Percival v. Canada

Percival v. Canada
Court (s) Database
Federal Court Decisions
Date
2024-12-27
Neutral citation
2024 FC 2098
File numbers
T-1417-18
Decision Content
Date: 20241227
Docket: T-1417-18
Citation: 2024 FC 2098
Ottawa, Ontario, December 27, 2024
PRESENT: The Honourable Mr. Justice Pamel
CERTIFIED CLASS PROCEEDING
BETWEEN:
REGINALD PERCIVAL, ALLAN MEDRICK MCKAY, IONA TEENA MCKAY AND LORNA WATTS
Plaintiffs
and
HIS MAJESTY THE KING
Defendant
ORDER AND REASONS
I. Overview [1] On May 30, 2024, I issued my reasons for approving the settlement agreement [Settlement Agreement] regarding the underlying class proceeding [the underlying action] in relation to the Indian Boarding Home Program [the Program]. Section 11.01 of the Settlement Agreement provides that an amount determined by the Court, independent of the settlement fund, will be paid to Class Counsel and Quebec Subclass Counsel [collectively Counsel]. The provision states:
A. Class Counsel and Quebec Subclass Counsel Fees
(1) Canada agrees to pay Class Counsel and Quebec Subclass Counsel collectively the amount the Court determines is fair and reasonable in respect of legal fees and disbursements for their past and future work on behalf of the class as a whole (“Class Counsel Fees”). Canada will pay this amount as directed in writing by Klein Lawyers LLP and Dionne Schulze SENC within the latest of: a) the Implementation Date; b) thirty (30) days after the date on which the Court makes its order as to Class Counsel Fees; c) thirty (30) days after the date of the final determination of any appeal brought in relation to the Class Counsel Fee order.
(2) No part of the Class Counsel Fee will be paid by Class Members and there will be no reduction in any amount payable to a Class Member to pay for Class Counsel Fees.
(3) Class Counsel and Quebec Subclass Counsel will jointly bring a motion for approval of a Class Counsel Fee. Canada will have the right to make responding submissions.
(4) If the Court approves this Agreement, the provisions of this Agreement will come into effect on the Implementation Date regardless of the date on which an order is made or appeal determined regarding Class Counsel Fees.
(5) Class Counsel and Quebec Subclass Counsel will continue to provide services for the benefit of the class after the Implementation Date on all matters related to the implementation and administration of this Settlement Agreement, including providing information and advice to class members, persons or organizations that serve class members, the media, and members of the public. No further or other Class Counsel Fee will be paid for those services. Individual fees, as provided for in Section 11.02, may be paid to Class Counsel or Quebec Subclass Counsel for assisting Claimants with the preparation of their individual claims.
[Emphasis added.]
[2] The applicants now make a motion under Rule 334.4 of the Federal Courts Rules, SOR/98-106 [Rules], for an order approving Class Counsel Fees in the amount of $50 million plus applicable taxes, and for $174,818.39 in disbursements; the motion also seeks an award of honoraria of $10,000 to each of the Representative Plaintiffs Reginald Percival, Allan Medrick McKay, Iona Teena McKay and Lorna Watts, and the Quebec Subclass Representative Annie Irene Trapper Weistche, payable from Class Counsel Fees.
[3] Prior to the hearing, the Attorney General of Canada [AGC] advised that his instructions were to take no position on the amount of legal fees sought by Counsel and to defer to this Court as to whether the amount being sought is fair and reasonable. As a result, I appointed Ms. Donnaree Nygard of Vancouver, B.C. as amicus curiae [the amicus] to assist me and to provide such written and oral submissions as were, in her opinion, objective, appropriate, and helpful to the Court, save for the issue of the payment of the honoraria, which I determined not to be necessary for her to address. The AGC made no representations during the hearing, save as to commenting on one of the aspects of the applicants’ submissions regarding the element of risk undertaken by Counsel—more on this issue below.
[4] Having considered the matter, and for the reasons that follow, I find the amount of $32.5 million to be fair and reasonable as Class Counsel Fees, along with the disbursements requested, and approve that an honorarium in the amount of $10,000 to be paid to the Representative Plaintiffs and Quebec Subclass Representative from Class Counsel Fees.
II. Background [5] My reasons for approving the Settlement Agreement included an overview of the Program, the history of the litigation, which culminated with the settlement that I had approved, and echoed the lived experiences of boarding home survivors reflected in the stories of those who were courageous enough to come forward in these proceedings to tell their stories. Consequently, I need not go into detail with respect to the nature of the matter, and will limit my comments to what is essential for the disposition of the present motion.
[6] At the commencement of the hearing on the present motion, I had the benefit of hearing again from Dr. Matthew Coon Come, who reminded us of the devastating impact of Canada’s misguided child welfare policies targeting indigenous children, and how it took years of litigation for Canada to acknowledge such an impact and find a way forward through the various settlements agreements and initiatives that followed on the path to reconciliation. He also wished to honour and express gratitude to Reginald Percival, a Representative Plaintiff and to Kenneth Weistche, who acted as Quebec Subclass Representative—to be subsequently replaced by his wife Annie Irene Trapper Weistche following his passing—for their tireless advocacy in seeking a just and fair settlement for the aboriginal children who were placed in the Program yet who were not included under the earlier Indian Residential Schools Settlement Agreement [IRSSA] in respect of Indigenous children who attend church-run residential schools [Indian Residential Schools] (Baxter v Canada, 2006 CanLII 41673 (ON SC); Quatell v Attorney General of Canada, 2006 BCSC 1840; Northwest v Canada (Attorney General), 2006 ABQB 902).
[7] Boarding home survivors would also not be included in the subsequent settlement agreements regarding Indigenous children taken from their homes, families and communities throughout the 1960s, and subsequently adopted by predominantly non-Indigenous, middle-class families across the United States and Canada [Sixties Scoop] (Riddle v Canada, 2018 FC 641 [Riddle]); or forced to attend an Indian Day School run by the federal government [Day Schools] (McLean v Canada, 2019 FC 1075 [McLean]) or children who attended residential schools during the day but were able to go home at night [Day Scholars] (Tk'emlúps te Secwépemc First Nation v Canada, 2021 FC 988; Tk'emlúps te Secwépemc First Nation v Canada, 2023 FC 327 [Gottfriedson]. In fact, children who were part of the Program were described as the “marginalized group within a marginalized group” (Fontaine v Canada (Attorney General), 2014 BCSC 941 at para 61).
III. Analysis [8] This case appears to be the first time that Canada has agreed to pay counsel fees without affecting compensation, where the amount was not negotiated—either in part, within a certain range, or up to a cap—as part of a settlement agreement. Instead, Canada has agreed to pay Class Counsel Fees that the Court determines are fair and reasonable, but takes no position on what that amount should be.
[9] As the parties have agreed that Class Counsel Fees are to be paid independently from any recovery by the Class members, the issue was raised regarding the application of Rule 334.4 and the jurisdiction of the Court in the assessment of counsel fees. Clearly, the Settlement Agreement calls for this Court to determine counsel fees. Although generally parties cannot by agreement grant to this Court jurisdiction which it does not otherwise have by statute (Canada v Peigan, 2016 FCA 133 at para 85), and that this Court has tended to apply Rule 334.4 even where counsel fees have not been payable from the proceeds of the settlement award (Moushoom v Canada (Attorney General), 2023 FC 1739 [Moushoom] at paras 78–80; Tk'emlúps te Secwépemc First Nation v Canada, 2023 FC 357 at paras 13 and 21; McLean v Canada, 2019 FC 1077 at para 2), I find that the Court’s authority to approve counsel fees in this context nonetheless emanate from its inherent jurisdiction to approve settlement agreements expressed in Rule 334.29 (McLean v Canada (Attorney General), 2023 FC 1093 at para 39; Canada (Attorney General) v Fontaine, 2017 SCC 47 at para 32; Lavier v My Travel Canada Holidays Inc, 2013 ONCA 92 at paras 23–25; Northwest v Canada (Attorney General), 2006 ABQB 902 at paras 49–59).
[10] Also, the fact that the Settlement Agreement calls for Class Counsel Fees to be paid independently of any recovery by the Class members does not, in my view, diminish the robustness of the analysis to be undertaken by the Court in the determination of what is fair and reasonable under the circumstances. Here, the fact that Class Counsel Fees have not been negotiated—a factor to be considered by the Court (Moushoom at para 109)—and that funds for the payment of Class Counsel Fees are coming from the public purse, weigh in favour of the Court not taking a hands-off approach in its analysis.
[11] With that in mind, and as stated by Justice Aylen in Moushoom, at paragraph 82, “[t]he overarching test applicable to class counsel fees is that they have to be “fair and reasonable in all of the circumstances”. To determine what is “fair and reasonable”, the Federal Court will look at a host of non-exhaustive factors (Manuge v Canada, 2013 FC 341 at para 28; Merlo v Canada, 2017 FC 533 at paras 78–98; Condon v Canada, 2018 FC 522 [Condon] at paras 81–82; Moushoom at para 83) including:
i. The risk undertaken;
ii. Results achieved by counsel;
iii. Time expended;
iv. Complexity of the issue;
v. Importance of the litigation to the plaintiffs;
vi. The degree of responsibility assumed by counsel;
vii. The quality and skill of counsel;
vii. The ability of the class to pay;
ix. The expectation of the class; and
x. Fees in similar cases.
[12] Although the weight given to each factor will vary according to the particular circumstances of the class action, this Court has noted that the risk assumed by Counsel and the results achieved are the two most important factors to consider in these motions (Condon at para 83; Moushoom at para 84). I would also echo the words of Justice Aylen when she stated that, in addition, mega-fund settlements, as is the case here, raise unique considerations, and in assessing what is fair and reasonable in the context of a mega-fund settlement, “the traditional approach used by the Court to assess counsel fees proves somewhat unsatisfactory” (Moushoom at para 95). The applicants assert that this Court, in Moushoom, highlighted different factors specific to the circumstances of that case, where there was a confluence of the highest settlement amount on a pure dollar value basis for mega-fund settlements, alongside a relatively low risk given the relevant Canada Human Rights Tribunal [the Tribunal] decision that had been issued. From my perspective, those factors are just as much relevant in this case.
[13] Also, in considering what is fair and reasonable in circumstances where the counsel fee is not paid out of the class recovery, the Court should consider the issue from the perspective of Counsel, the class members, the defendants and the public interest (McCrea v Canada, 2019 FC 122 at para 108).
A. The Application of the Law to this Case (1) Risks Undertaken [14] The element of risk is often intertwined with the element of complexity; in fact here, the applicants have tethered the element of risk to the element of complexity. In addition, there is no issue that Counsel were incurring risk when agreeing to take on the underlying action; rather, the issue is the level of risk, in particular as that element of risk plays into my determination of what is fair and reasonable in respect of Class Counsel Fees.
[15] When addressing the element of risk, courts generally look to all the risks faced by class counsel, such as the liability risk, recovery risk, and the risk that the action will not be certified as a class action, measured from the commencement of the action and as the litigation evolves, but not with the benefit of hindsight when the result looks inevitable (Moushoom at para 85). The litigation risk assumed by class counsel is a function of the probability of success, the complexity of the proceedings and the time and resources expended to pursue the litigation. Here, the applicants have raised the following risks that Counsel faced when taking on this matter:
a) The risk the action would not be certified due to the number of individual issues;
b The risk the action would not be certified due the factual matrix that extends back 70 years, and a class definition that covers four decades and includes individuals in every province and territory;
c) The risk the action would not be certified because establishing Canada’s vicarious liability for abuse carried out by private parties in private homes could be viewed as very far-fetched;
d) If the case had gone to litigation, the burden would have been on the individual claimants to establish that the program was still under Canada’s control at the time that the abuse occurred, and for many class members, that would have been near impossible due to lack of documentation.
e) The risk the trial would be unmanageable because of the extensive class period and geographically diverse class membership;
f) Challenges at trial in dealing with shifting standards and evolving government priorities over a long class period;
g) Challenges at trial at dealing with novel claims. The claim for loss of culture was and remains novel;
h) Canada would have defences available to it at trial, including expiry of limitation periods which might drastically reduce the size of the class;
i) There was political uncertainty, particularly since it was a minority government, there was a risk of change in government;
j) Even if the case was successful at the common issues stage, individual class members may not have been successful in proving causation and damages at the individual issues stage. Risks include potential limitations issues, the loss of evidence and the lack of reporting generally associated with the abuse suffered by class members.
[16] I appreciate that there are a number of issues that counsel often assess when considering whether to take on a case such as this one, however in the end, the risk that the Court is assessing is generally considered to be the risk of non-payment that such counsel is taking on in carrying the file; that risk is very much tied to the claim that is being made and the legal arguments counsel are looking to make, and whether those arguments will win the day. To appreciate the level of risk, we must view the matter in context.
[17] As I set out in my reasons for approving the Settlement Agreement, litigation on behalf of boarding home survivors began in Quebec when Indian Residential School survivors seeking compensation under the IRSSA were being denied on the basis that they did not actually attend a residential school but rather a public school while billeted with private families. In September 2016, Quebec Subclass Counsel filed an application for a class action in Quebec on behalf of a person now known as Anne Smith, and other boarding school survivors (the Quebec Class Action) for compensation for having suffered sexual, physical or psychological abuse in connection with or arising from being placed in boarding homes.
[18] One of the major obstacles facing Quebec Subclass Counsel was how to establish the vicarious liability of Canada in the context where the abuse, if any, was perpetrated in private homes by private individuals who were not employees or agents of Canada. Until then, the principle of vicarious liability under article 1463 of the Civil Code of Québec had never been applied to a federal program such as boarding homes. While Canada had accepted it was vicariously liable for the Indian Residential Schools (see Blackwater v Plint, 2003 BCCA 671 at para 56), they operated under a clearer statutory framework and their staff were directly employed by Canada for at least part of their history; the boarding home families, on the other hand, appeared to be independent contractors, thus evidence of direct negligence in Canada’s placement and supervision may well have been required to establish liability, or of a relationship between those families and Canada sufficiently close in order to establish vicarious liability.
[19] The other issue was that of time bar or prescription. As such, and although there continued to exist concerns as regards whether the cause of action pleaded was viable, Quebec Subclass Counsel nonetheless instituted the Quebec Class Action in order to preserve prescription. Also, with the expansiveness of the Program not well known at the time, the Quebec Class Action was initially filed only in respect of one community in Quebec. As information became available, the proceedings were amended in May 2017 to include a second community.
[20] In the meantime, Reginald Percival, one of the Representative Plaintiffs in this matter, had also been advocating for boarding home survivors since 2006, when the IRSSA was announced, and was looking for counsel in British Columbia to take on the cause. Initially Mr. Percival had difficulty retaining counsel, likely because, as suggested by Class Counsel during the settlement approval hearing, neither the plight of boarding home survivors nor the size of potential class membership were widely known within the greater legal community, and because the nature of the claim was still being viewed by the legal community through the prism of vicarious liability of Canada for the faults of the boarding home families (similar to how Quebec Subclass Counsel was asserting the Quebec Class Action at the time).
[21] This all changed when Mr. Percival walked into the office of Class Counsel in February 2018; however, the years leading up to that fateful day were significant.
[22] Implementation of the IRSSA began in 2007, however, as stated, not all students who attended residential schools were included. The Day Scholars class action was instituted in 2012, the same year Anne Smith filed her claim within the IRSSA, eventually, as already mentioned, to be rejected as outside the scope of IRSSA because the abuse she suffered occurred at the boarding home where she was staying, and not at her residential school. Meanwhile, one of the elements of the IRSSA was the establishment of the Truth and Reconciliation Commission [TRC] to facilitate reconciliation among the students, families and communities affected by the terrible legacy of Indian Residential Schools and all Canadians. The TRC released its final report in December 2015, with Canada already on the path to reconciliation.
[23] In 2016, the Day Schools and Sixties Scoop legal proceedings were instituted. Initially, the actions in Day Scholars, Day Schools and Sixties Scoop were vigorously defended by Canada. The Day Scholars litigation stretched over almost 10 years, with contested certification; the claims asserted were novel, the evidence historic and voluminous, and there were a number of interlocutory motion including stay applications and appeals. As stated by Justice McDonald:
This was risky litigation and success was far from certain as it involved novel legal claims in seeking damages for loss of language and culture. Canada vigorously defended this class proceeding and raised a number of defences including limitation defences, the IRSSA releases, and denying any duty of care on the part of Canada.
(Tk'emlúps te Secwepemc First Nation v Canada, 2021 FC 1020 at para 19).
In fact, the individual class litigation was settled only a few months prior to a scheduled 74‑day common issues trial, and the Band reparation matter had its common issues trial adjourned on the first day of a scheduled 10‑week trial.
[24] The initial class counsel in the Day Schools litigation went bankrupt in 2012 under the weight of three years of litigation, and no other firm was prepared to undertake the case due to the complexity and risk. However, four years later, in 2016, after the involvement of new counsel, Canada agreed to consent certification and the matter moved to settlement discussions soon thereafter.
[25] The Sixties Scoop litigation involved more than eight years of contested certification within 23 separate class proceedings across the country, motions and appeals, as well as a risky summary judgment motion on liability before the posture of Canada shifted with its announcement in February 2017 to proceed with mediation regarding all actions across the country. I should mention that the summary judgment application on the merits determined that that Canada indeed had a duty, which it had breached, to take reasonable steps to ensure that the children did not lose their indigenous identity (Brown v Canada (Attorney General), 2017 ONSC 251 [Brown] at para 85).
[26] On September 21, 2017, Prime Minister Justin Trudeau addressed the 72th Session of the United Nations General Assembly; in what Justice Shore in Riddle described as “a historic first”, the Prime Minister apologized for “Canada’s most shameful abuse perpetrated”, and specified the devastating legacy of the treatment of the Indigenous population by Canada. Less than a month later, the settlement-in-principle in the Sixties Scoop was announced.
[27] At the hearing on the present motion, Mr. Percival spoke; among many things, he mentioned that it was only when he met with Class Counsel did he finally believe that he and the boarding home survivors were being heard. I can certainly see why. By the time Class Counsel agreed, in April 2018, to accept the retainer from Mr. Percival on behalf of boarding home survivors and their families, Class Counsel was just concluding the settlement approval in the Sixties Scoop—what Justice Shore described in the very first paragraph as “historically unique” litigation which was “inherently fraught with risk” as counsel were advancing claims which, for the first time, addressed the issue of “loss of cultural identity”. Class Counsel were also, at that time, in the final stages of having the settlement in Day Schools approved (McLean v Canada, 2019 FC 1077); as Justice Phelan stated in that case, at paragraph 28: “This was always a risky case.”
[28] Here, the cause of action of loss of language, culture, and identity was no longer novel when Mr. Percival walked into the offices of Class Counsel. I accept that there was no formal case that explicitly recognized this cause of action on the merits, however the decision in Brown had been issued, and the cause of action was at that point being accepted by Canada as a basis for a settlement, as confirmed by the settlement in Sixties Scoop. As I stated in my reasons for approving the Settlement Agreement, my sense from hearing Counsel during the settlement approval hearing was that by the time the underlying action was instituted in July 2018, the winds favoured settlement by Canada of Indigenous child education policy—related litigation, as long as the evidence showed there to be a case to be made.
[29] As I mention in paragraphs 11 to 15 of my said reasons, following the institution of the underlying action, Canada requested time to investigate the allegations being made; a pause in the litigation was ordered within months thereafter, with further research, dialogue and exchanges of information going both ways. After the institution of the underlying action, Class Counsel trained staff on how to handle claim member inquiries, established a webpage, prepared questionnaires, retained and worked with experts, and continued to work on the certification record which was delivered to Canada in October 2018; the court ordered pause in the proceedings followed shortly thereafter. In December 2018, document discovery from Canada began, mostly with archival records from government libraries on the Program over time and across regions. The parties met in Vancouver in February 2019 to seek to narrow issues. The meeting was successful and two months later, in April 2019, Canada advised that it was prepared to consent to class certification and on which terms. Thereafter, the consent certification record was prepared and the consent certification order was obtained in June 2019.
[30] The applicants argue that the level of risk facing Class Counsel at the commencement of the underlying class proceeding was similar to the level of risk taken on by class counsel in Residential Schools, Day Scholars, Day Schools and Sixties Scoop; I cannot agree. As stated, by the time they accepted to represent boarding home survivors in April 2018, with the retainer agreement executed a month later, Class Counsel appreciated the newly developing cause of action of loss of language, culture, heritage and identity, and felt that a class action on the basis of the history of the boarding home survivors might be viable, although admittedly challenges remained.
[31] For its part, although Quebec Subclass Counsel were initially concerned, as early as 2016, with not being able to establish vicarious liability of Canada for the actions of the boarding homes families, it seems to me that concerns over establishing that cause of action took a backseat to the newly developing cause of action of loss of language, culture, heritage and identity when Class Counsel and Quebec Subclass Counsel spoke in September 2018 leading up to the second amendment to the Quebec Class Action and the delivery by Class Counsel of certification record to Canada the next month; as stated, it is evident from the decisions in Day Schools, Day Scholars, and the Sixties Scoop that this issue was no longer considered novel and had become a basis for settlements in which Canada was willing to provide compensation. The $25,000 payment in Sixties Scoop was specifically to compensate for loss of language and culture, so that cause of action was not novel as regards what Canada was willing to compensate.
[32] As regards the risky nature of the cause of action of vicarious liability, for the purposes of the present motion, the applicants framed it in the context of the fault of the boarding home families, i.e., that Canada’s vicarious liability would flow from the abuse undertaken by the families towards the boarding home survivors. I appreciate that this may have been the way the issue was framed in the Quebec Class Action. However, after the applicants had completed their oral submissions, counsel for the AGC stood to address that issue; the AGC asserted very clearly that despite the seeming emphasis by the applicants of the risks inherent in moving forward with litigation driven by an argument of vicarious liability within this context, Canada had always understood that the underlying claim was actually being advanced and driven to settlement on the basis of negligence on the part of Canada in running the Program.
[33] In fact, the Statement of Claims alleges Canada having breached its “duty to protect and preserve the culture and identity of the Indigenous children” and its “duty to prevent injury to Indigenous children and to ensure their mental and physical health and well-being.” In addition, the Statement of Claim states, at paragraph 8: “Canada’s conduct and the conduct of its servants in establishing, implementing, administering and managing the Boarding Home Program for Indian Students caused extreme and ongoing harm to the Plaintiffs and other class members.” [Emphasis added.]
[34] Clearly, as confirmed by the AGC, the vicarious liability that is being asserted in the pleadings relates not to the fault of the boarding home parents, but to the alleged negligence of Canada’s staff in conducting the Program; Canada had never understood the claim to relate to its possible liability for the conduct of the boarding home families. The only paragraph where the vicarious liability of Canada is alleged in the Statement of Claim is paragraph 20, but it is certainly not clear that the plaintiffs are referring to the boarding home families as being the source of Canada’s vicariously liable. In fact nowhere does the Statement of Claim specifically assert that that Canada was vicariously liable for the individuals operating the boarding homes. In fact, nothing in the certified questions relates specifically to the possible vicarious liability of Canada for the faults of the boarding home families. As such, it seems to me that although the notion of vicarious liability was a driver in the advancement of the claims, the notion of vicarious liability related to the role Canada and its staff played in the running of the Program, not the more precarious notion of vicarious liability for the faults committed by the boarding home families.
[35] I accept that the underlying action—distinct from the early stages of the Quebec Class Action and prior to Counsel agreeing to working together—had always been about the abuse suffered by the Indigenous children, as seen from the Category 2 settlement grid; however, I do not think it fair to say that the road towards establishing the liability of Canada ever seriously went through the gates of vicarious liability for the fault of boarding home families, despite the emphasis put on this cause of action by the applicants during the hearing before me. It may be that such emphasis was for reasons specific to the motion now before me.
[36] In any event, by April 2018, the direction Canada was taking indicated that the issue of loss of language and culture was likely sufficient, subject, of course, to the parties better understanding the history of the Program and the involvement of Canada in the administration of the Program, as the plight of the boarding home survivors was still not widely known. In fact, as mentioned by Class Counsel during the settlement approval hearing before me, a big part of the underlying class proceeding was about the separation from the community, the loss of language, culture, identity, and until the Sixties Scoop case—which was largely about loss of language, culture and heritage—that cause of action was not generally viewed as a viable claim.
[37] The evidence lays out the work undertaken by Class Counsel in meeting with boarding home survivors and continuing to work with experts—with the pandemic disrupting work on the file, in particular the completion of documentary production—however, what seems clear is that at no time was a vigorous adversarial posture taken by Canada. Within seven months of the institution of the underlying class proceedings, in February 2019, the parties met to seek to narrow the issues. The meeting was successful and in April 2019, Canada advised that it was prepared to consent to certification. That is not to say that, by the time the parties proceeded with consent certification in June 2019, Canada was ready to settle—far from it—but the concerns at the time revolved around more fully understanding the contours of the Program which eventually allowed the parties to come to a common position on defining the issues. Coming out of the pandemic—which, of course, slowed down research efforts—I think it fair to say that the parties understood the nature and scope of the damage that had been done under the Program, and in August 2022, counsel for Canada announced that they had received instructions to negotiate a settlement of the underlying class proceeding; from there, things moved quickly.
[38] Following judicial mediation sessions in November and December 2022, the parties signed an agreement in principle. The parties worked at negotiating the full terms of a settlement, and met three times, in February, March and April 2023. From the evidence, I note there were extensive negotiations on the Category 2 Compensation Grid which builds on the compensation categories Canada had agreed to in Day Schools, but with the focus being on events rather than proof of harm. In the end, the final version of the Settlement Agreement was concluded in June 2023.
[39] I appreciate the efforts undertaken by Class Counsel and Quebec Subclass Counsel, and acknowledge the amount of time and work that went into this class action and settlement discussions. Having said that, it seems to me that the liability risk, recovery risk, and the risk that the action might not be certified as a class action, even measured from the commencement of the underlying class proceeding, was far from the risks taken on by class counsel in Residential Schools, Day Scholars, Day Schools and Sixties Scoop. I thus take issue with Class Counsel’s portrayal of the risk profile of this particular class action. Canada’s policy decisions and how the government considered reputational risk had changed. Mr. Percival walking into Class Counsel’s office in early 2018 was serendipitous—both he and Class Counsel were at the right place, at the right time, with Class Counsel being, admittedly, in the unique position to appreciate the potential of what Mr. Percival was setting out for them at the time that he did because of their involvement in Sixties Scoop and Day Schools.
[40] I suspect the situation may have been very different had that meeting taken place even five years earlier, however, it did not; although there is never a guarantee of settlement at the commencement of any class action, by 2018, Class Counsel was likely aware that Canada was looking towards reconciliation, and where the research confirmed evidence of hardship occasioned by the misguided Indigenous children educational policies of the past, it was more likely than not that Canada would be willing to sit, listen and discuss a way forward, without aggressive posturing or a vigorous defence of the claims. To a great extent, by 2018, Canada had moved beyond being an adversary in litigation of this type to, in essence, being a willing partner in seeking a resolution and reconciliation for the harms that had been committed. The landscape and context that existed at the time the underlying action was instituted are what differentiate the risk matrix facing Class Counsel from that faced by class counsel in Residential Schools, Day Scholars, Day Schools and Sixties Scoop at the time those actions were instituted.
[41] I accept, as argue the applicants, that there also exists an element of political risk in that the particular government policy favouring settlement may be swept away with a changing government; how one quantifies such risk is difficult given that a policy change in government is not always linked to a change in government and as matter turned out in this case, the election in September 2021 did not bring with it a change of government. However, it seems to me that the path of reconciliation on which Canada was proceeding in 2017 and 2018 did not seem to be at serious risk of coming to an end. Although the settlements in Day Scholars, Day Schools and Sixties Scoop took place on the watch of one of the traditional ruling political parties in Canada, the IRSSA, and with it the establishment of the TRC, took place on the watch of the other.
[42] Indeed, instructions from Canada to settle only came in August 2022 and there had been an election only a few months earlier, however, and although there was always an element of risk prior to the AGC signaling his mandate to settle, everything in the record showed that the issue of liability was not being seriously challenged by Canada; by then, draft reports as to potential class size had been exchanged and a potential compensation grid had also been shared between the parties—the actual grid finalized in Day Schools was not appropriate in the present case—and there had been further exchanges on what Counsel would be willing to recommend; it seems to me from the evidence that by the time mandate was given to the AGC to seek a settlement, enough information had been uncovered to convince Canada that a serious risk of liability existed. In any event, the case law at the time which recognized the viability of a claim for loss of language, culture, heritage and identity, as well as the previous abuse cases dealing with the vicarious liability of Canada for the fault of their staff and employees would, it seems to me, have been difficult to ignore by any government. In fact, as Class Counsel stated at the settlement approval hearing, they had just come off the Sixties Scoop case and when Mr. Percival walked into their office, they “saw something there that other firms [other than Quebec Subclass Counsel] hadn’t seen”.
[43] I also accept that when Quebec Subclass Counsel filed the class action on behalf of Anne Smith and others in 2016, the risk profile was a much closer to that in Day Schools. However, the evidence shows, and as conceded by counsel, the Quebec class action was instituted primarily to preserve time bar for those individuals who attended boarding schools and were not included in the IRSSA. In addition, from the evidence, the Quebec class action started small and evolved over time, reducing the risk assumed by counsel when they took on the file. As stated, Quebec class action was initially only filed in respect of one community, which later expanded to another, but it was only after the underlying action was filed in July 2018 that the Quebec class action expanded to cover all the communities in Quebec. Whatever the risks at the time of filing, Quebec Subclass Counsel were prepared to move forward with the litigation without a retainer agreement until August 2021. While I cannot fault Quebec Subclass Counsel for agreeing to move a case forward without a retainer agreement, the lack of any such agreement is relevant to the financial risk which counsel was willing to take on at the time.
[44] Class Counsel had indicated during the settlement approval hearing that one of the initial risks to the viability of the underlying class action was the unknown size of the class and the expansiveness of the Program; however, given that they were just coming off Sixties Scoop—a case which mitigated the risks inherent in claims of loss of culture, language and heritage given the determination by the Court on the summary judgment application—Class Counsel was willing to take the risk of class size, i.e., that the class was limited to the Nisga’a community where Mr. Percival was from.
[45] In February 2018, Mr. Percival had provided Class Counsel with a box of documents allowing Class Counsel to undertake its initial research into the scope of the issue, and by April 2018, Class Counsel had decided to take on the case. The initial search they undertook suggested there were other communities involved, but as things “got going”, it became clear that the issue was national in scope. With the early pause in the proceedings and the research undertaken by Canada to better understand the scope of the Program, it did not take long for the national scope of the Program to come to light. While risk is typically calculated from the outset, emerging jurisprudence on class actions also looks to the progression of the risk as the litigation continues (Moushoom at paras 82–85). Here, it seems to me that the level of risk at the time the underlying action was instituted was considerably less than in previous cases dealing with the abuse to Indigenous children, and the progression of the risk was for the better from the early stages of the litigation in this matter.
[46] As mentioned, I think the risk prof