties may have no substantial connection with the law
of that place or with that place at all.
31 Ibid at 73. This was consistent with his view in the subsequent decision in
McKain, supra note 22. In that case, Mason CJ reiterated that his preferred view was that
the measure of damages is a question of substantive law. In his opinion, law that places
a limit on the amount of damages recoverable is not regarded simply as a matter
concerning quantification of damage, “but rather as an express limitation on substantive
liability” (at para 25).
32 Supra note 24.
was injured in a motor vehicle accident in New South Wales, but

commenced the action in Queensland. The only question before the High
Court was whether damages should be calculated in accordance with the
law of New South Wales, or of the law in Queensland. There was
legislation in New South Wales that restricted the amount that a plaintiff
could recover for non-economic loss suffered as a result of a motor vehicle
accident, but there was no such restriction applicable in Queensland. The
majority concluded that quantification of damages was a matter of
procedure for the forum, essentially overruling its earlier decision in
Breavington. In rejecting the proposition that quantification of damages
issues are matters of substance, the majority held that the quantification of
damages is a matter distinct from the kind of civil liability in respect of
which damages are to be quantified.33 Mason CJ provided dissenting
reasons, which confirmed his earlier position that the measure of damages
should be a question of substantive law, and not procedure.34 In his
opinion, where courts are presented with conflicts situations, choice of law
rules should operate to fulfill foreign rights.35
Subsequently, in John Pfeiffer Pty Ltd. v Rogerson,36 the plaintiff, a

resident of the Australian Capital Territory (ACT), was injured while
carrying out his employment duties at a location in New South Wales. He
sued his employer in the Supreme Court of the ACT, framing his action in
33 Stevens, supra note 24 at 459.

34 Ibid at 461. In discussing statutory limits, in particular, Mason CJ asserted that
“the size of a right is a part of the right.” See also Gray, “Loss Distribution Issues,” supra
note 22 at 302-303. Gray supports the Chief Justice’s dissent and opines that it is artificial
and arbitrary to draw a line between the right and the remedy. Further, he argues that
forum shopping is a major reason in favour of a more restrictive definition of what is
procedural:
[A]s is obvious, the narrower the definition, the less scope there is for an
opportunistic plaintiff to forum shop in order to find a forum most advantageous to
his case. One cannot blame parties in litigation for so doing, but the law should
surely not encourage a person injured in one jurisdiction to sue in another, and by
doing so avoid inconvenient damages limitations or time bars.
Dicey, Morris and Collins have also questioned whether the approach adopted by
the majority in Stevens is either desirable in terms of policy or entirely consistent with
the authorities. In keeping with La Forest J’s reasoning in Tolofson, the authors state that
the primary purpose of classifying a rule as substantive or procedural is to determine
which rules will make the machinery of the forum court run smoothly, as distinguished
from those determinative of the rights of the parties; see Lawrence Collins et al, Dicey,
Morris, Collins, The Conflict of Laws, 14th ed (London: Sweet & Maxwell, 2006) at 194
[Dicey].
35 Stevens, supra note 24 at 451.
36 [2000] HCA 36, 203 CLR 503 (available on AustLII) [Pfeiffer].
tort. Since relatively different laws applied in each jurisdiction,37 the need
arose to determine which law would apply to govern the plaintiff’s right to
compensation for his injuries. The High Court confined the role of the lex
fori to procedure in the narrow sense of the rules governing or regulating
the mode or conduct of court proceedings. This interpretation is also
consistent with La Forest J’s reasons in Tolofson, which was referred to by
the High Court. In Pfeiffer, this change was said to be required by
constitutional imperatives of Australian federalism:
It may be reasonable to recognise the right of a litigant to choose different courts in

the one nation by reason of their advantageous procedures, better facilities or greater
expedition. However, it is not reasonable that such a choice, made unilaterally by the
initiating party, should materially alter that party’s substantive legal entitlements to
the disadvantage of its opponents. If this could be done, the law would no longer
provide a certain and predictable norm, neutrally applied as between the parties.
Instead, it would afford a variable rule which particular parties could manipulate to
their own advantage. Such a possibility would be obstructive to the integrity of a
federal nation, the reasonable expectations of those living within it and the free
mobility of people, goods and services within its borders upon the assumption that
such movement would not give rise to a significant alteration of accrued legal
rights.38
Thus, the lex fori no longer applies to the assessment of damages in intra-
national tort cases in Australia. Instead, all questions about the kinds of
damages, or amount of damages that may be recovered are treated as
substantive issues.39 In a later decision, the High Court left open the
question of whether this rule would apply to foreign torts.40 Some suggest
37 If ACT law applied, damages would be assessed in accordance with common

law principles in the sum of $30,000. However, if New South Wales law applied, the
assessment of damages would be lower as a result of legislative restrictions in that state.
38 Pfeiffer, supra note 36 at para 129. It is arguable that this statement expresses,
not some peculiar aspect of Australian federalism, but sound general choice-of-law
principles; see Russell J Weintraub, “Choice of Law for Quantification of Damages: A
Judgment of the House of Lords Makes a Bad Rule Worse,” (2006) 42 Tex Int’l LJ 311
at 316.
39 Pfeiffer, supra note 36 at para 100.
40 See Régie Nationale des Usines Renault SA v Zhang [2002] HCA 10, 210 CLR
491 at para 76:
In Pfeiffer, reference is made to the difficulty in identifying a unifying principle
which assists in making the distinction, in this universe of discourse, between
questions of substance and those of procedure. The conclusion was reached that the
application of limitation periods should continue to be governed by the lex loci
delicti and, secondly, that all questions about the kinds of damage, or amount of
damages that may be recovered, would likewise be treated as substantive issues
governed by the lex loci delicti.
that there should be no difference in the approach to interprovincial and

international conflicts.41 No reason was provided for reserving this question
for a future occasion, however, and thus, the current position in Australia
on issues regarding the quantification of damage in international cases
remains unclear.
2) England
The traditional view in england has always been that the issue of heads of
damages available to a successful plaintiff is a matter of substance, while
the issue of quantification of damages is a matter of procedure for the law
of the forum.42 Over the last few decades, however, there have been
differences of opinion on this issue. For example, the current view
expressed in Dicey is that the practice of giving a broad scope to the
classification of a matter as procedural has fallen into disfavour because of
the tendency to frustrate the purposes of choice of law rules.43
Nonetheless, this substance-procedure distinction was preserved in the

statutory regime put in place by the Private International Law
(Miscellaneous Provisions) Act 1995 (PIL Act).44 Part III of the PIL Act
consists of sections 9-16 and deals with choice of law in tort and delict.
The rules essentially provide that the law applicable to a tort is the law of
the country in which the events constituting the tort occur.45 Although the
We would reserve for further consideration, as the occasion arises, whether that
latter proposition should be applied in cases of foreign tort.[emphasis in original]
41 See Jean-Gabriel Castel, “Back to the Future! Is the ‘New’ Rigid Choice of
Law Rule for Interprovincial Torts Constitutionally Mandated?” (1995) 33 Osgoode Hall
LJ 35 at 37-38: “In today’s world, there is no valid justification for or advantage in
treating interprovincial and international conflicts differently.” See also reasons of Sir
William Aldous in the Court of Appeal’s decision in Harding CA, supra note 22 at para
94, where he held that it would be illogical to apply a different rule for international torts
than for interprovincial torts.
42 See e.g. Boys, supra note 22 where Lord Pearson at 394 stated that forum law
must govern remedies “to some extent;” and Lord Donovan stated at 383 that the forum
court “should award its own remedies.”
43 Dicey, supra note 34 at 177. Compare this to Dicey’s view over a century ago
that english lawyers should give “the widest possible extension to the meaning of the
term procedure;” see Dicey and Morris, A Digest of the Law of England with Reference
to the Conflict of Laws, 1st ed (London: Sweet & Maxwell, 1896) at 712.
44 Private International Law (Miscellaneous Provisions) Act 1995 (UK), c 42
[PIL Act].
45 Ibid, s 11(1). This general rule may be subject to an exception where, in the
light of a comparison between the significance of the factors connecting the tort with the
country whose law is applicable under the general rule, and the significance of the factors
connecting the tort with another country, it appears substantially more appropriate for the
applicable law to be the law of that other country; see PIL Act, s 12(1).
PIL Act has since been somewhat superseded by the european Union’s
new Regulation on the law applicable to non-contractual obligations
(Rome II), which is discussed in more detail below, certain provisions of
the PIL Act are important for discussion purposes here.
Section 14 of the PIL Act was reviewed by the House of Lords in

Harding.46 That decision has allowed further consideration to be given to
the debate between substance and procedure in the conflict of laws, and its
relevance to the assessment of damages in tort. Section 14(3)(b) deals with
questions of procedure and provides that such issues are to be determined
in accordance with the law of the forum.47 The issue was whether damages
for personal injury caused by negligent driving in New South Wales should
be calculated according to the applicable law selected in accordance with
Part III of the PIL Act or whether it is a question of procedure that falls to
be determined in accordance with english law. It is noteworthy that both
parties to the action (the driver and the passenger) resided in england.
Under the law of New South Wales, a statute placed limits on
compensation for various types of damages and restricted recovery to
approximately thirty percent less than under english law. The decision in
Harding has been hotly contested and has received much criticism within
the academic sphere.
In keeping with traditional english views, the trial court held that the
lex fori determined quantification issues.48 The Court of Appeal, however,
allowed the appeal and held that issues of quantifying damages are
substantive.49 On behalf of the majority, Arden LJ agreed that there is no
“bright line” between questions of substance and procedure.50 She
concluded that the damages principle is one of uncertain meaning and
application and cautioned against examining concepts “simply through the
prism of heads and measurement of damages.”51 She considered the
meaning of the word “procedure” in section 14(3)(b) of the PIL Act and
held that in the context of damages in tort, the law of the forum should only
46 Supra note 23. In that case, both parties resided in england, but were in a single
vehicle accident in New South Wales. The plaintiff, who was the passenger in the car,
commenced an action in London. The potentially applicable laws were the law of New
South Wales, being the law of the place in which events constituting the tort occurred,
and english law, being the law of the forum and the law of the parties’ residence.
47 PIL Act, supra note 44. Section 14(3)(b) provides that “nothing in the Act
affects any rules of evidence, pleading or practice or authorizes questions of procedure in
any proceedings to be determined otherwise than in accordance with the law of the
forum.”
48 Harding v Wealands, [2004] eWHC 1957 (BAILII) (QB).
49 Harding CA, supra note 22.
50 Ibid at 51.
51 Ibid.
operate in an exceptional case to displace application of the otherwise

generally applicable proper law. In her opinion, application of the lex fori
must only supply any gap created by “impossible” or “unjust” rules of the
otherwise applicable law.52 This reasoning appears to be consistent with La
Forest J’s reasons in Tolofson, where he held that the purpose of applying
the procedural rules of the lex fori are solely for pragmatic and
administrative efficiency of the courts.
Unfortunately, this new rule did not last very long as the Court of
Appeal’s decision in Harding was overturned by a unanimous decision of
the House of Lords on the ground that quantification of damages is
procedural.53 Lord Hoffman found no ambiguity in the meaning of
“procedure” as used in section 14(3)(b) of the PIL Act and held that
procedure in english private international law had always included all
issues relating to the quantification of damages, which are governed by the
lex fori.54 His main reason was because this was the rule which Parliament
intended to preserve:
even if there appeared to be more logic in the principle enunciated in Pfeiffer’s case
(and Dicey and Morris, 13th ed (2000), p 172,55 supports Arden LJ on this point) the
question is not what the law should be but what Parliament thought it was in 1995.
As Lord Lloyd of Berwick said of a provision in the Limitation Act 1980 in Lowsley
v Forbes (trading as L E Design Services) [1999] 1 AC 329, 342:
It is Parliament’s understanding of the existing law when enacting the Limitation
Amendment Act 1980 that matters, not what the law is subsequently shown to
have been. … Once it is accepted that the purpose of ascertainment of the
antecedent defect in the law is to interpret Parliament’s intention, it must follow
52 For further consideration of Arden LJ’s reasons see Janeen M Carruthers,

“Damages in the Conflict of Laws – The Substance and Procedure Spectrum: Harding v
Wealands” (2005) 1 J P Int’l L 323 [Carruthers, “Damages in the Conflict of Laws”].
Carruthers welcomes Arden LJ’s proposed new rule calling it both sensible and
appropriate.
53 Harding HL, supra note 23 at para 92.
54 In doing so, he relied on the Report of the Law Commission and the Scottish
Law Commission on which Part III was based, which confirmed that the lex loci delicti
determined the question of the availability of particular heads of damages whereas the
quantification of damages under those heads is governed by the lex fori; see ibid at paras
32-38. He also referred to the statement made by Lord Mackay on March 27, 1995, at the
Hansard debate during the reporting stage in the House of Lords, which reiterated this
same point.
55 Dicey and Morris, supra note 43, state that the primary purpose of classifying
a rule as substantive or procedural is “to determine which rules will make the machinery
of the forum court run smoothly as distinguished from those determinative of the rights
of the parties.” From this perspective provisions or rules dealing with the measure of
damages should not be seen as procedural in nature.
that it is Parliament’s understanding of that law as evincing such a defect which

is relevant, not what the law is subsequently declared to be. If common error can
make the law, so can parliamentary error.56
essentially, the House of Lords chose to confirm the traditional rule,

despite accepting that the decision was wrong in principle and in logic,
relying on the fact that Parliament made the law, notwithstanding that it
was likely wrong.57
Subsequent to the decision in Harding, Rome II was adopted and came

into effect on January 11, 2009. At the first reading of the bill, Parliament
originally approved the insertion of the following exception to the general
lex loci rule:
In the case of personal injuries arising out of traffic accidents, … the court seised …
should, for the purposes of determining the type of claim for damages and calculating
the quantum of the claim, apply the rules of the individual victim’s place of habitual
residence unless it would be inequitable to the victim to do so.58
The european Commission rejected this provision, and instead Article

15(c) was inserted, which provides that the applicable law governs “the
existence, nature and assessment of damage or the remedy claimed.” In
addition, Recital 33 was added to the final text of the Preamble as a
compromise between Parliament and the Commission, which states:
According to the current national rules on compensation awarded to victims of road

traffic accidents, when quantifying damages for personal injury in cases in which the
accident takes place in a State other than that of the habitual residence of the victim
the court seised should take into account all the relevant actual circumstances of the
specific victim, including in particular the actual losses and costs of after-care and
medical attention.59
56 Harding HL, supra note 23 at para 51 [emphasis added].

57 Although I do not necessarily disagree with the end result – that damages were
to be assessed in accordance with english law, which is where the plaintiff resided and
suffered the loss – I do not agree with the Court’s classification of damages as procedural.
It just so happened that the law of the forum was the same place as where the plaintiff
suffered his loss and was the most substantially connected.
58 Draft european Parliament Legislative Resolution on the proposal for a
regulation of the european Parliament and of the Council on the law applicable to non-
contractual obligations (Rome II), First Reading, 26 July 2005, Article 4(2).
59 Regulation (eC) No 864/2007 of the european Parliament and of the Council
of 11 July 2007 on the law applicable to non-contractual obligations (Rome II), Recital
33 [emphasis added].
Besides the fact that a recital does not bear the same weight as a rule
contained in the Regulation, the recital does not authorize an alternative
choice of law rule, which would authorize the application of the victim’s
habitual residence.60 Rather, it has been likened to “an invitation” for the
court to take into account additional facts, such as the cost of medical care
in the victim’s residence in fixing the final amount of recoverable
compensation.”61 Moreover, Recital 33 is relevant only to motor vehicle
accident cases. What about product liability cases? Or what about personal
injury cases that are not as a result of a motor vehicle accident? Consider
what would happen in the case where a tourist visiting from ethiopia for
the 2012 Summer Olympic Games slipped and fell at a hotel in London
and claims to have suffered substantial injuries. Surely, the tourist would
choose to commence his or her action in the UK because doing so would
ensure a damages award in accordance with english standards, which
would likely over-compensate him or her. This encourages forum
shopping, and thus, we are no better off than we were before.
4) Issues Relating to the Assessment of Damages Should be

Characterized as Substantive
The purpose of a forum’s procedural rules was defined by La Forest J in

Tolofson as “for the convenience of the court” and to “aid the forum court
to ‘administer [its] machinery as distinguished from its product.’”62 Some
of the different aspects of a lawsuit that have been considered as
procedural in Canada include:
• evidentiary matters, such as admissibility, the requirements of

written evidence, the competency or compellability of witnesses,
the burden of proof;63
60 Symeon C Symeonides, “Rome II and Tort Conflicts: A Missed Opportunity”

(2008) 56 Am J Comp L 173 at 205 [Symeonides, “A Missed Opportunity”].
61 Ibid. See also Garnett, supra note 1 at 351:
Specifically, the recital does not go so far as to propose an alternative choice of law
rule which would refer questions of quantification to the law of the victim’s habitual
residence but, at most, allows a forum court to take into account the factual
circumstances confronting the victim in an attempt to ensure that such person is
adequately compensated.
62 Supra note 2 at 1067.
63 243930 Alberta Ltd v Wickham (1990), 75 OR (2d) 289 at para 41, 73 DLR
(4th) 474, (CA), leave to appeal to SCC refused, [1990] SCCA No 486 [Wickham].
Lacourciere JA, in a concurring, not a majority, judgment endorsed the following
approach at para 9: “As a matter of policy it would seem desirable to restrict the scope of
the procedural definition so as not to frustrate the fundamental purposes of conflicts of
laws. The test should be: ‘is the foreign rule too inconvenient to apply?’ If the answer is
negative the foreign rule is substantive.”
• laws governing who are the proper parties to a lawsuit;64

• laws governing how a judgment may be executed;65 and
• limitation periods included in the various rules of court, such as
those for the filing of pleadings.66
The following have also been suggested as matters of procedure to be

governed by the lex fori:
• how the matter gets to court – the pleadings, directions hearings,

discovery;
• rules of evidence;
• issues of standing;
• which court in the jurisdiction can hear the matter;
• whether the matter is heard by a judge or jury;
• whether damages are assessed on a once and for all basis or not;
• whether any damages awarded must be paid as a lump sum or can
be paid periodically;
• time periods for filing documents (other than initiating process);
• dismissal for want of prosecution;
• avenues for appeal.67
Issues affecting the quantification of damages are properly excluded, in my

opinion, from both of these lists. Remedies are not rules governing or
regulating the mode of conduct of the court’s proceedings; rather, they are
issues that affect the existence, extent and enforceability of the rights or
duties of the parties and should thus, be characterized as substantive. This
view was taken by the english Court in Phrantzes v Argenti, which held
that, for the purpose of private international law, the remedy is an
inseparable component of the right or obligation.68 It is arguable that such
an approach was also endorsed by La Forest J in Tolofson, who stated:
So far as the technical distinction between right and remedy, Canadian courts have
been chipping away at it for some time on the basis of relevant policy considerations.
I think this Court should continue the trend. It seems to be particularly appropriate to
do so in the conflict of laws field …69
Continuing to characterize damages assessments as procedural results

simply in the application of the lex fori, which generates forum shopping.
64 Ibid at 41.
65 Ibid.
66 Tolofson, supra note 2 at 1073.
67 Gray, “Loss Distribution Issues,” supra note 22 at 307.
68 [1960] 2 QB 19.
69 Tolofson, supra note 2 at 1071.
It does not address the goals of substantive tort law, which conflicts law
should seek to advance: compensation, regulation of conduct, and
foreseeability. Moreover, the results that applying the lex fori generally
produce are not consistent with the underlying purpose of the law of
damages. Accordingly, issues relating to the quantification of damages
should be characterized as substantive.
The next logical question then is which substantive law should apply?
Part 3 focuses on how best to determine questions relating to quantification
of damages in relation to (1) compensatory damages; (2) non-pecuniary
damages; and (3) punitive damages. Accordingly, issues relating to the
quantification of damages should be characterized as substantive.
3. Formulating Preferred Choice of Law Rule

for Quantifying Torts Damages in Canada
Under the law applicable to the assessment of damages, one should keep
the assessment of compensatory damages entirely separate from punitive
considerations because one jurisdiction may be more suitable to determine
compensation for the plaintiff, while another may be more appropriate to
determine the extent to which the defendant’s conduct should be deterred
and punished. It has been suggested that this approach requires an
assessment of compensatory damages, entirely free of punitive
considerations and then an enquiry into whether and to what extent
additional punishment may be required.70 In order to ensure enforcement
of the foreign judgment, the judgment granting court must be cognizant of
whether their choice of law will result in a damages award that will
actually be recoverable in the enforcing jurisdiction. Otherwise, if the
judgment is not enforceable, all will be for nothing.
This issue-specific approach is akin to “dépeçage,” which recognizes

that in a single action different countries may have different degrees of
interests with respect to different operative facts and elements of a claim
or defence.71 Dépeçage occurs when the rules of one legal system are
applied to regulate certain issues, while those of another system regulate
70 Stephen Waddams, “The Price of excessive Damage Awards” (2005) 27

Sydney L Rev 543 at 554. In Waddams’ opinion, this process is impossible if punitive and
compensatory considerations are intermixed.
71 O Furtak, “Application of Foreign Law to Determine Punitive Damages: A
Recent U.S. Court Contribution to Choice-of-Law evolution” at 275, in eckart
Gottschalk et al, Conflict of Laws in a Globalized World (New York: Cambridge
University Press, 2007).
the other issues.72 In my view, this issue-specific approach is justified on

the basis of a principled analysis that maintains consistency with the
underlying principles and goals of the law of damages.73
A) Compensatory Damages
1) Background
The fundamental principle of compensation in Canada is restitutio in

integrum: restoration of the plaintiff to her pre-accident situation, at least
so far as the losses suffered can be repaired by a monetary award.74 Most
european countries also abide by this rule, as does Australia. Although the
principle of full compensation is the unanimously accepted starting point,
it is subject to different restrictions, such as maximum limits as to the
amount of compensation in the form of statutory caps on damages, or
restrictions in recoverability. In terms of quantifying or assessing the value
of damage, it is the economic value of the damaged position that has to be
made good by the damages award. This value is regularly represented by
the market value of the position or by the costs of restoring the prior state.
Although most jurisdictions agree that the plaintiff should be adequately
compensated, different solutions exist as to actual methods of calculating
damages.75
Up until now, the focus has been wrong. The automatic reversion to
forum law with respect to assessing damages is difficult to justify for any
reason except for the need for courts to be run by their own rules. In
Tolofson, when speaking about choice of law rules to assess liability,
although La Forest J held that the law of the place of the tort would govern,
72 See Arthur Taylor von Mehren “Special Substantive Rules for Multistate
Problems: Their Role and Significance in Contemporary Choice of Law Methodology”
(1974) 88:2 Harv L Rev 347 at n 24.
73 It has been suggested that Rome II does not, because it cannot, entirely avoid
an issue-by-issue analysis, and thus the possibility of dépeçage emerges; see Symeonides,
“A Missed Opportunity” supra note 60 at 186.
74 Cassels, supra note 8 at 111. See also Ratych, supra note 6 at 23, where
McLachlin J stated that “the award is justified, not because it is appropriate to punish the
defendant or enrich the plaintiff, but because it will serve the purpose or function of
restoring the plaintiff as nearly as possible to his pre-accident state or alternatively, where
this cannot be done, providing substitutes for what he has lost.”
75 For example, different solutions exist as to the correct date of the calculation:
some courts use the date when the wrong was committed, whereas other courts use the
date when the damages are to be assessed. english law seems to prefer a more actual date
than the “damage day.” South African law favours the date of the commission of the tort,
whereas Belgian law takes the time of judgment as decisive; see Ulrich Magnus,
Unification of Tort Law: Damages (The Hague: Kluwer Law International, 2001) at 197.
he left open the possibility of an exception in circumstances where

application of the general rule would give rise to injustice. I suggest that
this notion of “injustice” should also play a factor in quantifying damages.
It is certainly arguable that if the purpose of general damages is restitutio
in integrum, anything less than what is required to fully compensate the
plaintiff could constitute an “injustice.” By contrast, overcompensation
could constitute an injustice to the defendant. Accordingly, the issue is not
whether we should apply the lex fori to the assessment of damages because
that is the way it has always been. Rather, the pivotal question in
determining a choice of law question in relation to the quantification of
general damages is: with respect to what legal system will the plaintiff be
made whole so as to not constitute an injustice?
2) Development of a New Rule
There is virtually no authority on this issue in Canada; however, an

approach other than simply applying the lex fori was taken by Borins JA
in dissent in the Ontario Court of Appeal decision in Wong v Lee.76 In that
case, the parties, all of whom were Ontario residents, were involved in a
motor vehicle accident in New York. All of the cars involved in the
accident were insured under Ontario policies. Under Ontario law, the
plaintiff could not claim for pecuniary losses; instead, his non-pecuniary
losses would have to meet the threshold as provided for under the
Insurance Act77 and recovery was subject to the statutory deductible.
Under New York law, however, the plaintiff could recover for pecuniary
loss and there was no deductible.
The majority of the Court of Appeal did not adjudicate on the law
applicable to assessing damages, although it commented that a defendant
cannot rely on a mere difference in law in the assessment of damages to
demonstrate an injustice.78 This issue was, however, considered in the
dissenting reasons of Borins JA, who held that Ontario had a greater
interest in compensating an Ontario resident. In his opinion, to insist on
application of the lex loci delicti would preclude an Ontario court from
awarding damages in accordance with the Ontario statutory no-fault
compensation regime for personal injuries sustained in a motor vehicle
accident. Accordingly, he found it appropriate that an Ontario resident
injured in a foreign state by the negligence of another Ontario resident,
76 (2002), 58 OR (3d) 398, 211 DLR (4th) 69 (CA) [Wong].

77 RSO 1990, c I-8.
78 Wong, supra note 76 at para 17. In the majority’s opinion, this articulation of
injustice appeared to be merely another way of applying the public policy of Ontario as
defined in its law, and effectively treating the fact that all of the parties were from the
forum jurisdiction as in itself creating an injustice.
each of whom was insured in Ontario by an Ontario insurer, should be

compensated under the Ontario statutory no-fault compensation regime for
personal injuries sustained in a motor vehicle accident.79
Although the plaintiff in Wong was domiciled in the forum court’s

jurisdiction, thus resulting in the application of the lex fori in any event,
what would happen if the plaintiff lived somewhere else? Consider a
situation where a foreign plaintiff sues in the jurisdiction where the tort
occurred, which, if successful, would invariably give rise to compensation
way beyond the plaintiff’s cost of living in his or her home jurisdiction. If
courts automatically apply the lex fori to assess damages, or even the law
of the jurisdiction where the tort occurred, this could result in
overcompensation or a “windfall”80 to the plaintiff, which runs contrary to
the underlying purpose of damages. The problem is that an amount a judge
or jury may find appropriate to compensate for an injury may, when
converted into a foreign plaintiff’s own currency, have an economic impact
far greater than the domestic judge or jury had in mind. Although it is
important to compensate a plaintiff, issues of fairness to the defendant
must also be considered. This was the exact issue before the Fifth Circuit
in In re Air Crash Disaster Near New Orleans.81 In that case, Pan
American World Airways Flight 759 crashed on takeoff, killing all
passengers on board on July 9, 1982. Among the victims was a Uruguayan
woman whose son, also a citizen of Uruguay, commenced an action in a
federal district court in Louisiana for wrongful death. Using the lex fori to
assess damages, the jury awarded the plaintiff $250,000, which was
subsequently affirmed by a majority panel on appeal. In dissent, Judge Gee
objected that the plaintiff had “obtained a bounteous – indeed, an all but
ludicrous – windfall under Uruguayan standards.”82 According to Judge
Gee’s research, the highest comparable Uruguayan award ever made was
in 1982, for a total of approximately $17,000.83 The majority disagreed,
noting that a plaintiff who has shown a right to sue in the United States is
79 Although Borins JA’s analysis may be problematic in that it is akin to the

interest-based regime used in the US, a regime that was effectively rejected by La Forest
J in Tolofson, it is nevertheless instructive, as it demonstrates the court’s ability to focus
on the proper compensation of the plaintiff. Perhaps, instead of focusing on the
jurisdiction with the greater interest, an alternative approach might be that of Mason CJ’s
in Breavington; in particular, focusing on the law with the closest and most real
connection to the plaintiff. The result would have been the same as Ontario law would
have still applied.
80 Ruth Downes, “The Windfall effect: Damages and the Foreign Plaintiff”
(1990) 9 Rev Litig 267.
81 821 F (2d) 1147 (5th Cir 1987) [Disaster Near New Orleans].
82 Ibid at 1179.
83 Ibid.
entitled to the full benefits of that forum.84 The Court did not explain,
however, why damage awards that over-compensate the plaintiff should be
a benefit of litigating in American courts.
Had the same set of facts been before a Canadian court, the same result
would have ensued since damages are assessed by the lex fori. I am not
saying that the monetary award would have been the same, but it is highly
likely that the award would have been higher than what the plaintiff would
have been entitled to under Uruguayan standards, which is where the
plaintiff suffered the loss.85 Instead of returning the foreign party to his
former position, the award based on Canadians’ cost of living could give
the foreign plaintiff a degree of wealth in her own country that greatly
exceeds what the judge or jury thought necessary to compensate him.
Judge Gee’s approach, on the other hand, suggests that damages awards
should be lower when a lower cost of living in the plaintiff’s home forum
will result in the plaintiff being overcompensated. By contrast, often times
the place of the tort is fortuitous,86 and its interest to compensate plaintiffs
for damages is lower than that of the plaintiffs’ domicile, resulting in under-
compensation. Thus, a further concern is the extent to which a society’s
interest in permitting the over-compensatory award should outweigh any
perceived unfairness in requiring the defendant to pay it. Judge Gee’s
position is compelling as it is based on the premise that tort damages are
compensatory. Although on its face, this view may appear to be harsh, it
accords best with underlying damages principles – that the plaintiff be
returned to his original position, no matter where the tort took place.
Taking all of these considerations into account I suggest, as a general

rule, that the law of the plaintiff’s domicile should govern the quantification
84 Ibid at 1170.
85 In Canada, recovery for wrongful death is for pecuniary or financial loss only.
Unlike the personal injury action, the damages are intended to compensate the survivors
for their personal losses, not for the losses of the deceased (whose losses are
compensated, to a limited extent, by a survival action by the estate). The focus is upon
the economic contribution that the deceased would have made to the individual family
members but for the tort.
86 For example, aviation crash locations are generally deemed to be fortuitous
when the accident could have occurred in any jurisdiction: see Furtak, supra note 71 at
267, citing Pescatore v Pan Am World Airways Inc, 97 F3d 1, “in a disaster befalling a
plane aloft, the place of the crash is often random.” See also Lord Wilberforce in Boys,
supra note 22, where he noted the character of the majority of foreign torts, which usually
involves personal injury or death sustained by travelers away from their place of
residence in which the place of the occurrence of the wrong is often fortuitous. He
concluded at 388 that “[t]o fix the liability of two or more persons according to a locality
with which they may have no more connection than a temporary, accidental and perhaps
unintended presence, may lead to an unjust result.”
of general damages. This method will likely ensure that the plaintiff is
adequately compensated, as it takes into account the economic and social
considerations involved. Applying some other law may serve to
overcompensate, or even under-compensate the plaintiff, which would
undermine the principles of damages law, causing injustice to either party.
In most cases, applying the law where the plaintiff is domiciled may result
in application of the lex fori in any event.87
In light of increased mobility, the easing of border controls, and large-

scale immigration, it has been suggested that domicile might no longer be
the most effective way of identifying an individual’s personal law, and
residence is now the preferred concept to use.88 However, this view is
taken in the context where the court is called upon to consider the situs of
a debt, the proper law of a contract, the formal validity of a will, the court’s
jurisdiction, the jurisdiction of a foreign court for the purpose of
recognition and enforcement of its judgments, and some procedural
matters such as security for costs and fiscal liability.89 Where the court is
called upon to identify the proper law to resolve a dispute (i.e. the choice
of law), a unitary answer is required – something domicile, but not
residence, provides.90 Therefore, until a court in Canada determines that
domicile is to be replaced by residence or habitual residence in all contexts,
or there is some sort of legislative reform, for choice of law purposes
domicile is still the appropriate concept to use. In order to simplify the
analysis to determine a persons proper domicile a suggestion has been to
adopt the simple rule that “[t]he domicile of an individual at a particular
time is in the legal unit with which he or she is most really or substantially
connected”91 A determination of the domicile of the plaintiff under this
87 In Breavington supra note 29, Mason CJ made an interesting observation on

the House of Lords decision in Boys, supra note 22. In Boys, the plaintiff, an english
resident, was injured in an accident while temporarily stationed in Malta. The action was
commenced in england, and damages were assessed under the lex fori. In the Chief
Justice’s opinion, english law was the proper law to quantify damages in that case; not
because it was merely the lex fori, but because the plaintiff would bear the impact of his
serious disabilities in england, including economic loss and loss of amenities of life.
Since the plaintiff was ordinarily resident in england, it was appropriate that the plaintiff
should recover, and that the defendant should pay damages assessed in accordance with
english law. Application of any other law, in Mason CJ’s opinion, would have amounted
to an injustice.
88 Stephen GA Pitel and Nicholas S Rafferty, Conflict of Laws (Toronto: Irwin
Law, 2010) at 20.
89 See Halsbury’s Laws of Canada, supra note 28 at HCF-108.
90 Pitel and Rafferty, supra note 88 at 26.
91 See e.g. Janet Walker, Castel and Walker: Canadian Conflict of Laws, loose-
leaf (consulted on 20 October 2012), 6th ed (Toronto: Butterworths, 2005) at 4-18: “The
purpose of an enquiry as to where an individual was domiciled at a particular time is to
approach is much simpler as it would not depend upon the result of an

historical or chronological investigation as is presently undertaken by the
courts.92
Alternatively, if the courts are not inclined to characterize the

assessment of damages as substantive and prefer to proceed as it always
has, under the lex fori, then courts should take into account the specific
facts and circumstances of the claimant’s domicile during the process of
assessment in the law of the forum. Given, however, that such facts would
require foreign evidence in any event, determining choice of law under the
principled approach is preferred.
B) Non-Pecuniary Damages
1) Background
Non-pecuniary damages are awarded for intangible losses, such as pain

and suffering, loss of amenities, and loss of enjoyment of life. These types
of damages are not really “compensatory” as no money can provide true
restitution. Rather, such damages should be viewed as simply providing
additional money to make life more endurable for the plaintiff.93 Canadian
courts have determined that damage awards for non-pecuniary losses
should be held within reasonable limits. Indeed, in three Supreme Court of
Canada decisions decided in 1978 (the “Trilogy”),94 each involving
catastrophically injured youths, the court set out the law regarding non-
pecuniary damages. The Court took the view that however seriously
injured the plaintiff may be, it cannot be in the public interest to
overcompensate him or her at the defendant’s expense. In Arnold v Teno,
Spence J held that exorbitant damages awards “fail to accord with the
requirement of reasonableness, a proper gauge for all damages.”95
Accordingly, the Supreme Court placed a ceiling of $100,000 on non-
pecuniary damages. It justified this ceiling by noting that with the attempt
to provide full compensation for all pecuniary losses the award for non-
identify the legal unit with which he or she was then mostly substantially connected.”
This view is also consistent with Mason CJ’s conclusion in Breavington, supra note 29,
where he held that the law of the Northern Territory applied in assessing the plaintiff’s
damages on the basis that it had the most substantial connection to the plaintiff (i.e. it was
the place where he resided at the time and where he suffered his injuries).
92 Castel and Walker, ibid. Throughout the remaining part of this paper,
“domicile” and “the place with which the individual is most substantially connected” are
used interchangeably.
93 Lindal v Lindal, [1981] 2 SCR 629.
94 Andrews, supra note 9; Arnold v Teno, [1978] 2 SCR 287 [Arnold]; Thornton
v Prince George School District No 57, [1978] 2 SCR 267.
95 Arnold, ibid at 332.
pecuniary loss could be made less central to the overall compensation goal.
This limitation imposed in the trilogy has been lifted by subsequent courts
to take account of inflation and is now in the neighborhood of $310,000.96
Most european laws recognize that non-pecuniary damage should be

compensated in the case of tortious injuries; however, each jurisdiction
uses its own method to assess such damages. In england, for example, the
english Court of Appeal has provided a figure of €200,000 in respect of
the most serious injuries.97 In France, there is no specific rule governing
the assessment of non-pecuniary losses other than that there should be
some “rationalization,” although several publications of tariffs are
available to the courts.98 In Germany, damages for pain and suffering are
awarded and are assessed by taking into account all relevant circumstances
of the case. The highest sum the courts have awarded has been in the range
of 500,000 DeM (approximately €255,000) for quadriplegy.99
In the United States, the traditional common law practice of assessing

damages for non-pecuniary loss is that the jury determines pain and
suffering damages without much by way of guidance from the court. In
recent decades, some states have adopted caps on pain and suffering
damages,100 although there are still many states in which there are no
caps.101
96 Somers v Fournier (2002), 60 OR (3d) 225 at para 48, 214 DLR (4th) 611:
“Adjusted for inflation, the amount of the cap is now almost three times the sum set by
the Trilogy.” See also Cassels, supra note 8 at 170.
97 Heil v Rankin [2000] eWCA Civ 1039, [2001] QB 272.
98 Préjudice physiologique (ou déficit physiologique ou déficit fonctionnel) is the
title that best expresses the notion of non-economic damages for health and bodily harm
in France. See for example, the “tableaux de jurisprudence des cours d’appel,”
periodically published by the Jurisclasseur, or the special publication of the Gazette du
Palais called Indemnités. The Cour de Cassation does not forbid the reference to tariffs
but regularly points out that they can be no more than a mere help to assessment. In its
opinion, the only acceptable method is to take previous awards as a starting point for
assessment and then to adjust the figures to the “personal, individual and concrete
situation of the victim.”
99 erwin Deutsch, Unerlaubte Handlungen, Schadensersatz und Schmerzensgeld,
2d ed (Germany: Heymanns, 1995). The German DeM subsequently became obsolete
and was replaced with the euro on January 1, 1999.
100 See e.g. California Civil Code, 4 Cal Civ Code § 3333.2 (West 1997) (non-
pecuniary damages in medical malpractice cases capped at $250,000); Idaho Code, IC §
6-1603 (West 2003) ($250,000 cap, adjusted to inflation, on non-pecuniary damages in
personal injury and wrongful death cases).
101 examples of states without caps are New York, Illinois, Washington,
Pennsylvania and North Carolina.
In Canada, england and Australia, statutory or common law caps on

damages have been characterized as procedural, and thus, the lex fori is
applied to determine the quantum of non-pecuniary damages. Not only
does this encourage forum shopping, but it also raises serious issues in the
event the enforcing court does not permit recovery of non-pecuniary
damages. As one author has stated:
If, however, foreign heads of damages provide all or most of the recovery available
under United States law, the slogan of a plaintiff’s lawyer might well be, “give me
French law, give me German law, give me Ugandan law, just give me an American
jury.”102
This was the very issue before the Ontario Court of Appeal in Somers v
Fournier.103 The plaintiffs were residents of Ontario and were involved in
a motor vehicle accident in New York with a driver who was a resident of
that state. The plaintiffs commenced an action in Ontario and at issue, inter
alia, was whether the cap on non-pecuniary damages recognized under
Ontario law is a matter of procedure, rather than substance. The Court of
Appeal held that the policy considerations, which support the goal of
avoiding substantial non-pecuniary awards favour characterization of the
cap as a matter of procedural law. Cronk JA held that the cap established
in the Trilogy was a device developed to avoid excessive and unpredictable
damages awards concerning non-pecuniary losses and the corresponding
burden on society which follows from such awards.104
Similar to compensatory damages, there is little case law in Canada

that provides for a choice of law analysis in respect of non-pecuniary
damages because most jurisdictions simply apply the lex fori. However, it
is noteworthy that a couple of American decisions have applied a foreign
statutory cap on recovery when awarding non-pecuniary damages.105
102 Weintraub, “Choice-of-Law Rules for Damages”, supra note 1 at 253.

103 Supra note 96.
104 Ibid at para 57.
105 In Cunningham by Cunningham v Quaker Oats Co, Fisher-Price Div 107 FRD
66 (WDNY 1985), an action was brought by the parents of an infant, an Ontario resident,
who had suffered severe brain damage when he ingested a toy contained in a box of
cereal. The manufacturer was located in New York, which is where the action was
commenced. The jury awarded the infant $500,000 for pain and suffering. However,
citing the Supreme Court in Andrews, the Judge held that Canadian law required a
reduction to the award for pain and suffering to $125,000, thus upholding the Trilogy’s
upper limit for non-pecuniary damages. Similarly, in Baird v Bell Helicopter Textron, 491
F Supp 1129 (DC Tex, 1980), a federal case from Texas cited the Andrews decision in
relying on it to place a $100,000 limit on recovery for pain and suffering. In that case, the
Therefore, in order to promote the intention of the Supreme Court of

Canada, which is to establish uniformity, I suggest, as with general damages,
it is appropriate to apply the law where the plaintiff is domiciled (that is,
most substantially connected) when assessing non-pecuniary damages.
Such an approach will achieve predictability and uniformity. Failure to use
a uniform standard to instruct the jury and assess its award can lead, and
has led, to large American-style awards far beyond that which would have
been forthcoming in the foreign country. This is exactly what the Supreme
Court in the Trilogy intended to prevent when setting the cap on non-
pecuniary will not require any evidence of foreign law.
C) Punitive Damages
1) Background
Punitive damages are sums awarded in excess of any compensatory

damages in order to punish the wrongdoer for egregious conduct and to
provide additional deterrence.106 Punitive damages are not grounded in
compensation or in corrective justice; rather, they are grounded in
retributive justice. In Canada, punitive damages are awarded in exceptional
cases for “malicious, oppressive and high-handed” misconduct that “offends
the court’s sense of decency.”107
District Court of Texas acknowledged that Canada has explicitly disapproved of the
possibility of unlimited recovery for a non-quantifiable injury, and stated as follows at
1151:
In so doing, it has exhibited a policy of protecting its domiciliary defendants from
excessive liability. It has also shown a desire to see that its injured plaintiffs are
adequately cared for and able to live as tolerably as possible under the
circumstances: Warren v. King, 3 A11 eR 521 (1963). All of the Canadian policies
flowing from the Court’s discussion in the Andrews case, supra, are relevant here.
The plaintiff is Canadian and, therefore, that jurisdiction has a present interest in
seeing its law applied. Further, because the third-party defendants are Canadian
citizens and they face the possibility of partial liability for Plaintiff’s damages, if
any, the Canadian policy of protection for its defendants is also directly involved in
this case. Both of these policies would be circumvented if Texas law was applied.
Similarly, Texas must also have an implicit interest in protecting its citizen
defendants from excessive liability. This desire would be furthered if Canadian law
is applied. Canada has affirmatively adopted this particular method of damage
calculation as the best way to deal with a difficult problem. An analysis of the
interests and policies of both of the jurisdictions involved strongly favors the use of
Canadian law.
106 See Hill v Church of Scientology, [1995] 2 SCR 1130, 24 OR (3d) 865, where
the Court explained that punitive damages are awarded to punish the defendant and to
deter the defendant and others from engaging in such conduct, and not to compensate the
plaintiff.
107 Ibid at para 196.
There is no universal consensus on the role of punitive damages in

transnational disputes. Countries differ on the purposes that punitive
damages serve, the actions in which they may be awarded, the factors
considered in determining the amount of the punitive damages award, and
on what constitutes an “excessive” award. Countries also differ on whether
they will recognize and enforce foreign awards of punitive damages. For
example, most civil law countries consider punitive damages to be a penal
sanction that may be imposed only in criminal proceedings, and thus, will
not enforce a foreign punitive damages award.108 The most recent iteration
of this view is found in Article 11(1) of the Hague Convention 30 June
2005 on Choice of Court Agreements, which states: “[R]ecognition or
enforcement of a judgment may be refused if, and to the extent that, the
judgment awards damages, including exemplary or punitive damages, that
do not compensate a party for actual loss or harm suffered.”109 By contrast,
common law countries permit the award of punitive damages in private
actions, although the circumstances under which such relief may be
awarded vary greatly.
108 For example, Switzerland, and Germany will not recognize or enforce a
foreign court judgment containing punitive damages. In one case, the German court held
that the enforcement of a US judgment would be contrary to the compensation principle
underlying damages and also contrary to the penal monopoly of the State to impose
punitive sanctions: see Judgment of the Bundesgerichtshof, IXth Civil Senate, Jun. 4,
1992, Docket No IX ZR 149/91. Italy also will not recognize or enforce foreign punitive
damages awards on the basis that they are contrary to public policy; see Soc Ruffinatti v.
Oyola-Rosado, Supreme Court 1781/2012, February 8, 2012. Poland is one of the few
civil law countries within europe that appears to allow punitive damages. However, even
there, punitive relief is strictly limited to claims involving infringement of liberty,
violation of sexual integrity and honor, or invasion of privacy; see Civil Code of the
Polish People’s Republic art. 448. However, it has been suggested that the “tide may be
about to change,” and that recent developments in some civil law countries point toward
greater receptivity toward punitive damages and the enforcement of these foreign
awards; see John Y Gotanda, “Charting Developments Concerning Punitive Damages: Is
the Tide Changing?” (2007) 45 Colum J Transnat’l L 507 at 508. Indeed, France’s highest
court, the Cour de Cassation, recently ruled that foreign judgments awarding punitive
damages are enforceable, at least in principle. The Court held that punitive damages are
not contrary to public policy, unless the amount of punitive damages is disproportionate
to the amount of the damage sustained. Unfortunately, the Court did not provide much
guidance on what constitutes a disproportionate amount, although French legislators have
proposed a revision to the French Civil Code to permit punitive damages up to twice the
amount of the compensatory damages; see Cass civ 1re, 1 December 2010, Epoux
Schlenzka v Fountaine Pajot, D 2010.
109 The Special Commission of the Hague Conference on Private International
Law, “Choice of Law Agreements” (delivered at the Convention of 30 June 2005),
Preliminary Document 14, online: Hague Conference on Private International Law
<http://www.hcch.net/index_en.php?act=publications.details&pid=3497&dtid=35>
[Hague Convention].
One major aspect of the controversy surrounding punitive damages is

related to quantum. The most widespread use of punitive damages is in the
United States, which is why it has become known as a “magnet forum”110
attractive for litigating the claims of persons killed or injured in other
places.111 In england, punitive damages are limited to only two situations:
when there is oppressive, arbitrary, or unconstitutional action by the
servants of the government; and when the defendant’s conduct results in
profit that is not fully offset by the award of compensatory damages.112
The legislature has gone so far as to enact a statute that refuses to recognize
foreign judgments for punitive and multiple damages.113 In Australia,
punitive damages may be sought in a wide variety of tort actions. They are
considered an extraordinary remedy, however, appropriate only in cases of
truly outrageous conduct.114 It is also noteworthy that some states have
placed limitations on the awarding of punitive damages. For example, New
South Wales does not allow punitive damages for motor accident injuries
110 Weintraub, “Magnet Forums,” supra note 4 at 195.

111 Critics of punitive damages warn against an “Americanization” of Canadian
law that, if adopted, would bring the administration of justice in this country into
disrepute; see Whiten v Pilot Insurance Co, 2002 SCC 18 at para 39, 1 SCR 595 [Whiten].
In Whiten, the Supreme Court of Canada cited two cases referred to by critics of punitive
awards to substantiate this fact: (1) BMW of North America, Inc v Gore, 517 US 559
(1996) (an Alabama jury awarded $4 million in punitive damages against a BMW
dealership for failure to disclose a minor paint job to fix a cosmetic blemish on a new
vehicle); (2) Liebeck v McDonald’s Restaurants, PTS, Inc, 1995 WL 360309 (Dist Ct N
Mex) (in 1994, a jury in New Mexico awarded 81-year-old Stella Liebeck $160,000 in
compensatory damages and $2.7 million in punitive damages against McDonald’s
Restaurants for burns resulting from a spilled cup of coffee, notwithstanding that she tried
to open the cup while balancing it on her lap in the passenger seat of a car).
112 Rookes v Barnard (No 1), [1964] AC 1129 HL. The decision to restrict punitive
damages in england is based purely on policy concerns, such as the risk of unfairly
penalizing the defendant without due procedural protection and confusing the functions
of civil and criminal law.
113 See Protection of Trading Interests Act 1980 (UK), 1980 c 11, which protects
UK defendants from multiple damages awards by rendering such awards unenforceable
in their entirety. Section 5(3) defines a judgment for “multiple damages” as “a judgment
for an amount arrived at by doubling, trebling, or otherwise multiplying a sum assessed
a compensation for the loss or damage sustained by the person in whose favour the
judgment was given.”
114 There are two significant limitations on the availability of punitive damages.
First, while Australia has rejected the english categorical approach to the availability of
punitive damages, Australian courts will only award punitive damages if compensatory
damages are inadequate to punish the defendant, deter the defendant from repeating such
conduct, and mark the court’s disapproval of such conduct; see Blackwell v AAA, (1997),
1 VR 182 (SC). Second, punitive damages may not be assessed against the defendant if
he or she has already been substantially punished in a criminal proceeding; see Gray v
Motor Accident Commission (1998) 196 CLR 1 (HCA).
and industrial injuries.115 In addition, Victoria bars punitive damages in

wrongful death actions.116
Punitive damages in Canada are more broadly available than in

england and Australia, but more narrowly available than in the United
States. The main factors Canadian courts use to determine quantum is the
nature of the defendant’s conduct and the extent to which the award of
compensatory damages already given is likely to deter such future
misconduct.117
Since numerous countries prohibit or severely limit punitive damages

in private actions, parties may be unsuccessful in having punitive damages
awards recognized and enforced in these countries. Thus, it is important to
consider the ultimate enforceability of the award. We are in need of a
uniform rule that will increase the likelihood of recognition and
enforcement of a foreign punitive damages award. A uniform standard will
also reduce forum shopping, enhance predictability and protect defendants
sued in Canadian courts when the claim is governed by a foreign country’s
law.
Courts in the United States have considered various approaches to choosing

the applicable punitive damages law. It is recognized that the American
analysis operates within a larger context that is quite different from the
general approach taken in england, Canada and Australia, but it is
nevertheless instructive. Some jurisdictions within the US consider the
issue of punitive damages as substantive. That has led courts to focus on
the defendant’s domicile or principal place of business, the situs of the
defendant’s conduct, or the place of injury. Because punitive damages have
a conduct-regulating function, the place of the plaintiff’s domicile ought to
115 See Motor Accidents Compensation Act 1999 (NSW), s 144: “A court cannot
award exemplary or punitive damages to a person in respect of a motor accident.”
116 See Reindel v James Hardie & Co Pty Ltd, (1994) 1 VR 619 (SC).
117 Additional factors that courts take into account include: the degree of moral
turpitude involved in the tort; whether the defendant has apologized or expressed remorse
in any way; any profit earned by the defendant from committing the wrong and the extent
to which that profit exceeds the compensatory damages; and, the means of the defendant;
see Cassels, supra note 8 at 296-97. The highest punitive damages award granted in
Canada was a jury’s verdict of $1,000,000, which was upheld by the Supreme Court of
Canada in Whiten, supra note 111, involving an insurer’s liability for refusing to honour
its policy obligations.
have little or no interest in having its law applied to punitive damages

claims.118
a) The Place of the Alleged Misconduct
With respect to punitive damages, the “place of the tort” is not

synonymous with the place of the injury, but rather, with the place where
the alleged misconduct to which an award of punitive damages could
attach.119 Often, the place of the conduct is the same as the defendant’s
domicile. In Dobelle v National Railroad Passenger Corp,120 the plaintiff
was domiciled in Pennsylvania but was injured when a train derailed in
New Jersey. The cause of the derailment was traced back to Pennsylvania,
where some of the defendant’s employees failed to inspect the train and fell
below the standard of conduct required by their employer. The plaintiff
commenced an action in the courts of the Southern District of New York
and sought punitive damages. The punitive damages laws of Pennsylvania
and New Jersey differed in regard to when a corporation is vicariously
liable for punitive damages because of the acts of its employees. The court
of the Southern District of New York selected the law of Pennsylvania, the
situs of the alleged misconduct, reasoning that the interests of the place
where the majority of the wrongful acts took place were stronger than the
plaintiff’s domicile or the place of injury. The Court found that the interest
of the jurisdiction where the plaintiff resided has little relevance since
punitive damages are designed to punish a defendant, not to compensate a
plaintiff. Similarly, where the place of injury, in this case New Jersey, is
largely fortuitous, its interest in and ability to control behavior by deterrence
or punishment, or to protect defendants from liability, is lower than that of
the place of misconduct or principal place of business. The Court found
that the determinative factor of this issue was the place where the conduct
causing the injury occurred.
A significant problem with applying the substantive law of the place

of the misconduct to quantify punitive damages is that ultimately, the
resulting judgment may not be enforceable. While the defendant may have
assets in the place where the misconduct occurred, this may not always be
the case. If the enforcing court is located in a jurisdiction that does not
118 See Symeon C Symeonides, “Resolving Punitive Damages Conflicts” (2003)

5 Yearbook of Private International Law 1. Further, because the place of the injury is
often much more fortuitous than the place of the misconduct or the principal place of
business, its interest in and ability to control behaviour by deterrence or punishment, or
to protect defendants from liability, is lower than that of the place of misconduct or the
principal place of business.
119 Furtak, supra note 71 at 277.
120 628 F Supp 1518 (NY Dist Ct 1986).
enforce judgments for awards of punitive damages, then the punitive

damages award will be worth nothing. Consider a Canadian punitive
damages judgment awarded against a German manufacturer for misconduct
that occurred in Canada. If the judgment is to be enforced in Germany,
because that’s where the defendant’s assets are located, the punitive
damages portion of the award will not be enforced on the basis that it is not
recognizable in the enforcing country. Although this may not be the case
in every action, it would likely be a common problem.
b) The Defendant’s Domicile or Principal Place of Business
The defendant’s domicile or its principal place of business has also been
found to be very important in determining the applicable law of punitive
damages. These factors are important to this issue because they satisfy the
expectations of defendants that the laws of their home jurisdiction will
apply to all conduct-regulating rules. These factors are also important
insofar as those jurisdictions have a substantial interest in regulating
misconduct within their borders.
The principal place of the defendant’s business is a key factor in choice

of law determinations relating to punitive damages issues in products
liability cases. In re Aircrash Disaster Near Roselawn, Indiana,121 an action
was commenced as a result of an aircraft crash in Indiana. The manufacturer
defendants, however, maintained their principal place of business in
France. Although the plaintiffs alleged that the defendants’ misconduct
occurred outside of France, the Court applied French law because it was
also the defendants’ principal place of business. The Court held that
France’s interest in having its own law of punitive damages applied
outweighed the interests of the state where the misconduct occurred.122
Similarly, in re Air Crash at Belle Harbor, New York,123 an aircraft

manufactured in France by a company organized under French law with its
headquarters in France, crashed in Belle Harbor, New York shortly after its
take-off in New York City. The US District Court for the Southern District
of New York divided the issue of damages into two separate analyses:
compensatory damages and punitive damages. The Court determined that
unlike compensatory damages, French law would apply to determining the
121 172 FRD 295 at 9 (Il Dist Ct 1997) [Roselawn].

122 Ibid at 17. This case also illustrates how domestic courts may apply foreign law
that does not permit the recovery of punitive damages against foreign defendants, even
where the place of injury and the domiciles of many plaintiffs were elsewhere (in this
case many of the victims were from the United States).
123 2006 AMC 1340, WL 1288298 (NY Dist Ct 2006) [Belle Harbor].
issue of punitive damages for all passengers on board because that was
where the defendant’s principal place of business was located.124
On balance, the application of the law of the defendant’s domicile or

principal place of business is a reasonable resolution to these conflicts. In
assessing the amount of punitive damages it should award, if any
depending on the enforcing country,125 the court should consider
precedents under the foreign substantive law in order to assess the
reasonableness of the award. A comparative standard has been suggested
using representative ranges of foreign jury awards to help guide judges in
their assessment, to help fill the void created between the laws and values
of the foreign country and domestic judges and juries’ corresponding lack
of familiarity with them.126 This standard seems reasonable. In addition,
applying the law of the defendant’s domicile or principal place of business
will increase the likelihood of enforceability of the punitive damages
award because the place where the defendant has assets will almost always
be the same as the location of the defendant’s domicile or principal place
of business. This should provide plaintiffs with some comfort when
seeking punitive damages against a foreign defendant.
D) Public Policy as a Check on the Quantification Analysis
Courts always retain the power to refuse to apply a foreign law or

recognize a foreign judgment on the grounds of inconsistency with public
policy. The existence of such discretion is recognized in common law
124 There were also claims commenced by some who were not on board the
airplane, but died as a result of the aircraft’s impact on the ground in Belle Harbor. The
Court concluded that in determining what substantive law to apply to the issue of punitive
damages for the accident, French law would apply to the passenger claims, but New York
substantive law would apply to the ground victims; see ibid at 30.
125 even though a plaintiff might find it harsh that it cannot recover punitive
damages against a defendant, where the enforcing country does not recognize such an
award, we must keep in mind what the rationale behind punitive damages is – not to
compensate the plaintiff, but to punish the wrongdoer. In essence, the plaintiff must take
the defendant as they find him.
126 Janet Hallahan, “Damage Control: Should a Foreign Nation’s Jury Awards
Limit American Juries?” (1994) 67 Temp L Rev 729 at 767. See also Weintraub, “Choice-
of-Law Rules for Damages,” supra note 1. In Weintraub’s opinion, if the jury verdict
clearly exceeds what would be within acceptable limits in the foreign country, the judge
should either order a new trial if the plaintiff does not agree to a remittitur to an amount
at the high end of the foreign range, or perhaps simply reduce the award to this level on
the ground that, as a matter of law, this is the maximum recoverable.
rules,127 embodied in statutory codifications of private international

law,128 and is a standard feature of international conventions on private
international law.129 It has been said that public policy can be used as a
“safety-net” to choice of law rules.130 It is a doctrine which crucially
defines the outer limits of the “tolerance of difference” implicit in those
rules. Accepting that the use of public policy must be restricted, guidelines
have been suggested to explain and construe the way in which public
policy ought to be applied by the courts. The most pertinent principle, in
my opinion, is for courts to have the discretion to use public policy as a
choice of law rule. For example, where a damages award would give rise
to inadequate compensation to the plaintiff (that is, either excessive or
absurdly low) then the courts should apply a public policy check to ensure
the plaintiff is being properly compensated.131 Thus, where a foreign law
is chosen, the effect of public policy would be to apply a local norm in
priority over that foreign law. This is in keeping with La Forest J’s position
in Tolofson that an exception should be made where the application of the
general rule would give rise to injustice.
In Canada, use of this so-called policy check can be found in the

British Columbia Superior Court decision, Wong v Wei.132 A motor vehicle
accident occurred in California involving parties who were both British
Columbia residents. The plaintiffs brought an application for a
determination of the applicable law to the quantification of damages. Not
surprisingly, the plaintiffs argued that the damages should be adjudicated
in accordance with California law, which did not provide for an upper limit
in respect of non-pecuniary damages. By contrast, the defendants argued
that British Columbia law, which of course, is bound by the Trilogy’s cap,
should apply. The Court ultimately applied British Columbia law, the lex
fori, to the quantification of damages. Interestingly, the substance versus
procedure debate did not play a role in the court’s determination; rather, the
discussion turned on the issue of public policy. The Court was asked to
consider the policy concerns that were apparent if California law were to
be used to assess damages and whether the non-existence of a rough upper-
127 For example, the law which would ordinarily be applicable under choice of law
rules may be denied application where the applicable law “could give rise to injustice;”
see Tolofson, supra note 2 at 49.
128 See e.g. PIL Act, supra note 44, s 14(3)(a).
129 See e.g. Article 33 of the Hague Convention, supra note 109.
130 Alex Mills, “The Dimensions of Public Policy in Private International Law”
(2008) 4 J P Int’l L 201 at 211.
131 Garnett, supra note 1 at 339, who suggests that while the Canadian “injustice”
test is potentially vague, it does at least satisfy the protection of claimants as a legitimate
policy in awarding damages; see also Mills, ibid at 218; Carruthers, supra note 3 at 702;
and Weintraub, “Bad Rule Worse,” supra note 38 at 320.
132 [1999] 65 BCLR (3d) 222, BCJ No 768, (Sup Ct).
limit in respect of non-pecuniary damages would be unjust according to

Canadian law. Kirkpatrick J considered the specter of exorbitant awards
for non-pecuniary losses in the United States and held that the policy
concerns expressed by the imposition of the Trilogy cap was an overriding
consideration and was cause not to quantify the plaintiff’s damages in
accordance with California law. In his view, it would be unjust to apply any
law of damages other than that of British Columbia to an action involving
only British Columbia residents.133
In an attempt to streamline the application of public policy in respect

of choosing the applicable law, the trial judge should receive evidence on
the range of awards in the foreign country.134 The trial court should
compare the size of the damages award against the average amounts of
similar awards of the foreign country and then reduce (or increase) the
award if it appears excessive (or low) in light of those awards.135 This
method, in my opinion, is compelling and would result in uniform and
predictable results.
E) Final Considerations
I do appreciate that because I have recognized different governing laws, in

addition to the substantive law that will be applied to liability issues, this
may prove to be too burdensome in certain cases in terms of the
adjudication and gathering of evidence. Such an approach requires
evidence as to the substantive law on each issue, which can be extremely
costly. However, application of this principled approach will ensure that
the plaintiff is adequately compensated, which is the goal of damages law
in Canada. Simply applying the lex fori because that’s where the matter is
being heard, is not the answer; neither is applying the lex loci, which may
have absolutely nothing to do with where the plaintiff is substantially
connected. Indeed, such an increase in the cost of litigation may serve as
an incentive to eliminate trivial damages claims that a plaintiff might
otherwise seek, or facilitate early settlement. Nevertheless, the place where
the plaintiff is domiciled will often be the law of the forum, not requiring
proof of foreign law in any event.136 It is only when the plaintiff chooses
to sue in a different jurisdiction (which can sometimes be a result of forum
133 Ibid at para 18. This has also been addressed in Rome II, supra note 58, Art 26,
which provides that the application of a provision of the law of any country may be
refused if it is “manifestly incompatible” with the public policy of the forum.
134 See Weintraub, “Choice-of-Law Rules for Damages,” supra note 1 at 253.
135 See Hallahan, supra note 126 at 762.
136 The law of the forum will also be applied when assessing punitive damages
where the defendant resides in the same jurisdiction as the plaintiff (but the accident
occurred outside of Canada).
shopping) will the court be required to apply foreign law in assessing

general and non-pecuniary damages. Thus, it is the plaintiff who must
decide whether the possibility of obtaining a higher damages award
outweighs the substantially higher costs it will incur when opting to sue in
a court other than where he or she is the most substantially connected.
Further, where it appears that the plaintiff has chosen to sue in a foreign
court as a result of forum shopping,137 it always remains open to the court
to issue a costs award in favour of the defendant if it is ultimately
determined that the law of the plaintiff’s domicile applies to quantify
general and non-pecuniary damages. Indeed, without consistent use of a
uniform standard, foreign plaintiffs will continue to search out attractive
forums in hope of large damages awards.138
3. Conclusion
The task of determining which law to apply when quantifying a damages

award in a tort case comprising elements from more than one jurisdiction
is not an easy one. Many different approaches have been tried and
discarded by the courts. Some approaches provide for a general rule, but
include an exception. Others provide for a completely inflexible test.
While not ignored, these issues have not received the attention that they
deserve.
History has certainly shown us that forum courts have often been very
tempted to find a way to apply the lex fori. Although the Supreme Court of
Canada took some steps to reform the difficult area of choice of law rules
in tort with respect to liability issues in Tolofson, it now needs to take
further steps to address issues surrounding the quantification of damages.
In my analysis, a reasonable framework toward assessing damages in a
case involving more than one law requires a careful categorization of those
issues and a conflicts approach that will yield reasonable and fair results.
Accordingly, I conclude that in most cases, the following rules should be
applied by the courts in determining the applicable damages award, subject
to relevant public policy considerations:
(a) Compensatory/General Damages: the law of the plaintiff’s

domicile (i.e. where the plaintiff is most substantially connected);
(b) Non-Pecuniary Damages: same as (a); and
137 One example would be if the only tie the plaintiff has with the foreign court is
that the tort or misconduct occurred there, even though the plaintiff is substantially
connected to another jurisdiction.
138 See Hallahan, supra note 126 at 6: “Foreign plaintiffs seek United States
jurisdiction because of jury trials and higher damage awards.”
(c) Punitive Damages: the law of the defendant’s domicile (i.e. where
the defendant is most substantially connected) or principal place
of business.
This functional framework precludes the procedural label for any rule that
is likely to affect the result in a manner that would invite forum shopping,
unless injustice would result. Such an application is imperative in order to
prevent courts from overcompensating plaintiffs and obtaining large awards
of damages, which may push some defendants into bankruptcy. Issues of
order and fairness, which lie at the heart of private international law, must
not go unchecked, while still promoting the underlying purpose of damages.
It is hoped that the framework articulated in this paper might help provide
guidance for future cases, making the assessment of a foreign damages
award more certain, predictable, and justifiable, as well as consistent with
well-established Canadian damages principles.

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Assessing Tort Damages in The Conflict of Laws: Loci, Fori, Illogical

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ASSESSING TORT DAMAGES IN THE CONFLICT

OF LAWS: LOCI, FORI, ILLOGICAL

The task of determining which law to apply when quantifying a

La tâche consistant à déterminer la loi applicable lors de la

In the conflict of laws the issue of damages has taken a backseat to

* Associate, Dentons Canada LLP a member of Dentons, an international legal

1 Russell J Weintraub, “Admiralty Choice-of-Law Rules for Damages” (1997) 28 J

principled approach to quantifying damages that focuses on consequences,

Part 2 provides background to the reasons why courts apply a certain

Part 3 attempts to formulate choice of law rules for quantifying

These issues are significant because Canada is in need of a framework

fairness issues arising from international litigation. It is my position that

2. Re-characterizing the Assessment of Damages

A) The Purpose of Damages Generally

Damages have been distinguished among four types: those designed to

Damages measured by the reliance interest are most common in tort

7 [1990] 1 SCR 940 at 962-63, 73 OR (2d) 448 [Ratych].

said that perfect compensation is obtainable in respect of pecuniary loss.9

Damages based on retribution have nothing to do with compensation

Remedial selection and the measurement of damages are highly

B) Choice of Law for Assessing Tort Damages

1) Choice of Law in Canada Generally

In that context, he considered whether there was room for an exception in

a narrow definition was given. La Forest J confined procedural issues to

Although the Supreme Court’s decision in Tolofson essentially

Unfortunately, many courts have proceeded as if there were a clear line

damages was procedural.24 Such decisions have allowed plaintiffs to

2) The Distinction between Substance and Procedure

The distinction between substance and procedure is central to conflict of

24 (1993) 176 CLR 433 at 457-60 (HCA) [Stevens].

C) Current Position in Australia and England

Different views have been expressed by the High Court of Australia in

This issue was re-visited in a subsequent decision of the High Court in

29 (1988), 169 CLR 41[Breavington].

was injured in a motor vehicle accident in New South Wales, but

Subsequently, in John Pfeiffer Pty Ltd. v Rogerson,36 the plaintiff, a

33 Stevens, supra note 24 at 459.

It may be reasonable to recognise the right of a litigant to choose different courts in

37 If ACT law applied, damages would be assessed in accordance with common

that there should be no difference in the approach to interprovincial and

Nonetheless, this substance-procedure distinction was preserved in the

Section 14 of the PIL Act was reviewed by the House of Lords in

operate in an exceptional case to displace application of the otherwise

52 For further consideration of Arden LJ’s reasons see Janeen M Carruthers,

that it is Parliament’s understanding of that law as evincing such a defect which

essentially, the House of Lords chose to confirm the traditional rule,

Subsequent to the decision in Harding, Rome II was adopted and came

The european Commission rejected this provision, and instead Article

According to the current national rules on compensation awarded to victims of road

56 Harding HL, supra note 23 at para 51 [emphasis added].

4) Issues Relating to the Assessment of Damages Should be

The purpose of a forum’s procedural rules was defined by La Forest J in

• evidentiary matters, such as admissibility, the requirements of

60 Symeon C Symeonides, “Rome II and Tort Conflicts: A Missed Opportunity”

• laws governing who are the proper parties to a lawsuit;64

The following have also been suggested as matters of procedure to be

• how the matter gets to court – the pleadings, directions hearings,

Issues affecting the quantification of damages are properly excluded, in my