Charter Damages and the Implications for Class Actions Against the Crown

1. Charter Damages and the Implications for Class Actions Against the Crown R. Douglas Elliott Roy Elliott O’Connor L.L.P www.reolaw.ca February 18, 2011

2. Ward v. British Columbia[2010] 2 S.C.R. 28 • In 2002, Mr. Ward was arrested and detained for over four hours by Vancouver police, after police wrongly identified him for a person planning to throw a pie at former Prime Minister Jean Chrétien • B.C. Supreme Court held Mr. Ward’s rights under the Charter were violated as a result of wrongful imprisonment, a strip search, and the unreasonable search and seizure of his car • Mr. Ward was awarded the following in damages: • $5,000 for strip search (Charter) • $5,000 for wrongful imprisonment (tort) • $100 for search and seizure of car (Charter) • Declarations that his rights were infringed • BC Court of Appeal upheld decision of trial judge

3. Ward v. British Columbia[2010] 2 S.C.R. 28 • Supreme Court allowed appeal on damages for search and seizure but upheld the $5,000 awarded for strip search • Justice McLachlin provides four-step test for when damages are available under s.24(1) of Charter: • 1) Proof of Charter breach • 2) Functional justification of damages • 3) Countervailing factors • 4) Quantum of s.24(1) damages

4. Requirement of Bad faith? • In Ward it was held that there was a violation of the Charter even though bad faith could not be proven • If a “bad faith” were required- whose “bad faith needs to be proved?” • The Queen? • The police? • The Crown? • “Bad faith” requirement should only be relevant if seeking punitive damages • Reality of imposing a bad faith requirement= immunizing the Crown, an illusion of justice

5. “Appropriate and Just” Standards: • Test from Doucet-Boudreau for section 24 remedies • Appropriate” should mean the remedy that best vindicates the Charter breach • Schacter v. Canada[1992] 2 S.C.R. 679: "apply the measures which will best vindicate the values expressed in the Charter" and "refrain from intruding into the legislative sphere beyond what is necessary" • “Just” should mean that the level of compensation is proportionate to the damage done • Crown may think the “appropriate and just” standard gives too much discretion to the court • Crown doesn’t object to flexible tests that favours the Crown, e.g. Cooper v. Hobart[2001] S.C.J. No. 76 requirement that the Court consider “other policy consideration” before finding a new duty of care – see Eliopolous and Williams • It is part of the court’s job to determine what is “just” and the language of the Charter gives the Court the widest possible discretion

6. Can other remedies achieve a just result? • Often other remedies can achieve a just result- monetary damages will not always be the most just remedy • Ward does not stand for the proposition that damages should be the first remedy pursued in any Charter action • What remedy should be given depends, in part, on the nature of the Charter violation • R. v. Big M. Drug Mart Ltd.[1985] 1. S.C.R. 295: fails at rational connection appropriate remedy: nullification • Vriend v. Alberta[1998] 1.S.C.R.493: problem is under-inclusive legislation appropriate remedy: reading in • R v. Sharpe[2001] 1 S.C.R. 45: problem is over-inclusive legislation appropriate remedy: reading down

7. “Thwarting effective governance”? • Crown will always argue that large damages awards may prevent effective governance • Previously, the Crown has settled class proceedings for over $1 billion dollars • Hepatitis C case (1986-1990): settled in 1998 for over $1.1 billion • Hepatitis C case (pre-1986, post-1990): settled in 2006 for over $1.02 billion • Residential Schools: settled in 2007 for over $1.9 billion • Difficult to argue that any damages under $1 billion will thwart effective governance • Some negative financial impact on government should not be enough to deny a remedy (Eldridge v. British Columbia (Attorney General), [1997] 3 S.C.R. 624)

8. “Thwarting effective governance”? • The financial burden is argument may only reasonably be made by the Crown in situations like the NAPE case, and is best considered under section 1 • Newfoundland (Treasury Board) v. N.A.P.E. [2004] 3 S.C.R. 381 • Provincial government entered a pay equity agreement with Newfoundland Association of Public Employees to adjust wages for women to be comparable with salaries for males • However, provincial government had a deficit and enacted legislation to cancel the agreement, saving the government about $24 million • Supreme Court found that the legislation had effect of harming women but that violation was reasonable under s.1 due to the financial crisis of government- the crisis amounted to a “pressing and substantial objective”

9. Double Recovery Problems: • Justice McLachlin in Ward clearly states: • “The existence of a potential claim in tort does not therefore bar a claimant from obtaining damages under the Charter. Tort law and the Charter are distinct legal avenues. However, a concurrent action in tort, or other private law claim, bars s. 24(1) damages if the result would be double compensation” • Double recovery should not be an issue as a result of the Ward decision

10. Implications on class proceedings: • In Guimondv. Quebec (Attorney General)[1996] 3 S.C.R. 347, Justice Gonthier, in obiter, effectively barred class proceedings as a way to obtain a declaration: • “Furthermore, while it is true that it is not necessary to pursue a class action to obtain a declaration of constitutional invalidity and therefore, that it is generally undesirable to do so, it is not necessary, in this case, to canvass whether or not there resides a residual discretion to deny authorization should the constituent criteria of art. 1003 be met” • However, now that damages are available as a possible remedy, there may be an increase in class proceedings for Charter violations if the goal is to recover financial compensation for a group • Historically, declarations with a suspension are the most common remedy in Charter proceedings

11. Malicious prosecution actions: • The Supreme Court in Nelles v. Ontario[1989] 2 S.C.R. 170 establishes a stringent test for the tort of malicious prosecution, including proof of intentional “malice” • Ward will make it easier to pursue a claim for a Charter breach as opposed to malicious prosecution in certain cases because there is no requirement to prove intentional malice

12. Hislop v. Canada: Certified as a class action under the style of Brogaard v Canada in British Columbia Test case approach had been tried and failed because of Crown settlement strategy A class action was preferable because the goal was recovering pensions for all class members, not just a declaration Remedy granted despite a trial finding that there was no bad faith

13. Supreme Court has recently approved certifying class actions for Charter breaches (Manague v. Canada, [2010] S.C.J. No.67 (S.C.C.)) The availability of damages means a narrow scope for the objections made in Guimond Success of the class action process in Hislop demonstrates a class action can be appropriate and useful in some cases Financial incentive for law firms to pursue a risky case, but firms will need to be aware of the danger of statutory bars to the lien for fees as in Hislop Circumstances will still be somewhat uncommon, because the facts will have to involve a wrong done to a group in a situation where financial compensation is an appropriate Class actions are more likely to be appropriate in cases of wrongful acts by Crown servants as opposed to the effects of constitutionally infirm statutes (though that was the nature of problem in Hislop) The G20 class actions appears to fit these requirements, provided that they focus on systemic problems common to a group or groups, such as inadequate detention facilities, as opposed to individual incidents, such as the beating of some protestors by some police officers Do Charter class actions have a future after Ward?