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Breach of a Settlement Agreement Attracts $50,000 Punitive Award


The court has made it clear, where there is a blatant breach of a settlement agreement, a punitive damages award is appropriate in addition to the other awards. In this case the court was satisfied that an award of punitive damages in the amount of $50,000 was an appropriate amount. In ICBC settlements the same principles apply and ICBC must fulfill the terms of the agreement
A settlement amount of $243,500 was part of the claimants settlement of his his wrongful dismissal lawsuit.  He signed a Mutual Release and Settlement Agreement. The defendants went on to breach the settlement agreement. The claimant described how he was reduced to begging for compliance with the Settlement Agreement to no avail. 
In awarding $50,000 to punish the defendants for the conduct in breaching the settlement agreement the court has this to say,

[218] Punitive damages can be awarded in any case where there is an independent actionable wrong. In Hill at para. 199, the Court recognized that punitive damages serve a useful purpose in defamation cases:

… [b]ut for [punitive damages], it would be all too easy for the large, wealthy and powerful to persist in libeling vulnerable victims. Awards of general and aggravated damages alone might simply be regarded as a license fee for continuing a character assassination. The protection of a person’s reputation arising from the publication of false and injurious statements must be effective. The most effective means of protection will be supplied by knowledge that fines in the form of punitive damages may be awarded in cases where the defendants conduct is truly outrageous.

[219]     In Le Soleil Hospitality Inc. v. Louie, 2010 BCSC 1183 at para. 376, aff’d 2011 BCCA 305, the court recognized that where the commercial contract involved is a settlement agreement, as opposed to an ordinary commercial contract, there is a real and substantial public and private cost associated with its breach and a public value in pressing for denunciation, deterrence and punishment by an award of punitive damages.(Salager v. Dye & Durham Corporation,2018 BCSC 438)

If the timing of the settlement payment is important, make sure the timing of the payment is a term of the agreement. Most insurers however such as ICBC will be hesitant to agree on a deadline for the payment of the settlement proceeds under a settlement agreement.
Posted by Personal Injury Lawyer Mr. Renn A. Holness, B.A. LL.B.

Tags: ICBC Settlement, punitive damages, Settlement Agreement

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