Rescinded [2009-10-01] - Policy on Claims and Ex Gratia Payment

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.

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.

2.2 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.

Note:

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.

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.

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.)

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.

3.1 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