November 2022 | Article

Disadvantages of historical sexual abuse class actions, part three

The Lawyer's Daily

Part two of this series examined individual actions for sexual assault, noting that it is usually in an institutional defendant’s interest to have a class action. In Ontario, if a historical institutional abuse class action is certified, the defendant has the opportunity to pay pennies on the dollar for those who come forward and collect damages under the class proceeding. To the extent that the money they have put up as a settlement fund is not actually paid out, it is usually returned to the defendant.

In addition, the defendant benefits from having the claims of all the abuse survivors who have not come forward to collect their money under the class action and have not already opted out extinguished, which minimizes the defendant’s liability to pay what would otherwise have been valid claims.

However, amendments to Ontario’s Class Proceedings Act 1992, S.O. 1992, c.6 (the CPA) may have increased the court’s power to address these problems.

On Oct. 1, 2020, amendments to the CPA contained in Bill 161 came into effect. The provisions relating to the certification test and requiring a report after distribution of settlement funds may help to address some of the concerns. The previous provision required that a class proceeding be the preferable procedure for the resolution of the common issues.

The amended CPA requires that: (i) the proposed class proceeding be a superior means of determining the rights or entitlement of the class members, as compared with, inter alia, any quasi-judicial or administrative proceedings; and, (ii) that questions of fact or law common to the class members predominate over the individual issues. Most of the historical abuse cases certified to date involve abuse in residential institutions. Where the common issue is vicarious liability, it may not predominate over individual issues, since the law establishing vicarious liability in residential care settings was settled in Bazley v. Curry [1999] 2 S.C.R. 534. 

The CPA now requires the administrator distributing settlement funds to file a report with the court no more than 60 days after the settlement funds are fully distributed, setting out the particulars of the distribution. The CPA sets out the specific information the report must contain. This public accountability for the actual payments to sexual abuse survivors and the information derived therefrom may cause courts to think twice before certifying cases involving sexual abuse.

Two recent decisions seem to indicate that courts are becoming aware of the unique challenges of abuse cases.

In Johnson v. Ontario [2022] O.J. No. 4633, the Ontario Court of Appeal considered a motion for a late opt-out in a case involving damages for negligence and Charter violations arising from the operation and management of an Ontario detention facility. The test applied by the Court of Appeal is based on the following two questions: 

  •  Was the delay in opting out a result of excusable neglect, in good faith and on a reasonable basis?
  •  Will prejudice result to participating class members, the defendant or the integrity of class proceedings if the extension is granted? 

The Court of Appeal allowed the late opt-out and found that the appellant’s neglect to opt out was excusable because he did not receive the notices and was incarcerated at the time of the notice. The court said that a notice plan can be adequate and notice can be sent in compliance with the notice plan, but that is not determinative of whether there was a reasonable and good faith basis for the delay.

Here, there was no delay in requesting an extension once the appellant knew about the class proceeding. The court did say that a motion for a late opt-out after settlement or judgment would cause prejudice and likely be denied.

In Liptrot v. Vancouver College Ltd. [2022] B.C.J. No. 1910, a B.C. court structured a class action in a manner that provides additional protections to abuse survivors. In this case, the court said, 

First, class members have no limitation period for proving damages. Class members can come forward whenever they wish. Second, class members are only bound by the determination of common issues. They will maintain autonomy over the proof of individual damages. Third, the opt-out process will be confidential, although I note that at least one defendant intends to challenge that approach. Fourth, the opt-out deadline will extend until the common issues are decided.

This case goes a long way to addressing the problems with certifying class actions based on abuse.

A better way to reconcile the difficulty presented by the opt-out provision with the benefit of a class proceeding would be to have an “opt-in” provision for historical institutional abuse cases. In this way, potential class members who are notified of the class proceeding would have the choice of either coming forward, opting in and becoming part of the class action, or staying silent and not having their claims extinguished.

If the abuse survivor is not ready to come forward, he or she can stay silent and still preserve their right to pursue an individual action at a future time should they become ready to do so. However, an “opt-in” procedure is unlikely to be popular with defendants who seek finality and closure, and may result in fewer “consent” certification motions — but maybe this is a good thing.

A further legislative amendment may be necessary to provide for an opt-in provision. In the meantime, at a minimum, class counsel should be required to advise potential class members to seek independent legal advice before deciding whether or not they should opt out. The notice should inform members that most personal injury lawyers work on contingency and offer pro bono consultations.

Adding this provision will not help abuse survivors who do not receive the notice, or those who receive it but cannot yet speak about the abuse, but it may assist those who come forward to better understand the advantages and disadvantages of class actions compared to individual lawsuits.

The notice should also contain information about the new program, whereby sexual abuse survivors who were assaulted in Ontario and are 16 years old are eligible for a certificate enabling them to receive four hours of free legal advice.

This is the final part of a three-part series. Part one: Disadvantages of historical sexual abuse class actions; part two: Disadvantages of historical sexual abuse class actions, part two.

Loretta P. Merritt, of Torkin Manes LLP, is one of the few lawyers in Ontario who has substantial experience in dealing with abuse and harassment in civil lawsuits and employment cases. She has represented hundreds of clients in a variety of historical and recent sexual and physical abuse cases. Merritt’s civil litigation practice also includes traumatic injury litigation (motor vehicle cases, medical malpractice and product liability). 

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