Nov 10

Saadati v. Moorhead: Are Damages to your Mental Health at Work a Compensable Injury?, Toronto Employment Lawyer


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Even in the most secure working environments, one may experience strife with their employer from time to time. Once this relationship has deteriorated to a point of no return, and the employee feels as if they have become stressed by the job to a point where they seek medical attention, the employment has crossed into a territory where the employee may seek compensation for mental health damages. 

A recent decision by the Supreme Court of Canada in Saadati v. Moorhead, 2017 SCC 28, has brought to light the issue of mental health damage incurred. It might have serious implications on similar damages in employment relationships.


The Plaintiff sued the Defendant, Grant Iain Moorhead, for negligence, seeking damages for non-pecuniary loss and past income loss.  On July 5, 2005, the Defendant Struck the Plaintiff with their car. 

While at trial, the Court heard testimony from the family of the Plaintiff that supported the position that a psychological change in the Plaintiff had indeed occurred after the accident with the Defendant. The judge noted that this accident was the direct cause of the cognitive difficulties and personality changes that the Plaintiff had experienced and, as such, awarded the Plaintiff $100,000.00 for non-pecuniary damages. 

The Defendant appealed the decision due to the judge not awarding the Defense the opportunity to respond to the allegations and evidence presented by the Plaintiff.  The Court of Appeal in British Columbia accepted the appeal by the Defendant, agreeing that there was a lack of expert evidence indicating a medically recognized psychiatric or psychological injury. On appeal, the judge heard testimony from the Defendant who argued, among other things, that the trial judge had erred in his decision to award damages for a mental injury that lacked proof of a “medically recognized psychiatric or psychological illness or condition” (para. 22). The Court of Appeal tended to agree with the Defendant in that expert medical opinion evidence was not introduced, and was needed to determine the existence of a medically psychiatric or psychological disorder.

The Court of Appeal decision was then appealed to the Supreme Court of Canada by the Plaintiff.


In the ruling by the Supreme Court of Canada, the judge noted that, the liability for negligence was conditioned upon the claimant showing that the defendant owed a duty of care to avoid the kind of loss alleged, that the standard of care was breached, and that the claimant sustained damage resulting in the standard of care being breached (para. 13). 

What the Court was interested in, particularly in this case, was the third element; whether the Plaintiff sustained damage resulting in the standard of care being breached. The judge noted that the Defendant argued that the trial judge erred in awarding damages for a mental injury that did not correspond to a proven, recognised, psychiatric illness.  The judge then noted that the Court must answer whether it is strictly necessary to ask for expert evidence, or other proof, when determining whether a psychological or psychiatric injury had occurred. 

The Court referred to the decision in Mustapha v. Culligan of Canada Ltd. (2006), 84 O.R. (3d) 457 (C.A.) in determining whether recoverability from a mental injury was dependent upon the claimant satisfying the aforementioned criteria needed to prove negligence. This case demonstrated that even though it has been established that a duty of care existed, a breach occurred, and damage and factual causation are established, there still remains a threshold question of legal causation or remoteness (para. 20). It further goes on to explain that a person must be able to reasonably foresee the results of their actions. 

Based on Mustapha, the judge determined that “a vigorous search for the truth, not the abdication of judicial responsibility” must be taken into account when determining whether a case is feigned/exaggerated or factually accurate. (Toronto Railway Co. v. Toms, (1911) 44 S.C.R. 268 at p. 276.) Secondly, the court determined that the appellate court erred in determining that a recognized psychiatric illness is needed to make a decision on a persons’ psychological/psychiatric injury. In paragraph 31, it states that, “while for treatment purposes, an accurate diagnosis is obviously important, a trier of fact adjudicating a claim of mental injury is not concerned with diagnoses, but with the symptoms and their effects.” 

With the final decision of the Supreme Court of Canada, the Court determined that for a claimant to show that mental injury occurred, they must show that a claimant’s cognitive functions and participation in daily activities were impaired, the length of such impairment, and the nature of the effects of any treatment. 

Liability: On the Employer, or on the LTD provider

Therefore currently it is a live issue as to what the potential liability for employers is regarding mental health. However, it is undisputed that these issues can be covered by Short or Long-Term Disability (STD or LTD).

Therefore it is worthwhile examining your potential claim against both your employer, as well as the insurance company that the employer has hired in order to insure against these risks.

At Monkhouse Law, we also specialize in Long-Term Disability (LTD) and can help you receive the benefits you deserve, even if your employer is not liable for damages to your mental health. It is important to hire a lawyer that is familiar with both disability, and also employment if you have suffered mentally from treatment, or termination, at work.

Monkhouse Law Analysis

This case shows that there are key details within an employment relationship that must be maintained. One of which, is that an employee that develops a mental health issue as a result of the workplace has legal avenues that can be explored with regard to holding an employer to account if they are indeed responsible for the mental illness. Secondly, that there is not a need for medically proven evidence to determine that a psychological condition is present and that the employer is the cause of said condition. Overall, an employee only needs to determine that the employer had a duty of care to the employee, that the standard of care was breached by the employer, and that there is a harm that significantly impacts the life of the employee. 

If you have suffered a mental health issues as a result of a workplace incident, call Monkhouse Law today for a free 30-minute phone consultation to discuss your rights!


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