Rescinded [2009-10-01] - Policy on Claims and Ex Gratia Payment

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1. Effective date

This document contains the entire text of the policy as revised June 1, 1998 and replaces the version dated December 15, 1996.

2. Preface

As a key component of risk management, this policy replaces the policy and related requirements which were the subject of Treasury Board and Governor in Council regulations and orders, i.e., the Claims Regulations, National Defence Claims Order, 1970 and the Ex gratia Payments Order, 1974. It also eliminates the inconsistencies, duplication, complexities, and prescriptive directions which existed in those instruments.

In the spirit of the management philosophy of the Public Service, deputy heads now have the authority to resolve most non-contractual claims and make ex gratia payments. At the same time, the support of the Department of Justice is maintained by retaining the requirement for legal advice but at a higher-dollar level of involvement. The policy also empowers and encourages deputy heads to consider overall cost-effectiveness in resolving claims and to designate officials to exercise authority on their behalf.

This clears the way for departments to ensure that claims by and against the Crown, its servants, and the public are dealt with efficiently and effectively.

The ongoing requirement to report payments each year in the Public Accounts continues to provide visibility and a measurement of the new level of accountability.

3. Definitions

Claim (réclamations) - request for compensation to cover losses, expenditures or damages sustained by the Crown or a claimant, including requests or suggestions that the Crown make an ex gratia payment. Claims can be settled in or out of court.

Ex gratia payment (paiement à titre) - a benevolent payment made by the Crown under the authority of the Governor in Council. The payment is made to anyone in the public interest for loss or expenditure incurred for which there is no legal liability on the part of the Crown. An ex gratia payment is an exceptional vehicle used only when there is no statutory, regulatory or policy vehicle to make the payment.

In accordance with the Order in Council reproduced in Appendix C, this policy delegates to deputy heads the authority to make ex gratia payments subject to the policy requirements.

Judgement (jugement) - a decision rendered by the courts to resolve a claim between respective parties.

Settlement (règlement) - an agreement reached through negotiation between respective parties to resolve a claim.

4. Policy objective

To ensure the efficient and effective resolution of claims by and against Her Majesty in Right of Canada (the Crown) arising from government operations.

5. Policy statement

  1. It is government policy to provide for adequate and timely settlement and payment of claims by or against the Crown and against its servants.
  2. Deputy heads (which includes heads of agencies) have the authority to resolve claims by and against the Crown when requirements of this policy are met. In particular, Deputy Heads have the authority to:
    1. accept amounts in settlement of claims by the Crown;
    2. recover from servants any amounts owing to the Crown by servants;
    3. pay amounts in settlement of liability claims against the Crown; and
    4. make ex gratia payments.
  3. Any authority in this policy may be exercised by an official designated by the deputy head, except only the deputy head may approve ex gratia payments over $2,000. In the case of the Department of National Defence and the Canadian Forces, the Judge Advocate General may make ex gratia payments for any amount.

6. Application

This policy applies to:

  • departments and departmental corporations as defined in section 2 of the Financial Administration Act; the Canadian Forces; and the Royal Canadian Mounted Police; and
  • every individual appointed or employed as a servant of Her Majesty in Right of Canada (the Crown). Without limiting the generality of this application, "servant" includes any individual appointed or employed by a department; any minister, agent, and former servant of the Crown; and the estate of a deceased servant of the Crown. It does not include any person appointed or employed by or under the authority of an ordinance of the Yukon Territory or the Northwest Territories, or any person engaged under a contract for services.

This policy does not apply to claims by or against the Crown that are covered by other authorities, governing instruments or policies. Some examples of claims not covered by this policy include the following: claims under Section 11 of the Canadian Human Rights Act (Equal Wages); claims resulting from contract disputes; claims for losses and recovery of money; claims for damages to servants' effects while on relocation or travel status; or claims related to bodily injury while on duty.

7. Policy requirements

7.1 Investigations

  1. As soon as a department becomes aware of an incident which could lead to a claim by or against the Crown or against a servant, it shall conduct an investigation of the incident at the earliest reasonable opportunity. While keeping the level of investigation commensurate with the amounts involved, the department shall obtain, as appropriate:
  1. a full statement of the duties of any servant involved;
  2. where Crown property is involved, detailed information relating to its use and the authority for such use;
  3. statements from servants and other persons having any knowledge of the circumstances;
  4. copies of any reports made to the police in connection with the incident;
  5. a description of the incident and such plans, sketches or photographs as may be necessary to understand the exact nature of the incident;
  6. any further information and material as may be required for a legal opinion;
  7. the assistance of the Royal Canadian Mounted Police; and
  8. the assistance of private sector claims adjustment services or collection agencies.

Additional details on investigations appear in Section 4, of the Guidelines on Risk Management (Appendix B of the Risk Management Policy).

7.2 General

  1. Except as may be limited by this policy, departments must refer all claims involving legal proceedings to Legal Services, Department of Justice.
  2. For claims in tort by or against the Crown, i.e. generally the claim is not based solely on a contract, departments must follow the authorities and procedures prescribed below under Claims against the Crown and Claims by the Crown. Special provisions regarding motor vehicle accident claims appear in Appendix A.
  3. For the settlement and payment of claims associated with a contract, departments must ensure that the payment is in accordance with the Contracting Policy and within the authority provided by the terms of the contract. Otherwise, departments must refer the matter to Legal Services.
  4. For claims against servants of the Crown, departments must ensure that the Policy on Indemnification of and Legal Assistance for Crown Servants is considered at the earliest opportunity.
  5. Departments must not claim damages from another department, and must make every effort to resolve any claim between the department and a Crown corporation. Otherwise, the matter must be referred to the Deputy Attorney General.
  6. For the negotiation and payment of settlements under the Canadian Human Rights Act, and Tribunal Orders that are not made Orders of the Federal Court, departments must:
  • treat a complaint lodged under the Act as if it were a tort;
  • follow the procedures and dollar-threshold levels set out below under Claims against, and by the Crown, as if the payment were a liability payment with the related funding provisions;
  • record and report payments in the same section of the Public Accounts as Payment of Damage Claims.

7.3 Claims against the Crown

7.3.1 Claimant's position

Where a claim is made against the Crown, the department shall, without prejudice and without admitting liability, request the claimant to furnish: a detailed statement of the facts upon which the claim is based; a detailed statement showing how the claim is calculated; and copies of documents verifying all disbursements.

7.3.2 Legal opinion

  1. A legal opinion shall be obtained before undertaking to pay more than $25,000 to resolve a claim. A legal opinion may also be obtained in any other case.
  2. A legal opinion shall be obtained from Legal Services. Where the claim concerns the Department of National Defence or Canadian Forces, the legal opinion may be obtained from the Office of the Judge Advocate General if:
    • the undertaking to pay will not exceed $80,000; or
    • the payment is ex gratia.
  3. A request for a legal opinion shall be accompanied by the report of the investigation and information, if any, received from the claimant. The legal opinion shall address:
    • liability of the Crown;
    • what steps, if any, should be taken to resolve the claim, bearing in mind the cost-effectiveness of any such steps; and
    • the terms and conditions on which it would be advisable to resolve the claim.

7.3.3 Liability payment

In deciding whether to make a liability payment, deputy heads shall consider:

  1. the legal and other merits of the claim; and
  2. administrative expediency and cost-effectiveness.

7.3.4 Ex gratia payment

In deciding whether to make an ex gratia payment, deputy heads shall consider whether there are any other reasonable means of compensation, and that:

  1. claims and ex gratia payments are subject to consideration of federal or provincial statutes, private or public programs, contract provisions, commercial insurance or recovery from third parties;
  2. this policy is not to be used to fill perceived gaps or compensate for the apparent limitations in any act, order, regulation, policy, agreement or other governing instruments, e.g. if a particular subject is governed by, but a payment does not appear to meet the terms of, another instrument, this policy cannot be used to expand that instrument - an exception to the governing instrument would need to be sought;
  3. if there does not appear to be a governing instrument, particularly in proposed ex gratia cases, it is imperative that all other possible sources of compensation be reviewed, i.e. statutory or regulatory schemes, other Treasury Board policies, program funding, grants or contributions;
  4. if, after the review, there is still no other source of funds, no liability on the part of the Crown, and no limitation or restriction imposed in existing schemes which would prohibit it, payment may be made ex gratia; and
  5. the amount of the payment should be reduced where the acts or omissions of any person, including persons for whom a payment is being considered, contributed to the loss or expenditure incurred.

7.3.5 Damage to servants' effects

Claims for servants' effects which are damaged, lost, stolen, or destroyed will be paid as a liability of the Crown or ex gratia, and the following additional criteria will apply:

  1. compensation will be based on the full cost to replace the effects with effects of the same or equivalent quality, or the reasonable cost to repair them, whichever is the most appropriate; and
  2. servants' effects include only those items which deputy heads consider to be reasonably related to the performance of a servant's duties at the time of the loss or damage.

7.3.6 Releases

In consideration of payment to settle a liability claim, a release shall be obtained except where it would not be administratively expedient. The release shall be in the form shown at Appendix B, or as directed in the legal opinion. For ex gratia payments a release is not normally required.

7.4 Claims by the Crown

7.4.1 Crown's position

Deputy heads shall make every reasonable effort to obtain satisfaction of claims by the Crown, taking into account administrative expediency and cost-effectiveness.

7.4.2 Legal opinion

Deputy heads shall seek a legal opinion where substantial sums are at stake or where there is uncertainty as to the relevant facts or applicable legal principles.

7.4.3 Recovery from servants

Where the Crown has a claim against a servant for which the servant is not indemnified under the Indemnification policy, and the deputy head intends to authorize retaining the amount of the claim by deduction from, or set-off against, any money that may be due or payable by the Crown to the servant, the deputy head shall:

  1. notify the servant of the proposed retention and of the servant's right to make representation to the deputy head within 30 days; and
  2. consider the servant's representation, if any, before making a final decision.

7.4.4 Releases

The deputy head may sign a release as a condition of payment being made to resolve a claim by the Crown.

8. Responsibilities

The Department of Justice provides legal opinions and advice, and negotiation services, and is responsible for litigation concerning claims by or against the Crown and against its servants, and for advising on the provision of legal assistance to servants at public expense.

9. Monitoring

The Treasury Board Secretariat will periodically review the effectiveness of this policy in assisting departments to manage the risks to which they are exposed. Feedback on the implementation and effectiveness of the policy will be obtained from departmental monitoring information, internal audits, reviews and from other reports and government organizations. For example, this will include data from the Public Accounts reports regarding: payment of claims against the Crown; losses of money and public property; court awards; and ex gratia payments. Payment of claims in respect of servants' effects will appear in each of the relevant reports.

10. References

10.1 Authority

This policy is issued under the authority of section 7 of the Financial Administration Act, Treasury Board minutes 816967 and 816968, August 13, 1991 (Claims and Ex gratia Policy as fully integrated in this chapter) and the Ex gratia Payments Order 1991, September 5, 1991, see Appendix C.

10.2 Treasury Board policies and publications

Contracting Policy

Injury-on-Duty Leave

Policy on Losses of Money and Offences and Other Illegal Acts Against the Crown

Policy on Receivables Management

Relocation Directive

Risk Management Policy

Travel Directive

Workers' Compensation

11. Enquiries

All enquiries about this policy should be directed to the official designated by each department as responsible for risk management and, when appropriate and relevant, to Legal Services, or the Judge Advocate General in the case of the Department of National Defence or the Canadian Forces. When required, officials should then refer enquiries to Risk, Procurement and Assets Management Policy Sector, Comptrollership Branch, Treasury Board of Canada Secretariat.

For fundamental or more complex enquiries, a risk management analysis should first be undertaken (refer to the Risk Management Policy).

Appendix A - Motor vehicle accident claims

1. Provincial unsatisfied judgement funds

Before attempting to recover from provincial unsatisfied judgement funds any claims resulting from automobile accidents, departments should abide by all applicable provisions established by provincial legislation, including any limitation period. In this instance, the Crown is governed by the same liabilities imposed by provincial laws as any subject of the Crown. As the periods vary between provinces and are changed from time to time, departments should consult their legal services without delay.

Because proceedings leading to attempts to recover from unsatisfied judgement funds are complex, technical and expensive, departments should take prompt action to obtain satisfaction of claims by the Crown by other means.

If the size of the claim and the failure of alternative collection action makes it reasonable to seek redress from an unsatisfied judgement fund, the department should ensure that the claim is referred to the Deputy Minister of Justice within the limitation period prescribed for a subject of the Crown. In most provinces the prescribed period is one year.

2. Motor vehicle property damage claims

Except as provided below, claims are to be handled in the usual manner of claims by and against the Crown in respect of collisions with motor vehicle owners and their insurers.

Certain provinces have established a system of direct compensation to resolve motor vehicle property damage claims. In that context, pursuant to Treasury Board decision of September 17, 1992, the President of the Treasury Board, in consultation with the Minister of Justice, has the authority to commit federal entities within the application of this policy to adopting a motor vehicle damage claim scheme in the provinces. In some provinces (e.g. Quebec) such a scheme is referred to as "direct compensation" and in others (e.g. Ontario) as "no fault". To implement such a commitment, the TB decision also authorizes the President, if necessary, to enter into an agreement with a single representative of insurers in any province. Accordingly, the federal Crown has filed a formal undertaking with the Ontario Insurance Commission for motor vehicle accidents in Ontario and has negotiated an informal arrangement with the Groupement des assureurs automobiles (GAA) for motor vehicle accidents in Quebec.

2.1 Ontario

The following provisions pertain to property damage to motor vehicles sustained in an accident in Ontario. The claims arising from such damage, and the resolution of those claims are to be processed according to the provisions of the Ontario Motorist Protection Plan.

2.1.1 Direct compensation

Effective June 1, 1998 and in accordance with the undertaking filed by the Treasury Board of Canada Secretariat with the Ontario Insurance Commission, the following applies:

  • in cases of automobile accidents occurring in Ontario that involve Ontario-insured vehicles and commercially uninsured government-owned or leased vehicles, the Crown will pay for its own property damage and will make no claims against owners of Ontario-insured vehicles.

More specifically, the undertaking filed by the Treasury Board of Canada Secretariat reads as follows:

"Although departments of the Government of Canada, as defined by section 2 of the Financial Administration Act, R.S.C. 19985, c. F-11, including the Office of the Secretary to the Governor General, (collectively the "federal Crown") are exempt from the requirement to be insured under the Compulsory Automobile Insurance Act, the federal Crown hereby undertakes that any property damage occurring in Ontario on or after June 1, 1998 and arising from the ownership, operation or use of an automobile owned by or leased to the federal Crown shall be settled in accordance with section 263 of the Insurance Act as though the federal Crown were an insurer licensed in Ontario that insures the automobile under a contract evidenced by a motor vehicle liability policy."

"This Undertaking shall remain in effect for so long as the federal Crown remains exempt from the requirement to be insured under the Compulsory Automobile Insurance Act, or until withdrawn by the federal Crown."

2.2 Quebec

The following provisions only pertain to property damage to motor vehicles sustained in an accident in Quebec, the claims arising from such damage, and the resolution of those claims in light of the Quebec Automobile Insurance Act. They will apply to all collisions occurring in Quebec as of January 1, 1997.

In Quebec, any insurer authorized to write automobile insurance under the Quebec Insurance Act and holding a license from the Inspector General of Financial Institutions is an authorized insurer and is a member of the Groupement des assureurs automobiles.

Under section 173 of the Quebec Automobile Insurance Act, GAA has established a Direct Compensation Agreement (DCA) binding upon all authorized insurers, the Quebec government, its agents and representatives and any person referred to in section 102 of the Quebec Automobile Insurance Act (self-insured). Other parties not referred to in the act have voluntarily agreed to abide and be bound by the DCA.

2.2.1 Direct compensation

Under an informal arrangement with the GAA as representative of insurers in Quebec, the following apply:

  • The Crown will pay for its own motor vehicle property damage as a result of a collision, as defined in section 1 of the DCA, occurring in Quebec, and will make no claim against owners of vehicles insured by an automobile liability policy in Quebec or any other party bound by the DCA, involved in such a collision. Likewise, those bound by the DCA have been advised by the GAA to forbear from suing the Crown for property damage resulting from a collision in Quebec involving Crown-owned motor vehicles.

2.2.2 Conditions

This arrangement is subject to the following qualifications:

  • Crown reserves right to sue and defend. The Crown reserves the right to defend any claims made against it by a party bound by the DCA or an insured party who insists on suing the Crown. The Crown also reserves the right to advance claims against vehicle owners whose insurers do not adhere to the direct compensation arrangement.
  • Furthermore, consistent with Section IV of the DCA, there are exceptional circumstances for which the Crown and other insurers have the right to sue:
    • where the Crown vehicle is damaged while in the care, custody and control of any garage owner, any parking lot operator, a motor vehicle dealer (as referred to in the Highway Safety Code of Quebec), and any towing business operator;
    • where the Crown vehicle is damaged while being towed;
    • where the Crown vehicle is damaged by a vehicle which is exempted from being insured under an automobile liability policy for example: a farm tractor, a farm trailer, a snowmobile, a vehicle intended for use off a public highway, as provided by the Regulations respecting exemptions from the obligation to hold a liability insurance contract, O.C. 614-84.


Where the owner of an exempted vehicle has chosen to have that vehicle covered by an automobile liability policy, then the provisions of the DCA apply to the settlement of a claim arising from an accident with that vehicle.

  • Property Transported. For property transported in a Crown vehicle, which is lost or damaged as a result of an accident, the Crown will pay for the loss or damage to its own property up to a maximum of $2,000.00, and will have the right to claim any amount in excess of the $2,000.00 limit against the owner of the other vehicle.
  • Arbitration. Since the arrangement between the GAA and the Crown is informal, the Crown is not bound by Section V of the DCA pertaining to the arbitration of any dispute between parties bound by the DCA and resulting therefrom.

3. Bodily injury

In the event that a servant suffers personal injury caused by a motor vehicle accident while on duty, it should be handled as an injury on duty according to the standard procedures in the Treasury Board's Workers' Compensation and Injury-on-Duty Leave policies that are part of the Insurance and Related Benefits group of Treasury Board policies.

Enquiries regarding the effect that receipt of compensation payments for bodily injury under provincial automobile insurance programs will have, or an employee's entitlement to benefits under the Public Service Disability Insurance Plan or the Long-term Disability Insurance Plan of the Public Service Management Insurance Plan (PSMIP), may be directed to the Safety, Health, Employee Benefits and Services Group of the Human Resources Branch, Treasury Board of Canada Secretariat.

Appendix B - Release

Know all persons by these presents that (name and address of claimant) does hereby remise, release and forever discharge Her Majesty the Queen in Right of Canada and (name of any officer or servant of the Crown involved), from all manners of action, claims or demands, of whatever kind or nature that (name of claimant) ever had, now has or can, shall or may hereafter have by reason of damage to or personal injury, or both, (here set out subject matter of the damage) as a result of or in any way arising out of (here set out incident and the date, time and place of occurrence).

It is understood and agreed that this Release shall only be effective when payment shall have been made on behalf of Her Majesty to (name of claimant) of the sum of $________

It is also understood that Her Majesty the Queen in Right of Canada does not admit any liability to (name of claimant) by acceptance of this Release or by payment of the said sum of $____________

In Witness Whereof I have hereunto set my hand and seal this _____ day of __________, 19____

Signed, Sealed and Delivered

Appendix C - Order in Council

P.C. 1991-8/1695
September 5, 1991

HIS EXCELLENCY THE GOVERNOR GENERAL IN COUNCIL, on the recommendation of the Treasury Board, is pleased hereby to revoke the Ex gratia Payments Order, 1974, made by Order in Council P.C. 1974-4/1946 of September 3, 1974, and to make the annexed Order(1) respecting ex gratia payments, 1991, in substitution therefor.


Short Title

1. This Order may be cited as the Ex gratia Payments Order, 1991.


2. The Treasury Board may authorize any ex gratia payment.

3. The Treasury Board may designate the deputy head of any department or departmental corporation named in Schedule I or II to the Financial Administration Act or of any other division or branch of the public service of Canada, including a commission appointed under the Inquiries Act, that is designated by the Governor in Council as a department for the purposes of the Act, and the Judge Advocate General, to authorize ex gratia payments.

4. The Treasury Board may authorize any deputy head designated pursuant to section 3 to designate an employee of the deputy head's department, division or branch to authorize ex gratia payments on the deputy head's behalf.

Appendix D - Guidelines

1. General

After a harmful incident has occurred, a normal part of risk management is dealing with any claim that may arise between a department and other entities.

A claim is the amount due, or alleged to be due, or the action taken regarding damages sustained by the Crown or a claimant.

A clear distinction should be drawn between settlement and payment of a claim. Settlement is the adjustment process whereby an agreement is reached through negotiation between the respective parties. Payment is the disbursement of money in respect of the settlement or a judgement of the relevant court.

Claims may be broadly segregated between those in tort and those in contract.

Claims in tort are those in which there is no form of written, oral or implied contractual agreement between the Crown and claimants, as may be determined by the Department of Justice, and for which the Crown may be liable.

Claims in contract should be dealt with according to the terms of the contract and the applicable law. Departments should ensure that the interests of the Crown are protected and any rights at law are exercised.

Where a claim is made in both tort and contract, this policy is to be followed.

Claims by or against the Crown or against its servants should generally be negotiated by, or in conjunction with, the Department of Justice without recourse to the courts, and according to the relevant authorities and procedures.

1.1 Exceptions

The claims and ex gratia payments policy does not apply to the relocation of household property and travel claims, or to the traditional remedies to settle bidding or contract performance disputes. These are treated in the Treasury Board's Relocation Directive, the Travel Directive and the Contracting Policy.

However, if, after reviewing or applying traditional remedies in a contracting case, there exist exceptional circumstances and the Crown has no liability, an ex gratia payment may be considered under this policy. The approval of such a payment would be subject to the deputy head's discretion to designate authorized officials, determine the need for a legal opinion, and take into account the policy requirements governing liability and ex gratia payments and the sensitive nature of ex gratia cases.

Claims for recovery of losses of public money are governed by the Treasury Board Policy on Losses of Money and Offences and Other Illegal Acts Against the Crown.

1.2 Loss of services

As a general practice, the Crown does not claim for loss of services of its employees save for employees who are members of the Canadian Forces or the Royal Canadian Mounted Police.

1.3 Disbursements

Judgements against the Crown in either federal or provincial court in respect of matters falling within the scope of Part II of the Crown Liability and Proceedings Act are payable out of the Consolidated Revenue Fund as statutory expenditures pursuant to section 30 (1) of the Act upon production of a certificate of judgement. Similarly, judgements against the Crown in the Supreme Court of Canada are payable out of the CRF pursuant to section 98 of the Supreme Court Act. Departments should understand that the money paid on their behalf from the Consolidated Revenue Fund will eventually be accounted for either by transferring funds from a departmental appropriation or by seeking supplementary funding.

Fees for Crown witnesses; travel, legal and other expenses incurred by, or on behalf of, the department in preparing, prosecuting or defending a court case; out-of-court settlements; and liability and ex gratia payments must be charged to the appropriation of the department concerned.

When costs are awarded against the Crown by a judgement of the Federal Court, or of a provincial court when the case is within its jurisdiction, the costs are payable in accordance with the direction of the court.

Finally, it is important to recognize the distinction between a judgement in a proceeding brought before a court and a decision of a judge acting in a non-judicial capacity. Just as judges are often appointed as Commissioners of Inquiries or arbitrators in labour disputes, they may likewise be appointed as assessors or arbitrators under various Acts. A decision by a judge under, for example, section 57 (3) of the Health of Animals Act or section 41 (3) of the Plant Protection Act is not a court award and is not covered by the statutory authorities for court judgements.

1.4 Revenues

Departments should collect or enforce payment of a claim made by the Crown in accordance with the Treasury Board's Policy on Receivables Management. The money collected, including any insurance proceeds, should be deposited to the credit of the Receiver General and may not be credited back to an appropriation. An exception is the Standard Construction Contract, which describes how to deal with insurance proceeds arising from construction contracts. (Refer to the Treasury Board's Contracting Policy.)

2. Claims under the Canadian Human Rights Act

While following the mandatory provisions of the claims policy for the negotiation and payment of settlements and Tribunal Orders under the Canadian Human Rights Act (CHRA), departments should respect the investigation and conciliation procedures set out in the CHRA.

The procedures do not apply to complaints lodged under section 11 of the CHRA with respect to equal pay for work of equal value, which are dealt with through Treasury Board personnel policy procedures or other separate authorities.

While a discriminatory practice, as defined by the CHRA, is not a tort, the claims and ex gratia payments policy provides that departments must deal with a complaint lodged under the CHRA as if it were a tort.

For Tribunal Orders which are made Federal Court Orders, payments are a statutory charge against the Consolidated Revenue Fund under the Federal Court Act.

Deputy heads may, with discretion, designate payment approval authorities within their departments consistent with departmental practices and the sensitive nature of human rights issues.

3. Claims within and between departments and Crown corporations

3.1 Claims within a department

When no other department or non-government entity is involved in an incident resulting in damage to public property, compensation and restoration are the responsibility of the department. In very exceptional circumstances, interim financing may be available through Treasury Board contingency vote 5.

3.2 Claims between departments

One department of government cannot claim damages and receive payment from another department of the same government. The general rule is that damages shall be dealt with on the basis of mutual forbearance of claims.

3.3 Claims between departments and Crown corporations

3.3.1 The parties to claims between departments and Crown corporations are encouraged to arrive at a negotiated settlement. When a claim arises, each party should voluntarily supply the other with all information in its possession.

3.3.2 When it is found impossible to agree by correspondence on the claim's merits and liability, the legal officers of the department and of the corporation should attempt to arrive at an agreement.

3.3.3 If negotiation fails, the issues of fact and law on which there is disagreement should be submitted to the Deputy Attorney General of Canada, who could arbitrate the dispute through Department of Justice officials or appoint a third party to arbitrate the dispute.