A recent decision of the Canadian Supreme Court provides an interesting contrast to the statutes in Australia requiring a recognisable psychiatric illness for a mental harm claim.
By way of example, section 31 of the Civil Liability Act 2002 (NSW) provides that there is no liability to pay damages for pure mental harm resulting from negligence unless the harm consists of a recognised psychiatric illness. In relation to consequential mental harm, section 33 provides that court cannot make an award of damages for economic loss for consequential mental harm resulting from negligence unless the harm consists of a recognised psychiatric illness.
However in Saadati v Moorhead  SCC 28, nine judges unanimously held that confining compensable mental injury to conditions that are identifiable with reference to psychiatric diagnostic tools is inherently suspect as a matter of legal methodology. There is no necessary relationship between reasonably foreseeable mental injury and a diagnostic classification scheme.
The court commented (at ) on some aspects of the DSM system, noting (impliedly critically) that it included homosexuality as a psychiatric disorder until 1973.
Authors cited include Rachael Mulheron, Nicholas Mullany, Peter Handford and Jane Staptelton.
The headnote includes:
A finding of legally compensable mental injury need not rest, in whole or in part, on the claimant proving a recognized psychiatric injury. The law of negligence accords identical treatment to mental and physical injury. Requiring claimants who allege mental injury to prove that their condition meets the threshold of recognizable psychiatric illness, while not imposing a corresponding requirement upon claimants alleging physical injury to show that their condition carries a certain classificatory label, would accord unequal protection to victims of mental injury. Distinct rules which operate to preclude liability in cases of mental injury, but not in cases of physical injury, should not be erected. The elements of the cause of action of negligence, together with the threshold stated in Mustapha v. Culligan of Canada Ltd., 2008 SCC 27 (CanLII),  2 S.C.R. 114, for proving mental injury, furnish a sufficiently robust array of protections against unworthy claims.
Furthermore, confining compensable mental injury to conditions that are identifiable with reference to psychiatric diagnostic tools is inherently suspect as a matter of legal methodology. While, for treatment purposes, an accurate diagnosis is obviously important, a trier of fact adjudicating a claim of mental injury is not concerned with diagnosis, but with symptoms and their effects. There is no necessary relationship between reasonably foreseeable mental injury and a diagnostic classification scheme. A negligent defendant need only be shown to have foreseen injury, and not a particular psychiatricillness that comes with its own label. The trier of fact’s inquiry should be directed to the level of harm that the claimant’s particular symptoms represent, not to whether a label could be attached to them.
To establish mental injury, claimants must show that the disturbance is serious and prolonged and rises above the ordinary annoyances, anxieties and fears that come with living in civil society. Expert evidence can assist in determining whether or not a mental injury has been shown, but where a psychiatric diagnosis is unavailable, it remains open to a trier of fact to find on other evidence adduced by the claimant that he or she has proven on a balance of probabilities the occurrence of mental injury. It also remains open to the defendant, in rebutting a claim, to call expert evidence establishing that the accident cannot have caused any mental injury, or at least any mental injury known to psychiatry.
In the instant case, the trial judge accepted evidence that clearly showed a serious and prolonged disruption that transcended ordinary emotional upset or distress. These findings have not been challenged and are entitled to appellate deference. There is no legal error in the trial judge’s treatment of the evidence of S’s symptoms as supporting a finding of mental injury, even in the absence of expert testimony associating them with an identified condition.