Greatly simplified, many legal claims come down to two concepts, liability (responsibility) and damages. Liability is generally focused upon how the event occurred, and whether someone else is legally responsible (for any resulting loss). Examples include who was responsible for causing an accident, whether a party breached a contract or whether a loss is covered by an insurance policy. Damages in turn addresses the question of how much compensation a party is legally entitled to as a result, sometimes described in legal terminology as the ‘quantification of the loss.’
Different types of losses are measured (quantified) in different ways in Ontario. For instance, in claims for personal injury, damages are awarded for pain and suffering, which you can read about here, whereas in claims arising in contract, damages are typically measured as the difference between where you ended up, and where you should have ended up (had the other party performed, often referred to as the ‘benefit of the bargain damages’). For example, if you sold your house for $1,000,000.00, but the buyer failed to close because the market fell, and you ended up selling your house for only $850,000.00, damages would be the difference in selling price, or $150,000.00.
In many contractual cases and business disputes, damages are proven by making a list of items that were damaged or destroyed, although lost revenues/profits, other consequential losses, business interruption and incidental costs incurred must also be considered and included.
An Example
For simplicity, let’s imagine that you own a one bedroom house in Toronto that caught fire, causing damage to the house itself (damage to the dwelling under the insurance policy), damage to the contents of the house, and that you had to stay somewhere else while the damage was repaired (i.e. at a hotel, eating at restaurants rather than preparing your meals at home yourself).
Step 1 – Determine the Types of Losses
Most claims involve more than one type of loss (or more than one category of type of expense, i.e. repairs to property, replacement of contents, additional expenses incurred while living elsewhere). For instance, in our hypothetical, there is damage to the house (dwelling), the contents of the house along with the potential for additional living expenses. In most cases, this only becomes apparent later when sorting/organizing invoices, receipts or quotes (as perhaps some are for contractors, some are for contents, and others are for meals and hotels). If for instance you are dealing with an insurance claim, you can look at your coverages (Declarations Page) to see what types of losses are covered, and in what amounts (and then sort your invoices, receipts and quotes accordingly, and once sorted, move onto Step 2 below).
Step 2 – Determine the Extent of Losses in Each Category
Once you have broken your losses down into a few types, it is helpful to pick one of the types, and start a list. So for example, let’s assume that there was fire damage to the plumbing, walls and floors of the house, which you paid to replace. I advise my clients to create a list as follows, with providers/items (and descriptions where necessary or unclear) and amounts:
Dwelling
- D1 – Able’s Plumbing Repair $1,500.00
- D2 – Bob’s Painting and Caulking $700.00
- D3 – Charlie’s Flooring $3,500.00
- Dwelling Total $5,700.00
Upon finishing that list, move onto the next category, and so on as follows:
Contents
- C1 – Havsten couch from Ikea[1] $1,160.00
- C2 – Coffee Table $500.00
- Contents Total $1,660.00
Additional Living Expenses
- A1 – Hotel Arizona 14 nights at $100 per night $1,400.00
- A2 – Meal Receipts 14 days at $50 per day $700.00
- Additional Living Expenses Total $2,100.00
These lists can be done in Word, in Excel or some other format. My suggestion is that each category has its own unique numbering (i.e. D1, D2, C1, C2 etc.) so that if a new item must be added to contents for instance, it does not affect the numbering of any of the items coming after it (or get added to the end of the list below Additional Living Expenses).
Step 3 – Documenting your losses
Starting with each type of loss, it is important to be able to provide supporting documentation. While things like photographs from before and after are always helpful, what is crucial is to provide receipts, quotes or invoices, or if none of those are available, listings of similar items offered for sale. These should be assembled in the same manner as they are contained in the list, and labelled accordingly (i.e. D1, D2, C1, C2 etc.). As additional items are found, they can simply be added to the end of each respective list, and the overall total can be updated. As with insurance claims, my general rule of “no receipts equals no reimbursement” applies. For example, if your couch was destroyed, but you were not able to locate the receipt for it (or prices had gone up), you would perhaps provide the below listing (being the same as the couch that was damaged/destroyed or the closest and most comparable example you could find). Be careful when doing this, as if you try reporting your son’s finger painting as the ‘Mona Lisa’ and claiming accordingly, you could be accused of insurance fraud.
Step 4 – Putting it all together
On completion of the above, you will have a comprehensive summary of the totals of the various types of damages, i.e.
Dwelling $5,700
Contents $1,160
Living Expenses $2,100
Total $9,460.00
Each item total is broken down into the (above described) list, with each item supported in one way or another with documentation.
If you have faced a substantial loss, call our Hamilton and Toronto damages lawyer at 647-495-8995 today if you require assistance with your claim.