Emotions can run high in any civil dispute. The parties in their anger will speak poorly of the other, they may treat each other with disdain or disrespect in the process. Feelings will inevitably be hurt and often psychological injury — temporary or permanent – may result.
The more emotional the situation, the more likely that this type of bad behavior will occur. Bad behavior can also occur in situations where a person or organization conduct themselves in an anti-social or unreasonable manner. Some individuals or corporations do not have any qualms about taking advantage over a person to who they owe a duty of good faith.
These issues come up frequently in employment cases. Employees fall into the class of persons who are expected to be dealt with in good faith (by their employers). Employers who act in bad faith may be punished by additional damages which are referred to as aggravated damages for psychological injury to an employee, or punitive or exemplary damages for outrageous conduct worthy of condemnation.
Fortunately the type of egregious conduct that warrants the imposition of these extra damages occurs quite infrequently in British Columbia. Unfortunately, however, litigants are far too frequent in their use of these serious allegations in cases they bring before the courts. The result is that relatively straightforward cases are made much more contentious, emotional, and time-consuming.
Some courts are prepared to impose sanctions with respect to inflammatory accusations that have no basis in reality. In an Ontario case, DiBattista v Wawanesa Mutual Insurance Co, the claimants made, but were unable to substantiate, serious allegations of misconduct and bad faith, against an insurance company. The court not only dismissed the claim but ordered hundreds of thousands of dollars in legal fees incurred by the defendants to be paid by the claimants. So the claimants because they made baseless accusations had to pay their own legal fees as well as the legal fees of their opponent. They recovered no damages so the consequences for them were horrific. Rather than recovering for their loss, they likely had to go into bankruptcy.
There are many more examples of courts across Canada punishing unfounded allegations of fraud by the imposition of a higher level of costs.
All litigants must seriously consider whether it is worthwhile to make allegations of bad faith and egregious misconduct without a sound basis for so doing.
Alf Kempf is the Chair of Pushor Mitchell’s Employment Law Group. He can be reached at 250-869-1215 or [email protected].
