April 2020 | Article

The problems with class actions for historical sexual abuse cases

 The Lawyer’s Daily

The certification of historical institutional abuse cases as class actions began with the Rumley v. British Columbia 2001 SCC 69 in British Columbia. There, the court certified a class action for abuse survivors from the Jericho Hill School for the Deaf. 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 v. The Sheila Morrison Schools 2010 ONSC 3334 and Johnston v. The Sheila Morrison Schools 2013 ONSC 1528 case settlement capped the abuse victims' compensation up to a maximum of $50,000 per class member. However, the lawyers were awarded legal fees in the amount of $1,118,499.

In the Huronia and related cases, Slark (Litigation guardian of) v. Ontario 2013 ONSC 6686 (Huronia Regional Centre), the maximum compensation to the abuse victims was even lower. In the Huronia cases, 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 The lawyers got legal fees of over $16 million dollars.

In the Seed v. Ontario [2017] O.J. No 2958 case which involved abuse at the W. Ross Macdonald School for the Blind (Ontario School for the Blind), the settlement package provided for compensation 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.

In the Welsh case, Welsh v. Her Majesty the Queen 2016 ONSC 5319 and Welsh v. Her Majesty the Queen 2018 ONSC 3217, Justice Paul Pere!l 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). Justice Pere!l 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. In fact, he ordered that lawyers donate $1.5 million dollars of their $3.75 million legal fees to a charity or charities for the deaf. That part of the decision was overturned on appeal.

Aside from low damages, there are other problems with class actions. 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. Conversely, in individual actions the client is the one making decisions and instructing the lawyer. For sexual abuse survivors, lawsuits 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.

Individual actions for sexual assault 

On the other hand, if survivors of historical institutional abuse sue in individual actions, damages are much greater and can be in the six-figure range. In several cases compensation of between $100,000 and $200,000 or more was awarded at trial.

There are other even bigger problems with class action for abuse institutional cases; namely notice and opting out. A time limit is set and if class members do not opt out by the specified date, they are deemed to be included in the class. After the trial of the common issues, there are individual damages trials. It is at this point class members need to come forward and pursue their individual claims for damages. If they fail to come forward, they are forever prohibited from pursuing compensation. The only way they can pursue an individual lawsuit is if they come forward before the opt-out deadline and follow the procedures set out by the court for opting out within the opt-out deadline at the beginning of the class action. If they do neither, they get nothing.

Sexual abuse survivors usually suffer serious psychological problems as a result of their abuse in childhood. There are also well-established links between childhood sexual abuse and substance abuse problems, problems with education and employment and criminal activity in later life. Many abuse survivors become homeless, move around the country or are "off the grid." In addition to the long passage of time in historical abuse cases, these other problems can make it difficult, if not impossible, to reach significant numbers of victims when the judicial notice of the class action is given. If a class member does not receive notice he or she has no opportunity to opt out and his or her right to seek compensation or to be heard and acknowledged will be forever lost.

Even if class members do get notice of the class proceeding, the opt out procedure in class actions is especially troublesome in historical sexual assault cases. It often takes abuse survivors 20, 30, 40 years or even longer to come forward. There are many reasons why sexual abuse survivors do not come forward including misplaced shame, guilt and fear of coming forward, or simply a desire to avoid thinking about and confronting the horrendous pain they suffered.

The importance of allowing abuse survivors to come forward in their own time was recently acknowledged by the Ontario government when it enacted Bill 132 amending the Limitations Act, 2002 to eliminate limitation periods for cases based on sexual assault. This amendment is a clear message to abuse survivors that their claims are important and that justice should not be rendered unavailable to them simply because it has taken them time to be ready to address the issue legally. The elimination of limitation periods provides more access to justice for abuse survivors. Conversely, class actions for historical sexual abuse claims require survivors to come forward and opt out or risk forever having their claims extinguished. In my view, any law or rule that requires an abuse survivor to come forward at a specific time is potentially harmful and contrary to the public interest expressed by the Ontario government in amending the Limitations Act.

It is usually in an institutional defendant's interest to have a class action. The defendant will enjoy the opportunity to pay pennies on the dollar for those who come forward under the class proceeding. To the extent that the money they have put up as settlement fund is not actually paid out, it is usually returned back to the defendant. As well, for all the other abuse survivors who have not come forward to collect their money under the class action and have not already opted out, the defendant enjoys the benefit of having all those claims extinguished and minimizes their liability to pay what would otherwise be valid claims.

One solution would be to have an opt in provision for historical institutional abuse cases. Arguably, a legislative amendment is necessary to provide for an opt in provision. In the interim, at a minimum class counsel should be required to advise class members to get independent legal advice before making a decision whether or not to opt out and that most personal injury lawyers work on contingency and give free consultations. This will not help those who do not receive the notice or are unable to speak about the abuse, but it may help people who are ready to come forward to better understand the advantages and disadvantages of class actions versus individual lawsuits.

This article was originally published by The Lawyer’s Daily, part of LexisNexis Canada Inc.

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