TORONTO — An appeal has been launched after an Ontario judge dismissed a multi-billion-dollar class-action lawsuit against the federal government that sought to compensate Canadian cattle producers for the economic damage wrought by the BSE crisis.
The suit alleges the Canadian government knowingly allowed cattle from BSE-infected herds in the United Kingdom to enter Canada between 1982 and 1990. Some wound up rendered into feed, which led to the domestic emergence of the disease in 2003. A single case turned up in an Alberta cow that year, prompting international borders to ruinously close to Canadian beef as a result.
BSE — Bovine Spongiform Encephalopathy — is otherwise known as Mad Cow disease.
Justice Schabas dismissed the plaintiffs’ case on January 28. The appeal was filed with the Ontario Court of Appeal in Toronto a month later. Where the original suit sought $8-billion, the appeal seeks $1.163 billion, in accordance with the judge’s estimation of the actual damages (though rejected).
“We were very disappointed with Justice Schabas’s ruling, particularly given the findings of fact that he made,” Duncan Boswell, senior partner with Gowling WLG in Toronto and lead counsel in the lawsuit, said by email.
In light of those findings “we have difficulty understanding how the government is not liable. As a result, we have received instructions to appeal the decision,” he wrote.
Boswell elaborated on the established facts that are key to the appeal:
“Justice Schabas found that the government expressly assured Canadian cattle producers that BSE would not enter Canada and would not be permitted to establish itself within Canada’s domestic cattle population. By making these statements, Justice Schabas found that the government was intending to reassure Canadian cattle producers that it ‘had the disease in hand’, and that ‘there was effectively no risk of BSE coming into Canada because of Agriculture Canada’s policies.’
“Justice Schabas found that there was ‘no question’ the government was aware in 1990 that some of the 182 previously imported UK cattle might be subclinically infected, and that this posed a risk to Canadian cattle through recycling in feed. Justice Schabas found that the government decided to monitor those 182 cattle, but the monitoring program was designed to only identify those animals that exhibited clinical symptoms. “The monitoring program was not intended to keep subclinical animals from being rendered and entering the feed chain.
“Importantly, Justice Schabas found the government knew in 1990 that the monitoring program ‘would not be effective in preventing subclinical imports from being slaughtered and rendered.’ As found by Justice Schabas, by the time anything showed up in any of the monitored animals, the disease was already spread.
“Justice Schabas further found that by 1990, the government ‘was fully aware of, and reasonably foresaw, the harm that BSE would, if it entered the Canadian herd, cause to the Canadian cattle industry and the Class.’ Justice Schabas quantified that harm at $1.163 billion in damages suffered by the Class, and found that these damages were caused by BSE being introduced into the Canadian feed supply by one or more of those monitored 182 UK imports.
The legal odyssey for the suit dates back to 2005 — 17 years ago — when the original claims were heard in four provinces before the effort moved to Ontario court exclusively. It was in 2005 that the U.S. allowed young Canadian cattle, under 30 months of age, back into its marketplace after a two-year border closure. Other countries shut out Canadian beef for much longer.
Beef Farmers of Ontario President Jack Chaffe commented that it’s been “a long, drawn-out court procedure.” Chaffe clarified that the BFO isn’t a party to the case and in his personal opinion, he doesn’t expect a win to come out of it.
But there is unfinished business still hanging around from the BSE crisis, the Mitchell-area beef producer pointed out. Canada remains at a competitive disadvantage with the U.S. as a result of Specific Risk Material feed regulations that are out of step with those south of the border. “It creates an imbalance for trade,” he said.
Likewise, the requirement to segregate Canadian cattle has made U.S. slaughterhouses “very hesitant” to process Canadian animals. The policy hits eastern Canadian beef producers, Ontario included, especially hard. “It was brought in place so we could regain trade access (after BSE), and we’re still stuck with it,” he said.