I) Contractual Relational Economic Loss

The early common law developed a cause of action per quod servitium amisit that continues to be applicable in most provinces. In modern terminology, it is an action for contractual relational economic loss arising from the injury of an employee. The claim can be brought by the employer for the loss of services provided by the employee where the employee was injured by a tortfeasor. The action was originally based on the idea that the employer had a proprietary right in his servant. Attitudes to the employment relationship have changed dramatically since then, but the action remains as an exception to the exclusionary rule.

The current scope of the action has not been authoritatively determined by the Supreme Court. It probably applies in respect of all injured employees so long as they remain in the employer's employment after the injury. The employer may recover his own losses such as the cost of replacement workers, benefits paid to the employee, and, possibly, a loss of business profits. [Note 106: 1 See J. Irvine, "The Action Per Quod Servitium Amisit in Canada" (1980) 11 C.C.L.T. 241.]

The action per quod servitium amisit has been abolished in British Columbia. [Note 107: 1 Law and Equity Act, R.S.B.C. 1996, c. 253, s. 63. The action is also abolished in New Brunswick: see Law Reform Act, above note 55, s. 1(1).] Nevertheless, in D'Amato v. Badger, [Note 108: [1996] 2 S.C.R. 1071.] an automobile- repair corporation sued for a loss of profits arising from an injury to a part-owner and employee of the corporation. To circumvent the statute that abolished the old common law action, the plaintiff corporation characterized its action as one in negligence for contractual relational economic loss. The plaintiff, which may have been encouraged by the uncertainty generated by the Norsk decision, was unsuccessful in the Supreme Court. The Supreme Court held that the claim could not succeed under either the proximity approach championed by McLachlin J. or as an exception to the exclusionary rule under the approach favoured by LaForest J. in Norsk. [Note 109: D'Amato was decided before Bow Valley.] The indeterminacy concerns were sufficient to negate a duty of care. Major J., who spoke for the Court, concluded that to allow the claim would invite many further actions by other individuals and corporations and would remove the incentive for plaintiffs to protect themselves by securing first-party insurance to cover foreseeable financial losses or, where possible, to negotiate on the question of who will bear the risk of the loss. This decision may foreshadow the demise of the action per quod servitium amisit. The ancient action does not seem consistent with the Court's general approach to relational economic loss.

ii) Non-contractual Relational Economic Loss Arising from Personal Injury or Death

The only kind of non-contractual relational economic loss that is recoverable is that which is suffered by the family members arising out of the death or injury to a relative caused by the defendant's negligence.

aa) Death of a Family Member

Fatal accidents legislation in all provinces allows family members to sue for their loss of financial support caused by the wrongful death of a close relative. Indeterminacy concerns are addressed by the legislation. It carefully defines the range of family members who have claims and the range of losses that are recoverable. [Note 110: See chapter 2.]

bb) Injury to a Family Member

The ancient common law action per quod consortium amisit allowed a husband to recover damages for a total loss of consortium arising from injuries to his wife caused by a tortfeasor. Consortium has two elements, an economic element and an emotional element. The economic element includes the domestic services provided by a wife in the home. The emotional element includes the support, comfort, and affection provided by a wife. The action that covered both kinds of losses was not available to the wife. This blatant sexism has led to two different reforms. Some provinces have abolished the action. [Note 111: The action has been abolished in British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, and Saskatchewan.] The others have extended it to wives. There is some doubt about the scope of the modern action in those provinces where it survives. It probably continues to allow recovery both for loss of domestic services [Note 112: The claim for loss of domestic services is today more properly framed as being for the loss of homemaking capacity, to be brought by the injured person.] (non-contractual relational economic loss) and for the intangible emotional loss of a spouse. It is also probable that a spouse may recover damages for a partial loss of consortium as well as for its total destruction.

Ontario has extended its fatal accidents legislation to permit claims by close family members of those injured by a tortfeasor. They may sue for their own pecuniary loss (non-contractual relational economic loss), such as expenses incurred for the benefit of the injured person and, where domestic and health-care services are provided, the value of those services and lost income. [Note 113: Family Law Act, above note 29, s. 61(2).]