Common Obstacles Class Members Face In Settlement Claims Processes

By: Khawla Khalifa

To many players who are involved in legal actions, the word ‘settlement’ echoes sentiments of relief and the end of an ordeal. However, to class members of settled class actions, reaching a settlement could mean the beginning of yet another uphill battle. Although judges consider whether the settlement is in the best interest of the class at the time of settlement approval, the unfortunate truth is that it is typical among class members to experience great difficulty with navigating the claims process of the settlement.

Although some class action settlements provide direct payments to class members, most require that class members submit a claim to obtain their compensation. Eligibility and the amount of compensation are determined by settlement adjudicators.  When claims processes are complicated, the filing of a claim can be a rather daunting task for class members and may result in flawed outcomes. In helping several dozen class members navigate claims processes, the Clinic has identified a number of common pitfalls.

Compound Trauma

The Indian Days School Settlement Agreement (IDSSA) is an example of a claims process with which many class members experienced difficulty. This settlement, discussed in detail in a previous blog, involves the disclosure of abuse according to a court-approved scale that is then assessed by the Claims Administrator. Although the claims process was intended to be culturally sensitive, IDSSA did not allow class members to recount their stories over time to avoid re-traumatization (progressive disclosure), which is a critical component of trauma-informed lawyering. Consequently, those class members who had difficulty divulging their abuse submitted applications in support of a lower scale of harm than what they were eligible for, and were not permitted to file additional material, even if the Claims Administrator had not yet assessed their file. For these class members, this claims process was perceived to privilege efficiency over justice.

Other historical wrong class actions also require class members to disclose great detail and documentation and thus carry the risk of potential re-traumatization for the claimant. As previously discussed in a Clinic blog, the Indian Residential School Settlement Agreement (IRSSA) was widely hailed as a class action success story; nevertheless,the National Centre for Truth and Reconciliation Report references several challenges claimants faced in the claims process. Claimants described the process as invasive, requiring repeated disclosure to multiple persons. Other challenges that class members identified included re-traumatization, unclear eligibility requirements and unpublicized deadlines which ultimately led to claims being rendered ineligible.

Strictly Speaking

Strict interpretation of settlement agreements is another challenge class members face when claiming compensation through certain claim processes. There are many instances where claimants are denied compensation based on a strict interpretation of a class definition or a claims protocol. McRea v Canada is a case in which a claimant was instructed by her employer and government agencies not to apply for sickness benefits; however, since this application was a requirement under the class definition, the court agreed with the Claims Administrator that the claimant was ineligible for compensation.

Similarly, in Fontaine v. Canada (AG), the claimant, who was sexually assaulted by a government employee while being transported to a residential school, was denied compensation because she was deemed not to have been a “student” at the time of the assault, and the government employee was not technically a “school employee”. These instances of a strict interpretation of the class definition were an obvious barrier to a fundamental function of the class proceeding, access to justice.

Ironically, when claims administrators do not strictly adhere to deadlines or other protocols, there is little a class member can do. A recent example is the DePuy class action. As required in the Claims Protocol, claimants are to be informed of approval, rejection, or partial approval of their claims within 60 days of receiving a completed claims package. However, many claimants experienced delays in the processing of their claims, and this 60-day timeline elapsed without being informed of the administrator’s decision. Understandably, this caused claimants unnecessary anxiety as well as inconvenience.

Blind Spots

Some hurdles are created when the circumstances of marginalized class members are not addressed in the design of the claims process. The CPRI settlement agreement, for example, involved a government-run facility that treated children with developmental disabilities and serious psychiatric conditions. To file a claim on behalf of a claimant living with a disability, the settlement agreement requires proof of authority to ensure claims are being filed by those who have the legal authority to do so. However, many class members, being individuals with disabilities, cannot sign a power of attorney due to lack of capacity. The only other option proposed by the parties was to obtain guardianship orders, which many individuals and their caregivers are reluctant to do due to concerns about costs, time delays and the significant relinquishment of rights that comes with guardianships. This approach has led to some of the most vulnerable class members, those with capacity issues and who may have suffered abuses at CPRI, being unable to pursue their claims.

Can We Do Better?

Class actions are procedural tools that are designed to provide access to justice to the masses. Access to affordable litigation is only part of the story; access to justice in the context of class actions also concerns the attainability of just outcomes for individuals. An onerous and problematic claims process has the opposite effect, essentially acting as a barrier to access to justice for individual class members. It is vital that all those involved in these complex settlements – class counsel, defence lawyers, judges and claims administrators – reflect on what works, what does not work, and how to improve the settlement claims experience for all class members. Here are a few suggestions based on our experience at the Clinic:

  1. The operating paradigm should always be that processes are class member-centric. The convenience of the administrator should never be paramount. More importantly, the claims process must always be trauma-informed and culturally competent.
  1. No class action settlement should be approved unless fair rights of appeal to claimants are built in. Claims administrators are fallible, and there ought to be recourse to a simplified review process overseen by a judge. The more serious the claims, the more robust the appeal rights should be.
  1. To provide the oversight needed to ensure claims administrators adhere to claims protocols, the Court should order interim reports from claims administrators to verify that claims are being processed promptly and properly.
  1. Attention should always be focussed on class composition at the time of settlement design. Focus groups of class members, for example, could provide insight into potential pitfalls with a claims protocol.
  1. At the conclusion of a settlement distribution, class members could be surveyed for their views of the claims process.

The Class Action Clinic understands that navigating Class Actions and claims forms can be challenging. We provide claims assistance services free of charge to class members. If you or someone you know is seeking assistance in submitting a claim, we encourage you to reach out to us!

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