The Federal Court has certified a $100 million class action brought by former members of the Canadian Armed Forces reserves who alleged that the government illegally delayed their retirement benefits.
“There were 1,300 complaints to the CAF ombudsman between 2006 and 2017,” says Adam Tanel, an associate at Koskie Minsky LLP and co-counsel for the class.
The class action covers all members of the Reserve Force Pension Plan who were entitled upon release to immediate retirement benefits from March 1, 2007 to date. However, the precise size of the class won’t be determined until the federal government produces the relevant documents during the discovery process leading up to a trial or settlement.
“What is known is that, when the administration of the plan was transferred from the armed forces to the public service in 2016, there was a backlog of 13,549 cases which had accumulated over a decade but which the new administration cleared in a year,” says Tanel.
Jessica Lamirande, a spokesperson for the Department of National Defence, confirmed that no backlog currently exists. The service standard for commencement of pension payments was 45 days after retirement or 30 days after the pensioner had submitted all the required documentation, she added.
However, before the backlog was cleared, the delays ranged from a few weeks to three-and-a-half years. And in some cases, delays in transferring the CAF pension monies to private pension plans resulted in reductions in the value of the payouts.
As an example, Douglas 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 told payments would commence no later than 12 weeks after his retirement, didn’t receive his first payment until Jan. 20, 2016, when some 29 weeks had passed.
The class members maintain that government negligence, breach of contract and breach of fiduciary duty caused the delays. In concluding that the case was appropriate for certification, Justice James O’Reilly acknowledged there was a reasonable basis for all three alleged causes of action.
The most impactful ruling, however, relates to breach of contract. “Historically, governments have argued that the government has no contractual obligations to its soldiers,” says Tanel. “And while that has been historically correct for more than 400 years, the law may well be evolving to recognize that people who have a lifelong career in the military are serving pursuant to contracts with the government.”
If that’s correct, adds Tanel, it would create “an important bundle of rights” for all men and women in service.
At press time, it was unclear whether the federal government would appeal O’Reilly’s decision.