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Who Is Entitled to Unclaimed Trust Funds in a Class Action?


Written by on January 31st, 2013

Louise Moher

Associate 

In Canadian Red Cross Society (Re), 2012 ONSC 7124, the court was asked to determine who should receive the unclaimed trust funds of a class action settlement.

In September 2000, a class action was settled by the establishment of five trusts to pay individuals who allegedly received contaminated blood transfusions.

Eleven years later, the trustee sought directions from the court as to who should receive surplus funds held by the Claims Administrator. From over $68 million in the funds, approximately 164 cheques, totalling $483,983, were never cashed or the intended recipient could not be located. The uncashed cheques ranged in amount from $100 to over $10,000.    

The court was asked to consider three options for the distribution of the $483,983 in unclaimed funds:

Option A would direct the money to other known class members whose claims had been partially paid. That would result in an additional $750 per ascertained class member. A drawback was that if missing claimants later surfaced, the trust would be completely depleted. However, claimants were obliged to update their contact information and the missing claimants had failed to do so.

Option B involved the transfer of unclaimed funds to various government organizations in Canada and the United States where missing claimants were last known to reside. The organizations would hold the funds and try to locate the claimants. In some jurisdictions, unclaimed funds would eventually escheat to the government. The trustee proposed that after three years any unclaimed funds would be paid to a charity of his choice.  Class counsel supported this option.

Option C, which was a hybrid approach, involved the transfer of some funds to government organizations in Ontario, Quebec and British Columbia, with the remainder distributed to the partially paid claimants.

The court chose Option A. Guided by the principle of proportionality, the court considered the amount at issue and balanced the costs and benefits of each of the options. The court stated that the most appropriate direction would be one that provided the majority of the funds to class members. Options B and C had a chance of providing the funds to the intended recipients, however, they would involve time and expense and there was no guarantee that the missing claimants would be found. Further, the searches would be conducted by non-court supervised parties. The court found that Option A ensured that funds would go to class members. The court decided that any remaining balance was to be paid to a charity selected by the trustee in consultation with Class Counsel.

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