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ARTICLE · 27 MAY 2024

SCC Outlines Compensation For Constructive Expropriation: Economic Reinstatement Is The Lynch-Pin

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In St. John's (City) v. Lynch, 2024 SCC 17, the Supreme Court of Canada reviewed the law governing the calculation of compensation for "constructive" expropriation.

CanadaLitigation, Mediation & Arbitration
Shalom Cumbo-Steinmetz
Shalom Cumbo-Steinmetz
Alexandra Shelley
Alexandra Shelley
Alina Butt
Alina Butt
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In St. John's (City) v. Lynch, 2024 SCC 17, the Supreme Court of Canada reviewed the law governing the calculation of compensation for "constructive" expropriation. Lynch rounds out a 2022 decision by the Supreme Court that clarified the test for constructive expropriation—i.e., the scenario where an authority legally restricts all "reasonable uses" of a property1. In this latest decision, the Supreme Court addressed how compensation is calculated when a constructive expropriation occurs.

The decision illustrates the highly contextual analysis that authorities and owners face when determining compensation in situations of constructive expropriation. It also presents strategic lessons for both sides.

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