TL v Alberta (Director of Child Welfare), 2015 ABQB 815

Court of Queen ’ s Bench of Alberta Citation: TL v Alberta (Director of Child Welfare), 2015 ABQB 815 Date: 20151218 Docket: 0403 12898 Registry: Edmonton Between: T.L., J.S., and R.M. Plaintiffs - and - Her Majesty the Queen In Right of Alberta as Represented by the Director of Child Welfare and the Public Trustee Defendants _______________________________________________________ Reasons for Judgment of the Honourable Mr. Justice D.R.G. Thomas _______________________________________________________ Table of Contents I. Introduction . 2 II. Background . 2

III. Settlement Approval 4 IV. Is the settlement fair, reasonable, and in the best interests of the class? . 4 A. Likelihood of recovery . 4 B. Amount and nature of discovery evidence . 5 C. Settlement terms and conditions . 5 D. Recommendation and experience of counsel 5 E. Future expenses and likely duration of litigation . 5 F. Recommendation of neutral parties . 5 G. Number of objectors and nature of objections . 6 H. The presence of good faith and absence of collusion . 6 I.

Summary . 6 V. Fee and Honorarium Approval 6 VI. Conclusion . 7 I. Introduction [ 1 ] In this action under the Class Proceedings Act , SA 2003, c C-16.5 (the “Act”), the representative plaintiffs seek approval of a settlement reached with the defendants and approval of the fee arrangements. [ 2 ] At the end of a hearing on November 13, 2015, I pronounced my approval of the settlement agreement and the fee arrangements. I indicated that I would provide written reasons at a later date and these are the reasons. II.

Background [ 3 ] Since 1909, there have been a number of Alberta statutes providing for the protection of vulnerable children. Since at least 1925, legislation has provided that a government agent would become the legal guardian of children in need of protection. Over the decades, many children in Alberta were taken into the care of the child welfare system as permanent wards, under permanent or temporary guardianship orders, or under permanent guardianship agreements.

Some of these children were abused by their caregivers or other third parties while in the child welfare system. [ 4 ] This action was commenced on June 29, 2004 as Docket #0403 12898 (the “Action”). I certified it as a class proceeding on February 19, 2008 ( TL v Director of Child Welfare (Alta) , 2008 ABQB 114 , 436 AR 217 ( “TL#1”) , aff’d 2009 ABCA 182 , 457 AR 141 ( “TL#2 ”).

The three representative plaintiffs were named by me in TL#1 . [ 5 ] The representative plaintiffs have alleged that the defendants did not take all the necessary steps (1) to make an application under victims of crime legislation to obtain compensation, (2) to commence a civil action to recover compensation on their behalf for the abuse suffered, and (3) to advise the victims of their legal rights to make claims for compensation or their right to sue. [ 6 ] Following certification of this proceeding in TL#1 and confirmation of that certification in TL #2 by the Alberta Court of Appeal, the litigation continued for several years with extensive production of documents, multiple questioning sessions, etc.

The parties twice made unsuccessful attempts to reach a mediated settlement. Between January 2014 and July 2015, the parties continued to negotiate. They executed a memorandum of understanding in July 2015 and finalized a settlement agreement in October 2015. The highlights of the settlement are as follows: • As a precondition to making a claim, class members must first apply to the Alberta government for compensation under the Victims of Crime Act , RSA 2000, c V-3 (“VCA”), within a one-year period.

Successful applications made under this legislation will be paid out through the Victims of Crime Fund, not governed by this settlement proposal (VCA, s 9). • Where the government denies a victims-of-crime application solely for being made out of time pursuant to statutory limitations periods, a class member may apply to have his or her claim evaluated by a neutral adjudicator. The adjudicator will not deny any claim for reasons that a limitation period has expired.

Decisions made by the adjudicator will be final. • If the government denies a victims-of-crime application for reasons other than being out of time, the class member may not apply to have the claim adjudicated. • The defendants will pay up to $6.5 million towards permanent guardianship order claims and up to $1 million towards temporary guardianship order claims approved by the adjudicator.

[7] At a November 13, 2015 hearing, I heard submissions from class counsel and counsel for the defendants. I acknowledgedsubmissions from persons who identified themselves as class members and who either wanted to object to the approval of settlementagreement or otherwise comment on it. K.B. spoke in favour of the settlement in the course of addressing an adjournment application andasked that the approval hearing proceed. The other two individuals (L.S. and V.M.) sought adjournments of the hearing.

They wantedmore time to consider the terms of the settlement and to understand it. [8] Another individual sent an objection via email. That individual said the settlement was unfair and benefitted only thelawyers and the government. [9] Ultimately, I refused the adjournment request and it is not necessary to repeat my reasons for that ruling in this decision.They can be found in the transcript of the November 13, 2015, hearing which will be placed on the court file in this Action. III.

Settlement Approval [10] Section 35(4) of the Act provides that a settlement of a class proceeding is not binding unless approved by the Court and to doso, the Court must find that the settlement is fair, reasonable, and in the best interest of the class as a whole (Adrian v Canada (Ministerof Health), 2007 ABQB 376 at para 12, 418 AR 210, citing Dabbs v Sun Life Assurance Co of Canada (1998), (ON SC), 40 OR (3d) 429 (Ont Ct J (Gen Div)). [11] The settlement of class actions differs from most other civil suits in an important respect.

In a non-class action, any settlementreached between the parties will be binding only upon them. By contrast, any settlement in a class action will affect the rights of all classmembers without their explicit consent.

Hence, to protect these absent class members from being bound by unfair settlements, classsettlements should be viewed with some caution (Garry D Watson, “Settlement Approval: The Most Difficult and Problematic Area ofClass Action Practice” (Paper delivered at the NJI Conference on Class Actions, Toronto, 9 April 2008) [unpublished]). [12] In determining whether a settlement is fair, reasonable, and in the best interests of the class, the following factors may beconsidered: (1) likelihood of recovery, or likelihood of success; (2) amount and nature of discovery evidence; (3) settlement terms andconditions; (4) recommendation and experience of counsel; (5) future expense and likely duration of litigation; (6) recommendation ofneutral parties, if any; (7) number of objectors and nature of objections; and (8) the presence of good faith and the absence of collusion(Parsons v Canadian Red Cross Society (1999), 40 CPC (4th) 151 (Ont Sup Ct J)).

IV. Is the settlement fair, reasonable, and in the best interests ofthe class? A. Likelihood of recovery [13] The claimants here have alleged that the defendants had a duty to sue third party tortfeasors and to make claims under victims-of-crime legislation on behalf of the representative plaintiffs and class members as a result of personal injuries suffered by them beforeor when they were subject to the permanent wardship, temporary guardianship, or permanent guardianship. [14] As a result, the claimants allege that the class members lost certain rights, and they now seek to recover damages from thedefendants.

The thrust of the claim is that the representative plaintiffs and other members of the class suffered personal injuries whichwould have entitled them to damages, or would have entitled them to make claims under victims-of-crime legislation. [15] There is a substantial risk that many class members would be unable to establish that the defendants owed them a duty andlikewise failed to seek compensation on their behalf. Even if an individual plaintiff were able to establish these preconditions, statutes oflimitations would be major stumbling blocks for many potential claimants.

Slatter J, as he then was, enumerated the various limitationschallenges that claimants would face if these claims had they pursued them individually (TL v Alberta (Director of Child Welfare), 2006ABQB 104 at paras 49–55, 395 AR 327). [16] This settlement allows class members to make claims for compensation under Alberta’s victims of crime legislation andthrough a neutral adjudication process free of any limitation period restrictions, thereby paving the way for recovery where otherwisesuccess for the claimants would very likely be procedurally thwarted. B.

Amount and nature of discovery evidence [17] Class counsel engaged in extensive discovery (now known as questioning) of at least 13 witnesses produced on behalf of thedefendants. These included Crown representatives with or formerly employed in Alberta’s child welfare system, the Office of the Childand Youth Advocate, and the Office of the Public Trustee. C.

Settlement terms and conditions [18] The settlement is based upon claimants being given a one-year window during which they may make claims under thevictims of crime legislation without the ordinary burden of limitation periods which otherwise might stymie their efforts. The classcaptures those who suffered personal injuries while a minor as a result of a tort by a third party as far back as July 1, 1966. Thisexpansive time period is likely to capture the vast majority of potential claimants.

[19] The settlement contemplates funnelling claims for compensation through the Alberta victims of crime assistance program or,where a claim is evaluated by an adjudicator, then in accordance with the entitlement criteria specified in the VCA. This is consistentwith the principles which apply to the treatment of victims of crime including, inter alia, the following: • victims should promptly receive financial benefits for the injuries that they have suffered; • victims should be treated with courtesy, compassion and respect; and • all reasonable measures should be taken to minimize inconvenience to victims. D.

Recommendation and experience of counsel [20] Class counsel are experienced, qualified, and devoted to their clients. On that basis, their recommendation that the settlementis fair and reasonable is deserving of great weight. [21] Furthermore, the manner in which the settlement approval is sought—that is that the settlement is not conditional on theapproval of counsel fees—negates any suggestion that the recommendation of class counsel is self-serving. E. Future expenses and likely duration of litigation [22] The practical value of an expedited recovery is an important factor for consideration.

Aside from the legal and evidentiaryrisks, a settlement avoids the prospect of a case such as this one being litigated over many more years, including any potential appeals. Inote that it has taken over 10 years from the commencement of this Action to reach resolution through the proposed settlement. F. Recommendation of neutral parties [23] The parties twice attempted to mediate a settlement.

Both of the mediators are very experienced and respected former jurists.Although the parties were not successful in their attempts at mediation, their sincere efforts at resolving the dispute in this manner is afactor to be noted on this approval application G. Number of objectors and nature of objections [24] The views of putative class members are entitled to great weight (Ford v F Hoffmann-La Roche Ltd (2005), (ON SC), 74 OR (3d) 758 at para 179 (Ont SCJ)). One of the reasons for this is that class members have not been present at thenegotiating table.

This may very well be the only opportunity for the Court to take note of their views on the settlement proposal. [25] In this Action, the parties estimate that there are approximately 6,500 class members who suffered personal injury captured bythe settlement. Class counsel solicited feedback on the proposed settlement and received six written objections.

There are two mainthemes running through these objections: (1) the proposed settlement of the underlying claim does not go far enough to address andresolve other alleged negligent acts and systemic deficiencies of the Alberta child welfare system; and (2) the proposed settlement willnot provide adequate compensation for the harms suffered. [26] I am sensitive to the fact that these objectors have likely suffered greatly as a result of the harms inflicted upon them while inthe child welfare system.

They were vulnerable individuals made more vulnerable by the wrongs committed by those entrusted with theircare. [27] I sympathize with their interest in seeking compensation outside of this class proceeding which, in their opinion, might betterreflect the harm they suffered. On the other hand, I note that a settlement need not be perfect nor the best for every class member(Northwest v Canada (AG), 2006 ABQB 902 at para 24, 45 CPC (6th) 171).

Rather, it is the product of negotiations and compromises.The low number of objections received is an indication that the parties have made compromises which, in the end, are in the best interestof the class as a whole. H. The presence of good faith and absence of collusion [28] The parties in this case are clearly adverse in interest. However, as a result of negotiations and compromise, a settlement wasreached. I have not seen any evidence of collusion. I.

Summary [29] Having regard to the factors set out above and weighing all of them in the balance, I find that the outcome of this classproceeding is fair, reasonable, and in the best interests of the class members and the proposed settlement is approved. V. Fee and Honorarium Approval [30] Turning to class counsel’s fee request, the fairness and reasonableness of the fee awarded in respect of the class proceeding isto be determined in light of the risk undertaken by the lawyers in conducting the litigation and the degree of success or result achieved. [31] Factors relevant in assessing the reasonableness of the fees of class counsel include: (

a) the factual and legal complexities of

the matters dealt with; (

b) the risk undertaken, including the risk that the matter might not be certified; (

c) the degree of responsibility assumed by class counsel; (

d) the monetary value of the matters in issue; (

e) the importance of the matter to the class; (

f) the degree of skill and competence demonstrated by class counsel; (

g) the results achieved; (

h) the ability of the class to pay; (

i) the expectations of the class as to the amount of the fees, and; (

j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement ( Smith Estate v National Money Mart Co , 2010 ONSC 1334 at para 24 , 94 CPC (6th) 126, rev’d on other grounds 2011 ONCA 233 , 106 OR (3d) 37). [ 32 ] Class counsel have represented members of the class without compensation and on a contingency basis. They accepted the responsibility to pay all expenses associated with the litigation.

They have undertaken extensive work during the course of bringing this Action: research; expert consultation; communication with class members; conducting questioning sessions and reviewing produced materials; attending various hearings; negotiation and mediation; and advancing motions for approval of the settlement. [ 33 ] Class counsel seeks fees of $750,000 in costs for work, unpaid taxable disbursements, interest, and taxes.

They will also be paid fees in the amount of 10% of the amount paid to a class member pursuant to a victims of crime application, and 33.33% of the amount paid to each class member pursuant to a determination by the adjudicator. [ 34 ] In my opinion, class counsel’s fee request is reasonable and fair and should be approved as requested. [ 35 ] Class counsel also seek honorarium payments of between $5,000 and $15,000 for each of the three representative plaintiffs, to be paid out of class counsel fees. These amounts are appropriate.

The representative plaintiffs committed a significant amount of time to directing and participating in this litigation. They have also experienced significant personal hardship or inconvenience in connection with the prosecution of the litigation, considering the very emotional and personal nature of the claims they have brought forward on behalf of all class members. The honoraria recognizes the meaningful contribution that they have made to the pursuit of access to justice by the class members. VI.

Conclusion [ 36 ] The applications for approval of the settlement, the proposed fees and the honorarium are approved. Heard on the 13 th day of November, 2015. Dated at the City of Edmonton, Alberta this 18 th day of December, 2015. D.R.G. Thomas J.C.Q.B.A. Appearances: M.J. Peerless / W. Jenkins McKenzie Lake Lawyers LLP for the Applicants G.A. Meikle, Q.C. / W. K. Branch / P.G. Barber Her Majesty the Queen for the Director of Child Welfare D. N. Jardine

for the Public Trustee L.S., V.M., K.B. Individual submissions