Class Members Ineligible For A Settlement Denied The Right To Appeal

• Published date: 24 November 2020
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
• Law Firm: McCarthy Tétrault LLP
• Author: Canadian Class Actions Monitor and Patrick Williams

In Hébert v. Wenham, 2020 FCA 186, over a quarter of the class was ineligible for a settlement approved by the Federal Court. Several ineligible class members sought leave to appeal. The Federal Court of Appeal held that (i) the appeal was doomed to fail because of the deference owed to the settlement and the Federal Court and (ii) the ineligible class members could not opt-out. The case demonstrates the high burden on a class member who wants to overturn a settlement.

The case arises from the use of Thalidomide, a drug linked to birth defects. The federal government established a program to provide funds to children who survived. Mr. Wenham applied for inclusion in the program, but was rejected because the program effectively required individuals to prove beyond all reasonable doubt that they were eligible-a rigorous evidentiary threshold. He brought a class proceeding on behalf of all rejected applicants.

The parties ultimately agreed to a settlement where the federal government adopted less rigorous evidentiary requirements and other procedural safeguards as part of a new program. However, the new program was categorically restricted by birthdate-individuals born outside a defined period were ineligible.

42 of the 158 class members were born outside the relevant period and thus ineligible for the new program. The Federal Court nevertheless approved the settlement, noting that

If it was in the power of this Court, it would have struck out these date parameters but that would have put the Settlement in jeopardy. Regrettably, the Court is powerless to do anything about this issue, other than to encourage a compassionate reconsideration. A rejection of the Settlement would be unfair to the Class and others and is not...