By Elizabeth Yan, 2L
A class action settlement is approved by the court when it is determined to be fair, reasonable, and in the best interests of the entire class. Key considerations for settlement approvals include looking at whether an agreement sufficiently compensates for the relinquishment of each individual class member’s litigation rights and whether the administration of a distribution plan will be fair and timely. Disputes can arise, however, in the course of the administration of the settlement, that pit individual class members against not only the administrator, but also the defendant and even class counsel. How does a court ensure class members are treated fairly in the context of this power imbalance, after a settlement approval process that is characterized by an inherent adversarial void? And how can a court utilize its residual supervisory power to enhance overall access to justice? An upcoming appeal at the Federal Court of Appeal will test the court’s ability to protect the interests of class members post-settlement. The McLean decision stemmed from motions made by class members, Ms. Waldron and Mr. Pooyak, challenging the Claims Administrator’s (Deloitte’s) decision, to reject amended claim forms under the Federal Indian Day School Settlement Agreement (“IDSSA”). Ms. Waldron and Mr. Pooyak are but two class members amongst the 150,000 class members who have made a claim in the Day Schools settlement. Both class counsel and the defendant supported the Administrator’s decision to reject revised claim forms. Phelan J. found that the parties intended only one claim form per claimant within the context and text of what he viewed was a private contractual arrangement. He also found that there were no gaps within the IDSSA that permitted what he called “progressive disclosure”. He noted that the exclusion of progressive disclosure in the IDSSA was meant to minimize re-traumatization.
Not surprisingly, Ms. Waldron has appealed Phelan J’s decision. Last month, a number of organizations, including the Class Action Clinic, sought leave to intervene in the as-yet unscheduled appeal. From the Clinic’s perspective, the appeal raises important questions beyond the interests of Ms. Waldron. What does it mean to implement an administrative procedure that seeks to “minimize re-traumatization”? What is “progressive disclosure”? And when should principles of fairness take precedence over administrative efficiency?
Background: Administrator Decides Own Procedure
The IDSSA is a five-tiered claims process that opened on January 13, 2020. Level one ($10,000) covers physical or verbal harm or abuse. Levels two ($50,000), three ($100,000), and four ($150,000) covers one or more incidents of sexual abuse/harm of varying degrees or physical abuse/assault that causes either temporary but serious harm (level two) or long-term/permanent harm (level three to four). Level five ($200,000) is defined by repeated sexual or physical harm which causes long-term/permanent harm.
In the first six months of the claims period, Deloitte accepted revisions to claims applications. The Administrator later cited the difficulties of claims administration in the midst of the pandemic as justification for a “temporary variation” to the claims procedure. In late May, however, Deloitte changed its position and informed class counsel that it would only accept updates to claims up to June 15, 2020, and only if the claim had not yet been fully settled by payment or adjudication prior to that date. A notice to this effect was posted on the IDSSA website. Ms. Waldron’s and Mr. Pooyak’s claim did not fall within this group of claimants because their updated applications, which outlined a higher level of claim eligibility and harm suffered, were prepared after the June 15, 2020 deadline.
Phelan J. found that because the word application or “Claim” was used in the singular in the IDSSA, the plain meaning of the agreement was that only one claim was intended. He also found that the parties did not intend to repeat the procedure in Indian Residential Schools which had allowed “progressive disclosure”. Even though the Agreement provided that “[a]ll reasonable and favourable inferences that can be drawn of a claimant are to be drawn and doubt is to be resolved in favour of a claimant”, Phelan J. stated that allowing class members to file amended claims would be akin to “insert[ing] a term of ‘progressive disclosure’” and to rewrite terms agreed to in the settlement agreement, which the Court does not have the power to do.
Although the Claims Administrator had not obtained Court approval for previously accepting revised claims, Phelan J. indicated that the “Court likely would have provided” such an approval if requested. According to the decision, those class members who filed revisions before June 15, 2020 had received something of a windfall: “some Claimants may have received the benefit of progressive disclosure to which they were not normally entitled”.
On appeal, Ms. Waldron will argue that the Motion Judge erred in his interpretation of IDSSA and that all class members should be entitled to apply for higher levels of compensation if they have the evidence to support their claims. The Federal Court of Appeal will be asked to determine several issues, including: whether the Motion Judge does or does not have jurisdiction to make a declaration on behalf of the class; whether class members, such as Ms. Waldron and Mr. Pooyak, who are not representative plaintiffs do or do not have standing to seek a declaration on behalf of the class; and whether excluding progressive disclosure in the IDSSA interpretation was a palpable and overriding error by the judge.
The Clinic’s proposed intervention in the Waldron case
On September 20, 2022, the Clinic filed a notice of motion for leave to intervene in this appeal based on its expertise and understanding of the class member experience. The mandate of the Clinic is to support and advance class member rights in a trauma-informed manner. In our experience with class members in the post-settlement context, it is often the case that individual class members facing difficulties with the Administrator cannot rely on class counsel to advance the class member’s interest. Thus, such class members effectively rely on the courts to safeguard their interests. The Clinic sought to assist the court in this crucial role and to help level the playing field between the lone appellant and the three responding parties.
Under the Federal Court Rules, the Court has discretion to grant leave to any person to intervene. The test for intervention in Rothmans (and affirmed in both Sport Maska and Prophet River) lists six non-exhaustive factors (with the weight of each determined by the Court):
a. Is the proposed intervener directly affected by the outcome?
b. Does there exist a justiciable issue and a veritable public interest?
c. Is there an apparent lack of any other reasonable or efficient means to submit the question to the Court?
d. Is the position of the proposed intervener adequately defended by one of the parties to the case?
e. Are the interests of justice better served by the intervention of the proposed third party?
f. Can the Court hear and decide the case on its merits without the proposed intervener?
The flexibility inherent in the above test is also described in the Pictou factors, which includes considerations such as whether intervention is in “the interests of justice”; whether the proposed intervener has a “genuine interest in the matter” and “advance[s] different and valuable insights and perspectives that will actually further the Court’s determination of the matter”; and whether evidence provided by the proposed intervener is “detailed and well-particularized”. The intervener test is a flexible one that does not strictly require a party to only be “directly affected” in order to meet the test for intervention. The Clinic’s “genuine interest” in the appeal is the core focus of the assessment for intervention.
The Clinic’s main interest in the McLean appeal is to emphasize the central role of the supervisory judge in guarding class members’ interests to ensure the objective of access to justice is met. The role of the judge is especially important when the named parties to the class action fail to directly raise implementation concerns or actively oppose a procedurally and substantively fair procedure in favour of an efficient one. Moreover, when a settlement agreement purports to minimize the risk of retraumatization, it is an error to interpret that agreement in a manner that manifestly causes trauma.
On November 4, 2022, the Clinic’s motion was dismissed. Both class counsel and the defendant had opposed the Clinic’s intervention, and the motions judge found that the Clinic’s arguments addressing the interpretation and implementation of settlement agreements would be addressed by the two unopposed interveners, the Assembly of First Nations and the Federation of Sovereign First Nations.
The Class Action Clinic understands the difficulties that can arise when navigating the claims process in class actions. The Clinic is committed to providing assistance and information to class members, free of charge. If you are seeking assistance on how to navigate a class action as a class member, please reach out to the Clinic to find out how we may be able to assist.