Canada: Disadvantages Of Historical Sexual Abuse Class Actions

Class action proceedings in Ontario are governed by theClass Proceedings Act1992, S.O. 1992, c.6 (the CPA). They allow a person to advance a legal claim on behalf of two or more individuals where common issues exist. Class actions aim to achieve judicial efficiency, increase access to justice for those with claims that may not have been pursued otherwise and modify the behaviour of those whose actions affect many people.

The CPA outlines the legal requirement for a claim to be certified by the court as a class action and must include:

• A valid cause of action;
• An identifiable class of two or more people;
• Common issues;
• A representative plaintiff; and
• Satisfaction by the court that a class proceeding is a preferable procedure for resolving the common issues.

The CPA also provides the procedural framework for the prosecution of these claims, including rules regarding notice, settlement, lawyers' fees, etc.

Class action legislation developed because of product liability cases. The CPA provides an effective procedure to obtain a remedy for product liability claims that affect many people, particularly where the individual claims are small as compared to the significant cost of legal fees in a lawsuit. For example, if there is a defect in a small car part, a class action may be appropriate and preferable to individual lawsuits.

Recently, class actions have been certified in several cases for claims arising out of historical sexual abuse in institutions - particularly, claims against private schools, religious organizations and government-run facilities. While there may be some advantages to pursuing historical sexual abuse claims by way of a class action, there are also distinct disadvantages.

Class proceedings in historical sexual assault

In a class action, the class members have a very minor role to play, are not involved in instructing the lawyers or making decisions about how the case proceeds and have no input into settlements. Class members are usually not involved until the last stage of the case where their individual damages are determined. Conversely, if those persons hired a lawyer and brought their own respective lawsuits, the client would be the one making decisions and instructing the lawyer.

For sexual abuse survivors, legal cases are usually about more than just money. They are about coming forward, being heard and acknowledged, and holding people to account, as well as gaining a sense of justice and closure. In a class action, these goals can get lost. Also, in sexual abuse class actions, the quantum of damages is usually much lower than the recovery in an individual action. So, to the extent that a sexual abuse survivor wants to maximize their financial recovery, an individual action is usually a better option.

The certification of historical institutional abuse cases as class actions began with theRumley v. British Columbia[2001] 3 S.C.R. 184 case in British Columbia. There, the court certified a class action for abuse survivors from the Jericho Hill School for the Deaf. The government ran the school and had already set up a compensation scheme for those abused at the school.

The government's compensation scheme had a maximum payment of $60,000 for each abuse victim. In considering whether or not to certify the case as a class action, the court specifically said that $60,000 was too low a cap on damages in 2001. The case was ultimately settled for compensation of up to a maximum of $125,000 per class member.

Unfortunately, class members in institutional abuse cases in Ontario have not fared nearly as well. For example, in 2010, the Johnston case settlement (Johnston v. Sheila Morrison Schools[2010] O.J. No. 2473 andJohnston v. Sheila Morrison Schools[2013] O.J. No. 1126) capped the abuse victims' compensation of up to a maximum of $50,000 per class member. However, the lawyers were awarded legal fees in the amount of $1,118,499.64.

In theSlarkcases (Slark (Litigation guardian of) v. Ontario[2010] O.J. No. 5187, (also known as Huronia, which refers to Huronia Regional Centre, the Crown-operated facility named in the case) andSlark (Litigation guardian of) v. Ontario[2013] O.J. No. 5530) and the related case(McKillop (Litigation guardian of) v. Ontario[2014] O.J. No. 942, which involves the Rideau Regional Centre and Southwestern Regional Centre), the maximum compensation to the abuse victims was even lower. In theSlarkcases, the settlement agreement arranged by the class's lawyers provided for maximum compensation of up to $35,000 per class member. However, the average actual payment to survivors was only $3,711.22. The lawyers got legal fees of more than $16 million.

In theSeed v. Ontario[2017] O.J. No. 2958 (Superior Court) case, which involved abuse at the Ross MacDonald School for the Blind (Ontario School for the Blind), the settlement package provided for compensation of up to $37,500 per class member. However, only 181 class members actually received compensation, for an average payment of $16,285. The lawyers got legal fees of $2,520,000 plus disbursements and HST.

One interesting thing about these institutional abuse cases in Ontario is that aggregate damages - damages for the class as a whole - have never been paid as part of a settlement package. Although aggregate damages are identified as a common issue to justify certification of the case as a class action, in Ontario, class action settlements have provided for individual damages only to those who were physically or sexually assaulted, but not aggregate damages. Therefore, one of the principal justifications for certifying the dispute as a class action is undermined in those settlements.

In one recent class action for institutional abuse, the judge stated his concern about the settlements and legal fees. In theWelshcase (Welsh v. Ontario[2016] O.J. No. 4435 andWelsh v. Ontario[2018] O.J. No. 2752), Justice Paul M. Perell expressed great disappointment and disapproval of the proposed settlement, which provided that 90 per cent of the class members would get no compensation, no apology or anything at all (even indirectly). The lawyers basically conceded that aggregate damages to those who were not abused were not available in law and only those who were actually physically or sexually assaulted could receive compensation.

Justice Perell approved the settlement reluctantly because he felt the alternative of forcing the case to trial would be even worse for the survivors. He also disapproved of the legal fees, and ordered that lawyers donate $1.5 million of their $3.75 million in legal fees to a charity or charities for the deaf. The case was appealed and the court's order that the lawyers contribute to a charity was set aside.

This is part one of a three-part series. Part two will discuss individual actions for sexual assault.

This article was originally published inThe Lawyer's Daily.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.