Fidler v. Sun Life: Mental Distress Damages for a Broken Contract
Contract damages usually cover money losses. But some contracts are about more than money. In Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, the Supreme Court of Canada held that damages for mental distress can be recovered when a contract is meant to provide peace of mind and it is broken.
- Mental distress damages are available where the contract's object includes peace of mind, and distress from a breach was within the parties' reasonable contemplation.
- Disability insurance is a classic example: it exists to protect people when they are vulnerable.
- The distress must be proven and of a degree that warrants compensation.
- Punitive damages are separate and require bad faith or misconduct, which wasn't found in Fidler.
The case
Ms. Fidler, a bank receptionist, received long-term disability benefits after being diagnosed with chronic fatigue syndrome and fibromyalgia. After about five years, Sun Life cut off her benefits, relying on surveillance. They were reinstated shortly before trial. The Supreme Court upheld an award of $20,000 for mental distress, but did not award punitive damages because the insurer had not acted in bad faith.
When distress damages may apply
- Disability and other insurance claims that are wrongly denied.
- Contracts for holidays, weddings, funerals or other personal events.
- Contracts where the main purpose was to provide security or peace of mind.
- In employment, damages for the manner of dismissal follow similar reasoning (Honda v. Keays).
Proving the claim
Bring evidence of the distress: medical or counselling records where they exist, and your own and others' accounts of how the breach affected you. The amount depends on the seriousness and how long it lasted.
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This article is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
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