Protecting Remedial Rights: A Rights-Based Defence of Punitive Damages

Evan Chow, JD Candidate (2026), University of Toronto

I.              Introduction

Punitive damages occupy an awkward position in the common law of contract. On the one hand, many courts have accepted punitive damages as a rare but available remedy for breach of contract. The remedy has a 30-year lineage in Canada.[1] On the other hand, scholars remain divided over whether the remedy can be justified. Ernest Weinrib, for example, rejects punitive damages as a private law remedy altogether.[2] Approaching the issue from the perspective of corrective justice, he argues that public law is the appropriate institutional place for punishment.[3] Curtis Bridgeman also explores the issue through a corrective justice lens, yet concludes that punitive damages can be justified.[4] The debate continues.

This post proposes and tentatively accepts a qualified, rights-based defence of punitive damages for breach of contract. Drawing on the corrective justice tradition, I argue that the remedy is justified when a particular breach occurs and results in excess normative loss. As illuminated by what corrective justice scholars call the remedial continuity thesis, that breach involves two violations of the plaintiff’s contractual right: in its substantive and remedial aspects.[5]Specifically, the defendant not only fails to perform, but also impairs the plaintiff’s ability to acquire relief. Standard remedies cannot fully address the normative loss caused by this twofold violation, since they are tied to and “run out” after addressing lost performance. Punitive damages can. They are not conceptually connected to a specific type of loss. Although I rely heavily on corrective justice, I aim to justify punitive damages not within that tradition, but within contract law.

This post proceeds as follows. Part II outlines Bridgeman’s account of punitive damages. I show that it provides a useful framework to explore the question but sets the threshold for punitive damages too low. Parts III and IV sketch my account. I explain how the remedial continuity thesis conceptualizes remedies, how the twofold violation may unfold in the contractual context, and why standard remedies cannot address the excess normative loss that results from that violation. Part V examines three strengths and three weaknesses of my account. Ultimately, I conclude that none of these weaknesses are fatal.

II.            Understanding Bridgeman’s Account and Normative and Factual Loss

Bridgeman’s account of punitive damages is premised on the distinction between factual loss and normative loss. Factual loss is material loss. It reflects a decrease in the plaintiff’s assets, which “include both one’s body and the external objects at one’s disposal.”[6] Normative loss, by contrast, is an intangible loss. It reflects a decrease in what the plaintiff should have, given “norms that set the terms of fair interaction,”[7] that is, their legal rights. Everyone has a baseline of rights that others cannot unjustifiably infringe.[8] When an unjustified infringement occurs, the plaintiff falls below that baseline. For example, if someone trespasses on a person’s property without impairing it, that person suffers a normative (but not factual) loss.[9] The trespasser violated the person’s right to control access to their property, contrary to the norm against trespass.

For Bridgeman, this distinction makes punitive damages available in principle. That is because normative loss can exceed factual loss. For example, “some violations of rights are particularly vile, normatively speaking, whether or not they result in much factual loss.”[10] If the two diverge in this way, and the law responds solely to the factual loss or does not fully respond to the normative loss, then it fails to adequately address the normative loss. The law must address the normative loss. In this way, Bridgeman outlines a useful framework for understanding how punitive damages can be justified in contract.

The type of rights violation that warrants punitive damages on Bridgeman’s account unfolds as follows. It involves a sophisticated promisor, who breaches the contract knowing they can pay damages instead, and an unsophisticated promisee. The promisor incentivizes the promisee to enter the agreement through performance-related reassurances.[11]As a result, the promisee, who “really desires”[12] performance, is in a vulnerable position. Then the promisor “completely disregard[s] the contractual obligation and instead simply opt[s] to pay damages.”[13] Bridgeman identifies the wrong in this scenario through a Kantian lens: the promisor has treated the promisee as simply a means and not an end.[14]

However, this threshold is too low. As Bridgeman himself acknowledges, his argument “seems to imply that punitive damages would be appropriate for any breach of contract, or at least for any willful breach.”[15] It does not require malicious conduct, an added wrong, or “something more”[16] to distinguish the breach. Even with the sophistication asymmetry, what Bridgeman describes involves “mere nonperformance.”[17] The defendant even fulfills their duty to pay damages. Moreover, Bridgeman’s example resembles cases that courts have adjudicated without needing to award punitive damages.[18] This resemblance does not necessarily defeat Bridgeman’s claim, since those courts could have been wrong in not doing so, but it is telling. In sum, Bridgeman’s use of Kant leads him to overstate the normative loss in this situation.

III.          Remedial Rights, Breach of Contract, and Punitive Damages

To determine what counts as a particularly vile rights violation, it is necessary to consider what a contractual remedy is under the remedial continuity thesis. It conceptualizes a remedy as the continuation of a plaintiff’s right after a defendant violates it. As Weinrib puts it, the plaintiff’s right “survives” the injury and becomes their “entitlement to the remedy.”[19] The thesis thus conceives of a “single inclusive right with two aspects for the different stages of the parties’ relationship.”[20] Ordinary damages represent the plaintiff’s contractual right to performance after a breach, at the remedial stage.

A violation of the plaintiff’s right in both its aspects can occur under the thesis. This twofold character is most clear in negligence cases involving causal uncertainty. Suppose two defendants simultaneously and negligently fire their guns, and one hits the plaintiff.[21] The defendants’ simultaneous acts make it impossible to determine the wounder’s identity. In this situation, Weinrib explains, whoever fired the shot that hit the plaintiff violated their right to bodily integrity in its “substantive aspect.”[22] Meanwhile, whoever fired the other shot violated that right in its “remedial aspect.”[23] That defendant “prevented the operation of the legal mechanism by which the plaintiff would receive damages equivalent to the restoration of their uninjured state.”[24] In sum, a twofold violation of the same right occurred.

This idea can apply, analogously, to the contractual context. The violation does not arise from causal uncertainty. Rather, I propose, the same defendant must not only fail to perform their promise, but also impair the plaintiff’s ability to acquire legal relief, even if ultimately unsuccessfully, through the breach or conduct connected to it.[25] This formulation retains the core idea, as Weinrib presents it, of the remedial violation: that the defendant undermines the operation of the legal mechanism for recovery. In this way, normative loss results from the violation of both aspects of the plaintiff’s contractual right. The remedial continuity thesis thus clarifies the twofold wrong in this case and the normative loss accompanying it.

            This violation may occur in different ways. Most often, a defendant will attempt upon breach to force a deficient settlement or biased alternative resolution procedure on the plaintiff and effectively foreclose the opportunity for relief. Protracted litigation may qualify too, so long as the defendant manufactures the delay and thereby obstructs redress. Consider Whiten v Pilot Insurance Co.[26] There, the insurance company Pilot not only refused to pay the Whitens’ insurance proceeds after a fire burned down their house, but also fraudulently alleged for two years that the Whitens had committed arson.[27] As the majority in Whiten recognized, Pilot was attempting to “starve” the Whitens into a “cheap settlement”[28] during that period of protracted litigation. If they had accepted the settlement, then the Whitens would also effectively have been barred from pursuing legal action for Pilot’s breach; they were under-resourced and probably would not have been able to set aside the settlement.

IV.          Normative Loss and the Twofold Violation

The twofold violation warrants punitive damages, I contend, because of the additional normative loss that results. Standard remedies cannot fully address that loss. Damages, specific performance, and injunctions can address the loss from the substantive violation. As courts have long held, contract law aims to put the plaintiff in the same position they would have been in had the contract been performed.[29] Ordinary damages do so by delivering to the plaintiff the monetary equivalent of what the contract promised. If the plaintiff had a particular interest in performance, then a court can use other measures of damages to address the breach.[30] Meanwhile, specific performance and injunctions can step in where damages are inadequate by delivering the subject matter of the promise itself.[31] In these ways, standard remedies address a specific factual or normative loss: lost performance itself.[32] They are tethered structurally to that substantive right; they run out or are spent, so to speak, after addressing it. Conceptually speaking, then, none of these remedies can address the normative loss from a remedial violation.

Unlike standard remedies, punitive damages can address that loss because they are not limited conceptually to a specific type of factual or normative loss. The broad judicial tests for punitive damages illustrate this claim. For example, in Vorvis v Insurance Corporation of British Columbia, the Supreme Court of Canda made the remedy available for breaches of a “harsh, vindictive, reprehensible and malicious nature.”[33] This test, formulated at such a high level of generality, can conceivably cover a wide range of losses, including the remedial violation. In sum, punitive damages need not correspond to a particular type of loss and can address the twofold violation.

V.            Assessing the Rights-Based Defence

Three Strengths

My account has three main strengths. First, by focusing on the plaintiff’s contractual right, it makes some thorny institutional questions raised by punitive damages less worrying. Such questions include whether punishment, in the sense of going beyond compensation, has a role in private law and whether civil courts should impose such punitive measures. My account does not completely avoid these and related questions. After all, there is an important sense in which punitive damages are still punitive: they address the remedial aspect of a rights violation, which courts do not usually do. My account, however, minimizes the normative force of these questions. Now, at least some part of a punitive damages award addresses (normative) loss, which courts are specifically in the business of doing. To better understand this first advantage, consider an alternative account.

For example, Benson’s compelling institutional argument for punitive damages, which unfolds in two steps, runs directly into the questions above. At the normative step, Benson identifies circumstances warranting punitive damages. Such a breach involves “a manifest malicious intent” that effectively denies the plaintiff’s “capacity to have and to enjoy any contractual rights at all.”[34] Here, the defendant not only refuses to perform, but also attempts to destroy those rights. Importantly, Benson indicates, the defendant does so relying on the general rule that redress is limited to compensation.[35] The defendant thereby implicates the legal system, specifically its compensatory character, in their scheme.[36] Then, at the institutional step, Benson contends that a court should award punitive damages in these circumstances to “vindicate the integrity of the compensatory character of ordinary damages.”[37] That award allows the court to remove itself from the defendant’s wrongdoing.

The questions are particularly forceful at the institutional step. Notice there that Benson relies on a more contestable—even if attractive—view of the proper role of courts than my account does. But should courts act in the way he suggests? If the law does not permit anything beyond compensatory damages in a particular case, is it really for the courts to intervene? While I do not disagree with Benson, a less contentious foundation would strengthen the case for punitive damages.

Second, my account strikes a good balance, in principle, on the availability of punitive damages. Where Bridgeman’s account makes the remedy available too often, Benson’s account might make it available too rarely. Between these poles lies my account. As catalogued above, a defendant can violate the remedial aspect of a plaintiff’s right in several ways (assuming that they do so for long enough). Of course, this is only a strength if one accepts that punitive damages should be available in contract.

Third, my account would help promote contractual fairness. It would put better-resourced defendants on notice, for example, that forcing cheap settlements on plaintiffs upon breach may result in punitive damages (assuming again that the violation is sufficiently long). It would emphasize that, if they want to breach, defendants must pay damages or at least allow plaintiffs to have their fair day in court. Contractual disputes should typically unfold there. Strongarming and other conduct that violates a plaintiff’s remedial right undermine contractual fairness.

Three (Non-Fatal) Weaknesses

At the same time, my account has three weaknesses. First, it takes many concepts from corrective justice for granted, namely the remedial continuity thesis and the distinction between normative and factual loss. For those who do not subscribe to corrective justice, my account may not be persuasive. But, as I hope to have shown above, there are points even skeptics and opponents of corrective justice can appreciate.

Second, my account possesses a certain artificial quality. Strictly speaking, unlike in cases of causal uncertainty, the defendants in the scenarios presented above never fully undermine the remedial aspect of the plaintiffs’ rights. Even though relief is effectively and meaningfully out of reach (in many cases because of power asymmetries), the plaintiffs can still technically access it. For example, a settlement that a defendant imposed on a plaintiff dishonestly, in bad faith, or oppressively can be set aside. This weakness may seem especially concerning since certain courts have rejected fictional elements of the law.[38] However, while cases of causal uncertainty may be the ideal type of remedial violation, that does not necessarily mean they are the only type. Moreover, legal fictions pervade the law.[39] This weakness, then, is not fatal.

Third, my account does not establish that punitive damages are necessarily, as a matter of logic, the right remedy for the normative loss. As Bridgeman asks rhetorically, why does an apology or public beating not suffice?[40] This weakness is admittedly true but not fatal, since I have argued that other legal remedies cannot address the loss. As for Bridgeman’s specific question, I would respond that neither option is a legal remedy. Therefore, neither would recognize that the plaintiff experienced a rights violation, which normative loss is all about.

VI.          Conclusion

            In this post, I have developed and tentatively accepted a qualified, rights-based account of punitive damages. I have argued that punitive damages can be justified for breach of contract when a particular type of breach occurs. This type of breach is one that involves a twofold violation of the plaintiff’s contractual right, in both its substantive and remedial aspects. Often, the defendant will attempt to force a settlement or a biased alternative resolution procedure on the plaintiff. Other times, the violation may involve protracted litigation. In any case, the result is excess normative loss that standard remedies are conceptually unable to handle. Punitive damages, which are not tethered to a particular kind of normative loss, fill that gap.

Notes

[1] Vorvis v Insurance Corporation of British Columbia, [1989] 1 SCR 1085, 1989 CanLII 93 (SCC) [Vorvis].

[2] Ernest J Weinrib, Corrective Justice (Oxford: Oxford University Press, 2012) at 169–83.

[3] Ibid at 170–75.

[4] Curtis Bridgeman, “Corrective Justice in Contract Law: Is There a Case for Punitive Damages?” (2003) 56:1 Vand L Rev 237.

[5] I also use the phrases “substantive right” and “remedial right” to capture these two aspects. I take the latter term (but not the sense in which it is used) from Rand J’s concurring opinion in Cook v Lewis, 1951 CanLII 26 at 832 (SCC) [Cook].

[6] Ernest J Weinrib, The Idea of Private Law, revised ed (Oxford: Oxford University Press, 2012) at 115.

[7] Ibid.

[8] Ibid at 116.

[9] Ibid.

[10] Bridgeman, supra note 4 at 248.

[11] Ibid at 274.

[12] Ibid at 264.

[13] Ibid at 261.

[14] Ibid.

[15] Ibid at 262.

[16] Weinrib emphasizes the need for something more in Weinrib, Corrective Justice, supra note 2 at 177.

[17] Peter Benson, Justice in Transactions: A Theory of Contract Law (Cambridge: Harvard University Press, 2019) at 556, n 76.

[18] See e.g. Jarvis v Swan Tours Ltd, [1973] QB 233 (CA) [Jarvis]; Ruxley Electronics and Construction, Ltd v Forsyth, [1996] 1 AC 344 (HL) [Ruxley].

[19] Ernest J Weinrib, “Causal Uncertainty” (2016) 36:1 Oxford J Leg Stud 135 at 144.

[20] Ibid.

[21] This is what happened in Cook, supra note 5.

[22] Weinrib, “Causal Uncertainty”, supra note 19 at 146.

[23] Ibid.

[24] Ibid.

[25] I should add two points. First, I included the proviso “even if ultimately unsuccessfully” because a defendant probably cannot fully preclude recovery in contract like causal uncertainty can in tort law absent a “special doctrine to deal with” it (see Weinrib, “Causal Uncertainty”, supra note 19 at 146). So, a defendant need only impair the remedial aspect at some point and for a long enough time. Obviously, on my account, the longer the impairment is, the more the plaintiff deserves punitive damages. The vagueness here is intentional because line-drawing in the abstract is not helpful. Second, influenced by Peter Benson’s account of punitive damages, I would say that the defendant must have some subjective awareness that they are violating the plaintiff’s contractual right in both its aspects (see Benson, supra note 17 at 556, n 76). A court should probably not respond to negligence with punitive damages, given the serious consequences.

[26] 2002 SCC 18 [Whiten].

[27] Ibid at para 25.

[28] Ibid at para 131.

[29] For a classic formulation, see Robinson v Harman (1848) 1 Exch 850 at 855.

[30] See Jarvis, supra note 18; Ruxley, supra note 18.

[31] Weinrib, Corrective Justice, supra note 2 at 168, n 48.

[32] I say factual or normative loss because Lon Fuller and William Perdue challenge the idea that expectation damages are truly compensatory. In short, they deny that contract formation transfers anything to the promisee. So, by awarding expectation damages to the plaintiff, courts award damages for something the plaintiff never had (see LL Fuller & William R Perdue Jr, “The Reliance Interest in Contract Damages: 1” (1936) 46:1 Yale LJ 52 at 53). For different responses to Fuller and Perdue’s challenge, see Benson, supra note 17; Weinrib, Corrective Justice, supra note 2 at 152–54. For a critical discussion of these responses, see Bridgeman, supra note 4 at 255–57.

[33] Vorvis, supra note 1 at 1108; see also Angela Swan, Jakub Adamski & Annie Y Na, Canadian Contract Law, 4th ed (Toronto: LexisNexis Canada Inc, 2018), s 6.451.

[34] Benson, supra note 17 at 556, n 76.

[35] Ibid.

[36] Ibid.

[37] Ibid.

[38] See NAV Canada v Greater Fredericton Airport Authority Inc, 2008 NBCA 28 at paras 29, 48.

[39] Ibid at para 23; see also Morris-Garner v One Step, [2018] UKSC 20.

[40] Bridgeman, supra note 4 at 248.