Federal court decertifies veterans’ class action for delay on pension benefits

The Federal Court of Appeal has decertified a $100-million class action brought by former members of the Canadian Armed Forces reserves whose retirement benefits were delayed.

The court ruled that the original order failed to identify the “common issues” that are required for certification. As well, the court concluded that the representative plaintiff, Douglas Jost, was not suitable as he was no longer a member of the defined class.

Still, all is not lost: the veterans will get another kick at the can. “While the certification was, technically speaking, reversed, the court did allow the class to amend its claims and bring the case back to the original judge for a redetermination,” says Adam Tanel of Koskie Minsky LLP in Toronto, co-counsel for the class. “It really just requires a fix.”

Read: Federal court certifies veterans’ class action for delay on pension benefits

And the “fix,” according to Tanel, won’t be onerous. “All that’s required are changes to the form of the certification order to include the common issues. And as for the representative plaintiff, either we’ll find a new one or amend the definition of the class so that it fits Mr. Jost.”

The case covers all members of the Reserve Force Pension Plan who were entitled upon release to immediate retirement benefits between March 1, 2007 to date. By 2016, when the plan’s administration was transferred from the armed forces to the public service, a backlog of 13,549 cases had accumulated.

Read: Canadian Armed Forces sued for $100M over ‘chronic’ pension delays

The new administration cleared the backlog within a year, but by that time members had suffered delays ranging from a few weeks to three-and-a-half years. In some cases, delays in transferring the CAF pension monies to private pension plans resulted in reductions in the value of the payouts.

By way of example, Jost, the representative plaintiff in the suit, was told just before his retirement in the spring of 2015 that the lump sum value of his pension was $859,980. A few weeks after his retirement on July 1, the value had dropped to $726,905, followed by a further reduction to $703,180 in October.

Jost — who alleges that he had been informed that payments would commence no later than 12 weeks after his retirement —  didn’t receive his first payment until January 20, 2016, when some 29 weeks had passed. He claimed he didn’t receive interest on the funds withheld and that he was forced to go into debt.

Read: Reimbursing benefits key unresolved issue for Veterans Affairs, says report card

The court found, however, that Jost had served in the regular force and contributed to the plan in that capacity. The plan stipulated that regular plan members were ineligible to participate in the reserve plan, thus excluding Jost from the defined class, which was limited to reservists.

According to Daniel Wallace, a partner in McInnes Cooper’s Halifax office and who has considerable experience representing veterans and other public service retirees in pension cases, it won’t be difficult to find a new representative plaintiff, if that proves necessary.

“It’s frequently not difficult to change a representative plaintiff, particularly when you’re dealing with the military, where members feel a great deal of responsibility for their colleagues,” he said. “Difficulty tends to arise where privacy is an issue, as in sexual-abuse class actions, but that’s not the case here.”

The real problem is that the appeal result has caused a further delay in the proceedings. “It’s ironic that we have more delay in a case about delay,” Tanel said. “But we’re going to move quickly to rectify the minor technical difficulties that have arisen.”

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