JW v Canada (AG) : The Judiciary’s Role in Supervising Residential School Settlement Agreements
Certain class action lawsuits require settlement agreements to ensure the fair distribution of settlement funds through an adjudicative process. An Independent Assessment Process (“IAP”) provides for an independent adjudicator to determine the validity of disputed claims. In JW v Canada (Attorney General), 2019 SCC 20 [JW], the Supreme Court of Canada (“SCC” or “the Court”) ruled that the courts should supervise and potentially intervene in disputed class action settlement agreements when the terms of such agreements are modified by these adjudicators. In JW, the Court overturned the decision of the Manitoba Court of Appeal and restored an award for a residential school survivor that was initially dismissed by an adjudicator because it failed to demonstrate that the abusive actions were accompanied by a “sexual purpose.” The SCC’s ruling has broad implications for class action lawsuits and settlement agreements that create an adjudicative process to determine the validity of potential claims.
Over the span of almost 130 years, from the 1860s to the 1990s, more than 150,000 First Nations, Inuit, and Métis children were removed from their homes and forced to attend residential schools run by religious organizations and funded by the Canadian government (JW, para 56). After many years of neglect, the truth of the living conditions endured by Indigenous children in residential schools has slowly emerged. It is now acknowledged that these children were removed from their homes in order to sever their ties with their Indigenous roots. It is also accepted that thousands of these children suffered physical, emotional, and sexual abuse while attending residential schools (JW, para 56).
On May 8, 2006, the Government of Canada signed an agreement to settle a class action lawsuit with over 80,000 plaintiffs who had suffered harm due to the residential schools regime. The Indian Residential Schools Settlement Agreement (“IRSSA”) sought to achieve a “fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools” (JW, para 57). Among other things, the agreement created two pathways for class members to receive compensation. The first was a “common experience” payment that was available to all eligible former students. The second was through the creation of an Independent Assessment Process (“IAP”), which awards individual claimants for specific compensable harms (JW, para 9). The IRSSA outlines the policies and procedures that the IAP must follow and sets out the internal review mechanisms of any decision. The agreement was approved in nine provinces and territories, and each was assigned a supervising judge to oversee the implementation of the agreement.
In 2014, J.W. (the “Appellant”) brought forward an individual claim to be processed in accordance with the IAP. The Appellant asserted that while he was a young boy at a Manitoba residential school, he was the victim of an incident in which a nun touched his genitals over his clothing. The Appellant claimed that this form of abuse was covered a defined category of harm under the IRSSA. Specifically, category SL1.4 of the IRSSA allows individuals to seek claims for
[a]ny touching of a student, including touching with an object, by an adult employee or other adult lawfully on the premises which exceeds recognized parental contact and violates the sexual integrity of the student. (JW, para 36)
The facts of incident were not in dispute, and as such, the Hearing Adjudicator accepted that the incident occurred. Despite this, the Adjudicator denied the Appellant’s claim on the grounds that he was not able to prove an element of “sexual” intent in the nun’s behaviour (JW, para 37).
The IRSSA permitted J.W. to seek two levels of review for the negative decision. The Appellant was unsuccessful at both stages, with the Review Adjudicators finding that the Hearing Adjudicator was correct in requiring J.W. to establish not only the act of touching, but also the accompanying sexual intent. Pursuant to the agreement, the Appellant then brought a Request for Directions (“RFD”) application to the provincial supervising judge. The judge fundamentally disagreed with the earlier decisions and remitted the Appellant’s claim for re-adjudication. The new adjudicator allowed the claim, finding that J.W. had proven on a balance of probabilities that the requirements of category SL1.4 had been met, and awarded J.W. $12,720 in compensatory damages.
Before this decision could be implemented, the Attorney General of Canada (“AG”) appealed the supervising judge’s intervention to the Manitoba Court of Appeal, which unanimously concluded that the supervising judge exceeded his jurisdiction under the IRSSA. The Court of Appeal agreed with the submissions of the AG, emphasizing that there is no right to appeal or seek judicial review of IAP decisions (JW, para 95).
J.W. appealed the decision of the Manitoba Court of Appeal to the SCC.
The SCC was confronted with two essential issues in this case:
- Is judicial review of the decisions of IAP adjudicators available?
- If judicial review is not available, what is the scope of the judicial recourse available to parties seeking intervention by the supervising courts in decisions rendered under the IAP? (JW, para 98)
The Court released three separate judgements on these important issues. Justice Abella wrote the majority position that allowed the appeal, on behalf of herself, Chief Justice Wagner, and Justice Karakatsanis. Justices Cotê and Moldaver wrote a concurring opinion, while Justices Brown and Rowe dissented and would have dismissed the case.
Majority (Justices Abella, Wagner, and Karakatsanis)
The majority of the Court found that the Manitoba Court of Appeal erred in limiting the role of the supervising judge.
According to Justice Abella, it is not enough for the adjudicator to simply refer to the relevant sections of the IAP. Any meaningful judicial supervision of an IAP decision must imply a review of how an adjudicator interprets or applies the relevant sections. According to Justice Abella, this expansive approach to the role of the supervising judges is more aligned with the purposes of the Agreement, which is to ensure “a fair, comprehensive and lasting resolution of the legacy of Indian Residential Schools” (JW, para 33).
Justice Abella concluded that the supervising judge correctly found that the Hearing Adjudicator’s decision constituted “an unauthorized modification of SL1.4 by substituting the phrase ‘any touching’ with ‘sexual touching’” (JW, para 44). Reading in this additional requirement was an unauthorized modification of the agreement, and such a modification “amounted to a failure to apply or implement the terms of the Agreement, warranting judicial supervisory intervention to ensure that the benefits promised in the Agreement were delivered” (JW, para 44).
By allowing the appeal, the Reconsideration Adjudicator’s decision was upheld and J.W.’s award was reinstated.
Concurring Decision (Justices Cotê and Moldaver)
Although coming to the same conclusion on allowing the appeal, Justice Cotê made a point to clarify the material nature of the IRSSA. She explained how the IRSSA is essentially a contract, and as such it is like any other contractual agreement between the parties: If the parties are not satisfied with the terms of the agreement, the courts do not have the authority to substitute or rewrite the contract in a manner that favours one party over the other. The adjudicative body is created out of an agreement and not out of a statutory provision. As such, IAP adjudicators do not have statutory backing, and so there is no executive decision to be judicially reviewed.
According to Justice Cotê, the supervisory judge only has a hand in the administration of the agreement – not in the correctness of the adjudication. In this case, the Hearing Adjudicator interpreted SL1.4 of the IRSSA as requiring the Appellant to prove the sexual intent of the nun. For Justices Cotê and Moldaver, it is outside the jurisdiction of the courts to review this determination.
In spite of this, Justice Cotê still concluded that the appeal should be allowed because the case created a unique circumstance for which the IRSSA provided no guidance. The IAP scheme includes a Chief Adjudicator who represents the final level of review. This Chief Adjudicator had already conceded that the claim was wrongly decided by the initial adjudicators and that those initial decisions were “aberrant” (JW, para 61). The IRSSA contained no mechanism through which the Chief Adjudicator could re-open the file, and as such Justice Cotê deemed it appropriate for the Court to step in and fill this “procedural gap” (JW, para 61).
Dissent (Justices Rowe and Brown)
Justices Brown and Rowe dissented with their colleagues on the outcome of the appeal, but agreed with Justices Cotê and Moldaver on the narrower role of supervising judges in such agreements. They found that there was no procedural gap to fill and as such, there were no grounds to interfere with the initial decisions. The IRSSA only allows for judicial recourse when the value of the harm suffered by a claimant exceeds compensation limits, or when the evidence is too complex for the hearing adjudicator (JW, para 182). According to Justice Brown, this clarity in the IRSSA precludes any judicial body from re-opening a claim to reconsider its outcome.
Class proceedings are governed by three guiding principles: judicial economy, access to justice, and behaviour modification. It is interesting to understand the varied positions of the Court through the lens of these principles. Justice Abella’s decision, which seeks gives a broader role to supervising judges, can be understood as promoting access to justice and ensuring deterrence against the type of abuse that occurred at residential schools. By ensuring that all meritorious claims are judicially reviewable, the majority’s decision creates an equitable remedy in such situations where the internal review process of the IRSSA has failed the claimant.
The concurring and dissenting positions, which create a more limited scope for supervising judges, can be understood as promoting the principle of judicial economy. The IRSSA was a methodically detailed agreement, and one that did not explicitly create a mechanism for judicial review. In the view of the concurrence and dissent, it is less economical for the courts to review individual decisions where an internal review mechanism has already been established.
Although Justice Abella wrote the main decision that would allow the appeal, Justice Cotê’s decision on the more limited standard of access to the courts in such settlement agreements garnered support from a total of four Justices, or the majority of the Bench.
This is a complicated ruling that clarifies the role of judicial intervention in certain settlement agreements. The decision will likely force parties to create well defined rules of how to resolve disputes in settlement agreements that create an adjudication process. By eliminating procedural gaps, and clearly stipulating the role that supervising judges can have, parties can create a more airtight system that would prevent this type of case from arising.