Pre-1986/post-1990 Hepatitis C Final Settlement Agreement

Docken & Company News

(2006-12-17) The federal government and plaintiffs’ counsel have concluded the settlement agreement for all those infected with hepatitis C from the Canadian blood system between January 1, 1958, and December 31, 1985, and between July 2, 1990, and September 28, 1998. The federal government will set aside $1.023 billion (composed of $962 million for compensation, $20 million in administrative costs, $37.29 million in legal fees plus applicable taxes, and $500,000 in disbursements plus applicable taxes) for the pre-1986/post-1990 final settlement agreement.

Prime Minister Stephen Harper in the House of Commons

The agreement is based, to the extent possible, on parity with the federal share of compensation for those infected from 1986-1990 (the federal government paid 8/11ths of the 1986-1990 settlement). The federal government has not admitted any liability in reaching this settlement. This is a negotiated settlement that is supported by both the federal government and plaintiffs’ counsel.

As was the case with the 1986-1990 settlement agreement, this agreement is designed so that those who are most sick and have suffered the most damage from their hepatitis C infection will receive the highest amounts of compensation. Hepatitis C has varying effects on the human body, and the compensation plan is structured to reflect this fact.

Class members will be paid on a present-value basis, that will provide a lump-sum payment based on an individual’s current health status, age, and the probability of disease progression. This is different from the 1986-1990 settlement, which only paid increased benefits once the disease actually progressed, requiring ongoing administration and re-application. In addition to the lump-sum payment, claimants will be eligible to apply for damages for past loss of income and loss of services. Payments will also be available to estates and surviving family members. Eligibility criteria will be the same as in the 1986-1990 agreement, which involved the submission of appropriate medical records and evidence to document the existence of a hepatitis C infection, current health status and the source of infection. In addition, as with the 1986-1990 agreement, there are provisions in the final settlement agreement that permit alternative application measures in the absence of documented proof, such as the provision of affidavits from independent parties, in order to confirm that the infection was due to the blood supply.

The final settlement agreement includes a deduction of 8/11ths of the amount of compensation paid to class members out of the insolvency of the Red Cross (approximately $7,490 per person, regardless of health status). This compensation was not made available to the 1986-1990 Class. The amount will only be deducted from those who received payments from the Red Cross. No deduction will be applied for compensation paid by a provincial/territorial government.

Two steps remain before class members begin to receive compensation payments. The first is to seek approvals of the Courts in British Columbia, Alberta, Quebec and Ontario (representing the national class), where the class actions are filed. The second step is the creation of the administrative structure to receive and to evaluate applications. While the timing of both steps is outside of the federal government’s control, the federal government is taking all possible measures to provide compensation to eligible class members as quickly as possible.

The first part of the Court process is to seek approval of plans to notify the class of the date set for approval of the agreement in order to give class members an opportunity to attend, and to object if they so choose. The actual hearings for the Court to approve the agreement take place following the notification period. This process begins on December 15, 2006, with both parties seeking approval of the notification plan in Quebec. This will be followed shortly by similar hearings in the remaining three Courts.

See the Settlement Agreement (4.5 MB PDF file)