Court Issues Ruling On Costs In Elder Society Class Action feature image

Court Issues Ruling On Costs In Elder Society Class Action

Back in October we posted a story about a class-action lawsuit filed on behalf of people living in long-term care facilities in Alberta. In 2003, changes to the law were made to allow facilities to apply “accommodation charges” to people living in their facilities. The suit was led by the non-profit group The Elder Advocates of Alberta Society.

The decision at appeal

The plaintiffs argued that the increased charges were not limited to accommodation and meals, which are the categories under which facilities were able to apply higher charges to. The plaintiffs took the position that the charges went above and beyond what the costs of accommodation and meals. The case made its way to the Alberta Court of Appeal, where the court agreed with the trial judge’s decision that,

“… there is no statutory requirement that the accommodation charge have a reasonable nexus to the cost of accommodation and meals. Again, this is not to say that the Alberta government and the Minister are prohibited from implementing a scheme that attempts to create a ‘reasonable’ accommodation charge that is generally related to the actual cost of nursing home and auxiliary hospital accommodation and meals. My conclusion is that there is simply no statutory obligation to do so.”

In pursuit of costs

The government of Alberta, being successful at appeal, attempted to recover costs from the plaintiffs. The Alberta Court of Queen’s Bench recently issued a decision on this matter.

Alberta’s Rules of Court address how costs should be awarded in class action lawsuits. Section 10.32 of the Rules state,

In a proceeding under the Class Proceedings Act or in a representative action, the Court, in determining whether a costs award should be made against the unsuccessful representative party, may take into account one or more of the following factors, in addition to any other factors the Court considers appropriate:

(a)    the public interest;

(b)    whether the action involved a novel point of law;

(c)    whether the proceeding or action was a test case;

(d)    access to justice considerations.

After applying those factors to this case, the court determined the factors favour the plaintiffs, writing,

  • The action was brought on behalf of class members, residents of nursing homes and similar long-term care facilities, who are disadvantaged members of society, and who were required to live in these facilities because of their extreme medical needs.
  • The action related to a significant increase by the Province in the charge to reside in the long-term care facilities. The information relied on by the Province in authorizing the increase had been criticized by the Auditor General.
  • While the class members had a financial interest in the action, the extent of that interest – some thousands of dollars – clearly would not justify the action economically.
  • The action was brought and maintained at the initiative of an established Society which was an advocate for seniors’ rights, and by individuals who had personal interests as well as an interest in seniors’ rights.
  • The Plaintiffs’ law firm provided many hours of professional services and funded significant disbursements pursuant to the Contingency Agreement, which was approved by the Court.
  • The law firm agreed to indemnify the individual Plaintiffs, at their request, against an adverse costs award.
  • These arrangements between the law firm and the Plaintiffs were necessary for the action to proceed, but did not mean that the law firm was the driving force behind the action. The action was brought to the law firm by the Plaintiffs, not the other way around.
  • The action was in the public interest, both with respect to the interests of the class members and the potential to have a broader impact, by changing government practice relating to charges imposed on residents of long-term care facilities.
  • It was claimed that the increase in the charge was not valid under governing legislation and the Charter.
  • This claim raised a novel point of law. The validity of the charge had not been determined by the courts.
  • Although it was unsuccessful, the claim was meritorious. Access to justice required a trial to determine the issue.
  • The Defendants’ conduct in the proceedings did not contribute to, and arguably made more difficult, a quick and efficient resolution of the matter.
  • The costs claimed by the Defendants are clearly out of proportion, given the public interest, the novel point of law raised, and access to justice issues. Orders for costs claimed by the Defendants would clearly have a chilling effect on future class actions.
  • The Plaintiffs do not claim costs, notwithstanding significant costs incurred by their counsel.
  • The Defendants are better able to bear the costs of the litigation than are the Plaintiffs. A much reduced costs award would not significantly change the Defendants’ position; and would inappropriately penalize the Plaintiffs and their counsel.

This decision means that while not successful in stopping the application of new daily charges in long-term care facilities, the plaintiffs would not be on the hook for costs.

The Advocacy Team at HMC Lawyers has over 130 years of combined experience advising clients and litigating on their behalf. Our lawyers know that strategic action at an early stage can help settle matters early and expeditiously, and help prevent prolonged and expensive litigation. We work closely with clients to help them make good business decisions when facing a legal dispute.

To make an appointment with one of our lawyers about a commercial or business litigation matter, contact us online or call 1-800-480-3534.

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