Executive Summary: Key Legal and Evidentiary Issues

• Court approval of a historic class action settlement compensating deaf and hard-of-hearing former students for institutional abuse at Nova Scotia residential and day schools from 1913–1995.
• Determination that the structured settlement (including up to $36.24 million in direct compensation, plus funds for administration and collective redress) is fair, reasonable, and in the best interests of the class despite a survivor objection.
• Interpretation of the contingency fee agreement, particularly “collected compensation” and the “total value” of the settlement, to set a proportionate class counsel fee at 30%.
• Assessment of extensive evidence of counsel’s time, risk, opportunity cost, and litigation complexity to justify a fee of $12.53 million plus disbursements, representing a multiplier of about 2.7 on expected time.
• Evaluation of policy-like settlement mechanisms: Systemic Harms Payments, the Independent Assessment Process, verification through an attendance list, and reversion of unused funds to the defendants.
• Consideration of the propriety and implications of defendants directly paying class counsel fees and disbursements, with limited standing to make submissions on the fee approval issue.

Factual background and institutional context

This case concerns historic abuse experienced by deaf and hard-of-hearing children who attended specialized schools in Nova Scotia over most of the twentieth century. The representative plaintiffs, Richard Robert Martell and Michael Harry Gerald Perrier, brought the action on behalf of a broad class of former students of two key institutions: the School for the Deaf in Halifax and the Inter-Provincial School for the Education of the Deaf in Amherst. Over time, the Amherst school went through several name changes, including “Resource Centre for the Hearing Handicapped” and “Resource Centre for the Hearing Impaired,” eventually becoming part of the Atlantic Provinces Special Education Authority (APSEA). The plaintiffs alleged that the Province of Nova Scotia, through the Attorney General, and APSEA were negligent and in breach of fiduciary duty in the operation, supervision, and management of these schools. The claims encompassed a range of serious misconduct and failures, from physical and sexual abuse to systemic harms such as punishment for using sign language, deprivation of language and cultural identity, and long-term damage to education, emotional health, and future opportunities. Many class members were residential students, living at the schools and under the control of staff and administrators for extended periods, while others were day or vocational students. The time period at issue stretched from 1913 to 1995, meaning the underlying events were often decades old, with many records lost and many survivors elderly or deceased by the time proceedings were commenced.

Class action framework and certification

In September 2015, Martell and Perrier entered into a contingency fee agreement (CFA) with the Halifax law firm Wagners. The CFA provided that class counsel would be entitled to a fee calculated as a percentage of “the total value of any settlement or judgment to the class inclusive of any award of costs,” net of disbursements. The agreed percentages were 25% if the case resolved before certification, 30% if resolved after certification but before trial, and 33?% if resolved after trial commenced. In January 2016, a Notice of Action with Statement of Claim was filed against both the Attorney General (on behalf of His Majesty the King in right of Nova Scotia) and APSEA. On January 31, 2019, Justice Patrick J. Duncan certified the proceeding as a class action. The class was defined as all former students who attended and/or resided at one or both schools between 1913 and 1995, while “Eligible Class Members” were limited to those alive on or after January 31, 2019. The certification order further divided the class into three temporal subclasses, aligned with different institutional configurations and periods: early years at the Halifax school alone; an overlapping period where students might have been at Halifax or Amherst; and later years centered on the Inter-Provincial School and its successor resource centres. Certification marked a significant procedural milestone, recognizing common issues on liability and systemic harm while leaving room for individualized assessment of particular injuries. From the outset, the litigation presented substantial risks: proving historic abuse across multiple decades, piecing together partial archives and witness memories, and marshalling evidence sufficient to establish liability against public entities and an interprovincial education authority.

Negotiation of a comprehensive settlement

After certification, the parties engaged in extensive discovery and negotiations. In May 2024, they reached agreement in principle on key economic terms. A final settlement agreement was completed in May 2025 and fully executed on August 11, 2025. The resulting settlement is comprehensive and multi-layered, attempting to balance the need for systemic acknowledgment and individualized compensation against the realities of litigation risk and the defendants’ willingness to resolve the claims. At its core, the settlement requires the defendants to pay a Compensation Fund of up to $36,235,702 for direct payments to Eligible Class Members. This fund is divided into a Systemic Harms Payment (SHP) Fund of $14,130,702 and an Independent Assessment Process (IAP) Fund of $22,105,000. In addition, the defendants must fund a $3,000,000 Collective Redress Fund to support broader initiatives and benefits for the class as a whole, and a $2,500,000 Administration Fund to pay for the administration of the settlement, including the work of a third-party administrator. The settlement also provides honoraria of $15,000 each to the two representative plaintiffs in recognition of their long-term leadership and commitment. The court later treated these amounts collectively—Compensation Fund, Collective Redress Fund, Administration Fund, and honoraria—as having a maximum “total value” of approximately $41,765,700 for the purposes of assessing the reasonableness of class counsel’s fee.

Policy-like settlement terms and claims structure

Although this was not an insurance policy dispute, the settlement operates through a detailed distribution plan and schedules that function much like a bespoke compensation policy. Schedule “A,” the Distribution Plan, sets out the guiding principles and mechanics for allocating the funds. It recognizes two primary forms of compensation: Systemic Harms Payments and Independent Assessment Process Payments. Systemic Harms Payments are designed to compensate all Eligible Class Members who experienced systemic harms at the schools—harms rooted in the institutional environment and policies rather than specific, narrowly defined incidents. The plan acknowledges, for example, punishment for using sign language, language deprivation, emotional abuse inherent in discriminatory practices, and the enduring effects on education and social development. SHP awards are calculated based on years of attendance and the nature of student status (residential, day, or vocational), using tables and examples to illustrate pro rata entitlements. The Independent Assessment Process is reserved for claimants who endured specific, more severe abuses beyond systemic harm. It provides individualized compensation for physical, sexual, and other grave abuses, with awards organized into levels reflecting the type and severity of harm. Level 1 addresses serious but more contained harms; Level 2 covers long-lasting psychological, physical, or sexual harms, including conduct such as repeated sexual assault or severe physical violence. The plan includes award ranges for different levels, potentially reaching six figures in the most serious cases, and permits adjustments based on evidence of enduring trauma and functional impact. The settlement also sets out process “clauses” governing how claims are advanced and assessed. An independent administrator, Canadian Claims Consulting Inc., is appointed to oversee notice, receive and verify claims, and distribute payments. Eligibility is tied to an “Attendance List” of students; the administrator must cross-check claims against this list and, where necessary, seek additional information from claimants and APSEA. The IAP incorporates a Claim Facilitator role to assist survivors in presenting their experiences, minimizing procedural barriers and trauma. There are timelines, reconsideration procedures for certain SHP determinations, and a limited appeal avenue from IAP decisions, focused on clear and significant errors. Finally, the agreement contains a reversion clause: after the Final Claim Report, any undistributed portion of the Compensation Fund and any unspent portion of the Administration Fund (other than a guaranteed SHP minimum) will revert to the defendants. This feature means that while the defendants’ maximum potential exposure is fixed, the exact total to be paid to class members will depend on actual claim uptake and validation.

Settlement approval and response to objection

On the first motion, the court was asked to approve the settlement pursuant to section 38 of Nova Scotia’s Class Proceedings Act and to approve related steps including the Phase 2 notice plan, appointment of the administrator, use of the attendance list, dismissal of the action with prejudice on the effective date, and payment of the representative plaintiff honoraria. The judge had to be satisfied that the settlement was fair, reasonable, and in the best interests of the class. Only one objection was received from a living class member. The objector raised four main concerns: that the SHP amounts were too low given the long-term impacts on education, language, emotional health, and future opportunities; that IAP awards were also too low; that the estates of class members who died before January 31, 2019 should be made eligible; and that the class counsel fee was “extremely high” and out of balance with what many survivors would receive. The court acknowledged that, from an individual survivor’s perspective, the scheduled amounts might feel inadequate and that the exclusion of earlier estates might seem unfair. However, the judge emphasized the inherent nature of class actions: they are not designed to provide perfectly individualized justice, but to resolve mass harms through a common framework that necessarily involves compromise. The decision stressed that the representative plaintiffs and class counsel had to weigh complex and competing considerations, including the real risk that the defendants might insist on trial if dissatisfied with proposed terms. The court concluded that, taken as a whole, the settlement fairly balanced the interests of the class and the defendants and provided meaningful, accessible redress to survivors, especially given the historic and evidentiary challenges of the claims. Accordingly, the settlement, notice plan, honoraria, appointment of the administrator, and dismissal framework were approved.

Class counsel fee approval and costs reasoning

The second motion dealt with approval of class counsel’s fee and disbursements under sections 40 and 41 of the Class Proceedings Act. While the CFA contemplated that the class would pay counsel from the settlement, the settlement agreement itself shifted that burden to the defendants, who agreed to pay whatever class counsel fee and disbursements the court approved. This arrangement gave the class the benefit of counsel’s work without reducing the funds available for compensation. The key interpretive question was how to read “collected compensation” and “total value” in the CFA. The court accepted affidavit evidence that “collected compensation” was meant to guard against the risk of uncollectible judgments, not to narrow fee entitlement in a case where the defendants were fully solvent. It also adopted a broad, functional understanding of “total value,” counting not only the Compensation Fund but also the Administration Fund, Collective Redress Fund, and honoraria, because each had a clear, beneficial nexus to class members’ interests. On this basis, the court set the maximum total settlement value at approximately $41,765,700.33 for fee-calculation purposes. Class counsel sought a maximum fee of 30% of that amount, or $12,529,710.10, plus disbursements of $87,734.01 and HST of $12,427.39 (total disbursements $100,161.40). To test reasonableness, the court first examined time and risk. By late October 2025, Wagners had logged 6,231.71 hours at an average rate of $558, totaling about $3.47 million in time. Counsel reasonably projected a further $850,000–$1.5 million in work to complete administration and related tasks, bringing total expected time value to roughly $4.65 million. Comparing the requested fee to this figure yielded a multiplier of about 2.694, which the court considered within the acceptable range for high-risk, complex class proceedings. The judge also weighed the qualitative factors recognized in the jurisprudence: the legal and factual complexity of systemic institutional abuse going back more than a century; the real risk at both the certification and merits stages; the high degree of responsibility assumed by counsel; the importance of the issues to a large and vulnerable class; the significant opportunity cost in dedicating firm resources to a decade-long, contingent-fee case; and the very strong results achieved in terms of both monetary recovery and public accountability. In light of these considerations, and comparison with other approvals such as Estey and Gallant, the court held that a 30% fee on the total settlement value was fair, reasonable, and proportionate. It therefore approved a maximum class counsel fee of $12,529,710.10 and disbursements totaling $100,161.40, to be paid by the defendants in two instalments with a 20% holdback keyed to potentially reverting funds.

Final orders, successful party, and total amount

In its final orders, the court approved the settlement agreement, including the Compensation Fund, Collective Redress Fund, Administration Fund, and the $15,000 honoraria for each representative plaintiff, and directed that the action be dismissed with prejudice on the defined effective date. It confirmed the appointment of Canadian Claims Consulting Inc. as administrator and authorized the use of the attendance list for eligibility verification, thereby enabling the claims process for Systemic Harms Payments and Independent Assessment Process awards to proceed. On the costs side, the court approved, as against the defendants, a maximum class counsel fee of $12,529,710.10 plus disbursements of $100,161.40, to be paid directly to Wagners under the staged structure in the settlement. As a result, the plaintiff class represented by Martell and Perrier is the successful party: the defendants must fund up to approximately $36,235,702 in direct compensation to survivors, plus $3,000,000 in collective redress and $2,500,000 in administration, and must also bear more than $12.6 million in approved class counsel fees and disbursements. In aggregate, the court-approved framework creates a maximum financial exposure of about $54,395,571.83 in favor of the class side (including counsel and administration), although the exact total that will ultimately be paid in damages and related amounts cannot yet be precisely determined because the Compensation Fund is “up to” $36.24 million and any unused portion may revert to the defendants once all claims have been processed.