Canada’s property and casualty insurers posted a combined $7.88 billion in profit in the third quarter of 2025 alone, a number that Shane Katz, senior lawyer at Singer Kwinter, believes highlights the issue with punitive damages in the courts. According to the report, Katz thinks the courts have got punitive damages wrong, particularly when it comes to insurance companies.
The whole point of punitive damages is to deter bad faith conduct from insurance companies. Katz notes that slapping a $100,000 punitive award on them is essentially just a licensing fee to continue doing business this way.
Punitive Damages in Canada
Singer Kwinter has built its reputation for taking on insurers in the early 2000s, when founding partner Alf Kwinter secured a string of significant punitive damages verdicts. In 2003, a jury awarded punitive damages of $350,000 in Plester v. Wawanesa Mutual Insurance Co. after a five-week trial, once the insurer had denied a fire loss claim by alleging arson.
Katz notes that the trial results in Mazza and Plester set the tone for the firm in terms of what they can do with respect to punitive damages. Singer Kwinter remains the only law firm in Canada to have obtained a punitive damages award against an insurer on four separate occasions.
Current Frustrations
Katz’s current frustration centres on a threshold that hasn’t moved much since Kwinter’s streak. Whiten v. Pilot Insurance Co., where the Supreme Court of Canada upheld a $1-million punitive damages award against an insurer for bad faith handling of a homeowner’s fire claim, remains one of the only awards of its size in Ontario in over two decades.
While the firm will pursue punitive damages where the facts support it, most bad faith claims never make it to a courtroom because the vast majority settle.
Strong evidence of potential bad faith can push an insurer to pay a higher percentage of a claim to avoid trial, Katz says. Insurers will almost never explicitly agree to pay punitive damages as part of that settlement, no matter how strong the case looks.
Those that do reach trial have to contend with the standard set by the SCC in Whiten, which established that punitive damages exist to serve retribution, deterrence, and denunciation rather than to compensate the plaintiff.
Katz looks at whether the conduct was planned and deliberate, whether there was pressure to settle, and how long the behaviour went on for.
Even though most don’t get to trial, he says they see evidence of bad faith in a lot of these cases.
Judicial System
Judges, Katz adds, tend to be too cautious even when a case does reach trial.
He finds the lack of significant awards in Ontario concerning.
Insurance companies would argue it’s because they’ve been behaving better, “but not from what I’ve seen,” he says.
Katz also notes that the judicial system is heavily slanted in favour of the insurance company.
When you go to the table with one party who is an individual policy holder or even a small corporation, and the other is a company that makes billions in profit, you have a major uphill battle, he says.
The stakes soar even higher because of the loser-pays costs rule: if the insurer loses at trial, they dust themselves off and carry on but for the other side, the decision may financially ruin them.
Katz points to Ontario’s no-fault auto insurance system as a clear example, where accident benefits disputes go to the Licence Appeal Tribunal (LAT), which generally doesn’t award costs against either side — insurers included — unless a party’s conduct was frivolous, vexatious, unreasonable, or in bad faith.
That means an insurer can deny a benefit, force a claimant through a hearing and lose, with no financial consequence beyond paying the benefit it already owed.
Katz thinks the government should take a hard look at these situations and change the Rules of Civil Procedure in a way that makes the bargaining power more equal.
He suggests creating certain cost consequences to level the playing field, to help people affected by asbestos exposure and other issues.
Singer Kwinter’s niche of property loss claims means its day-to-day work centres on large commercial and residential losses where an insurer has refused to pay.
What makes this area of practice different is points of contention like arson allegations, where Katz and the team must get into evidence regarding motive and opportunity.
Although punitive damages awards remain rare, Singer Kwinter remains ready to pursue the damages where appropriate.
Katz urges judges and the courts, when faced with these cases, to strongly consider giving awards that will properly deter insurance companies from bad faith conduct, and lawyers to share their expertise.
