Rescinded [2018-05-29] - Guideline on Claims and Ex Gratia Payments

1.1 This guideline takes effect on October 1, 2009.

1.2 It replaces appendices A, B and D of the Policy on Claims and Ex Gratia Payments (revised June 1, 1998)

2.1 The purpose of this guideline is to assist managers and staff to make better decisions and increase the efficiency, expediency and timeliness for settling and paying of claims by or against the Crown and against its servants and for processing ex gratia payments.

2.2 This guideline supports the Directive on Claims and Ex-Gratia Payments (hereafter referred to as the Directive).

2.3 Though this guideline elaborates on the Directive, it does not present any new mandatory requirements.

2.4 Claims can be classified as follows:

Claims within a department

When an incident resulting in damage to public property occurs within a department, compensation and restoration are the responsibility of the department. In very exceptional circumstances, interim financing may be available through Treasury Board Contingency Vote 5.

Claims between departments

As established under the Directive, one department of government cannot claim damages and receive payment from another department of the same government; therefore, as a general rule, damages are dealt with in a manner that precludes departments from seeking damages from each other (e.g., on the basis of mutual forbearance).

Claims between departments and Crown corporations

The Directive does not apply to claims between departments and Crown corporations. Nevertheless, parties to such claims are encouraged to arrive at a negotiated settlement. When a claim is pursued, it is recommended that each party voluntarily supply the other with all information in its possession.

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

As established by the Directive, if negotiation fails, the issues of fact and law on which there is disagreement are referred 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.

2.5 Exceptions include the following:

• The Directive does not apply to the relocation of household property and travel claims, or to the traditional remedies for settling bidding or contract performance disputes. These are treated in the Treasury Board's NJC Relocation Directive, Travel Directive and Contracting Policy.
• However after reviewing or applying traditional remedies in a contracting case, if there exist exceptional circumstances and the Crown has no liability, an ex gratia payment may be considered under the Directive. The approval of such a payment would be subject to the deputy head's discretion to designate authorized officials and determine the need for a legal opinion, while also taking into account the Directive's 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 Directive on Losses of Money and Property.

Definitions of terms used in the guideline can be found in Appendix A of the Directive.

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

4.2 A claim might result in an amount due (or alleged to be due) or the launch of an action for damages sustained by the Crown or a claimant.

4.3 A clear distinction is drawn between settlement and payment of a claim. Settlement is the 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.

4.4 Generally, claims are broadly categorized as those in tort and those in contract.

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

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

4.7 When a claim is made in tort (all provinces except Quebec) or extra-contractual liability (Quebec only), it is subject to the requirements of the Directive on Claims and Ex-Gratia Payments.

4.8 Generally claims by or against the Crown or against its servants are negotiated without recourse to the courts by, or in conjunction with, the Department of Justice in accordance with the relevant authorities and procedures.

4.9 A high level overview of the process for claims by the Crown and claims against the Crown is included in Appendix B and Appendix C, respectively.

5.1 The negotiation and payment of settlements and Tribunal Orders under the Canadian Human Rights Act (CHRA) are subject to the requirements of the Directive whereas the CHRA applies with respect to investigation and conciliation requirements.

5.2 The Directive's requirements do not apply to equal pay for work of equal value complaints lodged under section 11 of the CHRA. Such complaints are dealt with through Treasury Board personnel policy or other separate authorities.

5.3 A discriminatory practice, as defined by the CHRA, is not a tort, though it is recommended that departments deal with a complaint lodged under the CHRA as if it were a tort.

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

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

6.1 As established by the Directive, departmental security officers (DSO) are generally responsible for conducting or directing departmental claims investigations or assisting managers with the conduct of such investigations except when departments have special organizations established for this purpose. DSOs are also responsible for dealing with the appropriate law enforcement agency on such cases. Claims investigations are based on the type of incident and the dollar amount involved.

6.2 Further to the Directive's requirement that managers investigate incidents that could lead to a claim by or against the Crown or against a servant, it is recommended that the investigation be conducted at the earliest reasonable opportunity and that a report be prepared. While the level of investigation is to be commensurate with the dollar amount involved, it is recommended that the investigation includes, as is appropriate, the following:

• A full statement of the duties and responsibilities of any servant involved;
• Detailed information relating to the use of the Crown property and the relevant authority for such use;
• Statements about the incident from servants and other persons having any knowledge of the circumstances;
• Copies of any reports made to the police in connection with the incident;
• A complete account of the incident including a who was involved, what happened, where it happened, when it happened, how it happened and why it happened;
• Plans, sketches or photographs, as necessary, to contextualize or explain the nature and extent of the incident;
• Any additional information and material that may be required for a legal opinion;
• The assistance of the Royal Canadian Mounted Police; and
• The assistance of private sector claims adjustment services or collection agencies.