18 December 2009
Diocesan Pastoral Centre
PROGRESS REPORT TO PARISHIONERS
Re: Class Action Settlement Agreement
PROGRESS REPORT TO PARISHIONERS
Re: Class Action Settlement Agreement
Much has happened since the regional meetings of Diocesan priests and Parish Pastoral Council leaders in August 2009. At those meetings, there were many questions about the legal process surrounding the Settlement Agreement. There were few parish leaders who questioned the legitimacy of the Settlement Agreement itself. Most seemed assured by a stringent due process that required claimants to prove their claims, not just make them. Victims seemed to have been similarly assured of a respectful legal process that tried not to re-victimize them. Despite huge financial sacrifice, parishioners seemed to appreciate that the Settlement Agreement was the right, necessary and cost effective thing to do.
Then came the shocking resignation of Bishop Lahey, and all that flowed from it. For the last few months, the Settlement Agreement has been put on the back burner, as both parishioners and priests reeled from a profound sense of personal and spiritual betrayal. Understanding and rebuilding relationships within the Church has preoccupied everyone over these last few months. That healing process remains a work in progress. Unfortunately, the time sensitive aspects of the Settlement Agreement must again be moved to the forefront.
Since the resignation, some parishioners have questioned the sincerity of the Settlement Agreement. The deal’s legitimacy can withstand any objective scrutiny, regardless of the personal status of Bishop Lahey. In this regard you are referred to the decision of Mr. Justice David MacAdam, certifying this class action and describing its rationale at www.dioceseclassaction.com.
The Settlement Agreement is a vehicle that delivers long overdue justice to victims of sexual abuse. It remains a testament of the right and better way to solve a horrific legal, pastoral, and spiritual scar on the Diocese of Antigonish. It is a cost effective Business Survival Plan that minimizes the risk of “death by litigation”. It maximizes the prospects of financial survival in the face of crippling lawsuits. It also remains a legally binding commitment. It is the best of very limited legal alternatives. Doing nothing is not an option.
December 4, 2009 was the deadline for those claimants who chose to ignore the Settlement Agreement and instead elected to pursue private lawsuits against the Diocese of Antigonish. The Press Conference convened by Mr. Philip Latimer is one such example of an opt out claimant. There are five others like him. These types of private lawsuits are not in the best interests of the Diocese of Antigonish. For those claimants who have chosen this unwelcome legal track, they can expect the Diocese to defend itself in the conventional manner, with full reliance on all defences available at law.
While all legitimate victims will be treated respectfully, those who have chosen this adversarial legal route, or seek inflated compensation or thinly veiled mini-inquiries, can expect none of the protections that exist under the Settlement Agreement.
December 18, 2009 was to be the next critical date. As has recently been reported in the media, the parties have already agreed that the triggering options to cancel the deal will not be exercised by either party. Class Representative Ron Martin has decided that class claimants will stick with the Settlement Agreement, even though it is expected that there will be more than 70 claimants by the March 10, 2010 deadline. The Diocese of Antigonish has also decided that it will honour the Settlement Agreement, despite the number of opt outs filed. Although one is too many, the Diocese anticipates having the financial capacity to defend the six threatened private lawsuits, should they proceed.
Since announcement of the Settlement Agreement, only one new name of an alleged abuser has come forward: the late Father Allan MacDonald. All other priests named by claimants in either the class action or private litigation have already been publicly identified.
There is one other potential legal twist that may unfold publicly in the next few weeks. The lawyer for Philip Latimer has threatened to file a Court motion to contest some portion or all of the Settlement Agreement. He has provided no details. The Diocese feels he should have done so immediately, rather than waiting until after the Settlement Agreement had been finalized. If he proceeds, he will be opposed by both parties to the Settlement Agreement. Unless directed otherwise by the Supreme Court, both parties intend to proceed with implementation as directed by the Court, without getting distracted by those with other agendas.
The Settlement Agreement itself was originally budgeted at a total cost of $15.5 million. That figure was intended as a worst case scenario for the Diocese and its parishes. An additional allocation will now be required for these private lawsuits. With further financial sacrifice and liquidation of assets, these new costs are considered manageable within the resources available. The Financial and Legal Advisory Committee is currently wrestling with how these threatened private lawsuits will affect the proposed pooling of parish and Diocese assets.
Based on present budget projections and planning, bankruptcy or insolvency can be avoided. Cash flow projections indicate there are sufficient hard assets amongst the Diocese and its parishes to respond to both the class action and the threatened private lawsuits. That said, many of the available assets are in the form of land and buildings, not cash and liquid investments. Many of these properties are not readily marketable. Others are core properties (defined as a parish church and an occupied glebe house), that would only be liquidated as an absolute last resort.
The funding model for both types of lawsuits (class action and private) is based on liquidation of existing assets, rather than requiring new fundraising initiatives. The first step will be to gather in or pool all available cash and investments, both from the Diocese and its parishes. Once that is completed, the next step will be to implement an orderly listing and sale of non-core properties of both the Diocese and its parishes. This sale of lands is expected to commence early in 2010.
While there appears to be sufficient assets to meet anticipated lawsuits, current cash flow requirements are under-funded and must be remedied. Deficits have developed within some parishes. With the pooling and liquidation of all of the accumulated investment wealth of the Diocese, investment income that has been used for operational expenses will disappear. With some 114 parishes and missions, there will be individual financial stressors at the parish level that will require the wisdom of Solomon to resolve.
The cumulative effect of these financial pressures is being carefully examined as part of an overall Strategic Plan. Now that the Settlement Agreement has been finalized, the professional accounting firm of Ernst & Young will be providing the Finance and Legal Advisory Committee some cash flow projections and recommendations on how best to meet the cumulative pressures of these expenses over the next three to five years.
To honour commitments made to the Supreme Court of Nova Scotia, and in accordance with Ernst & Young recommendations, the objective is to complete the pooling of all unrestricted liquid assets (bank accounts and investments) of both the Diocese and all parishes by no later than January 31, 2010. The earlier calculations done by Ernst & Young as of February 28, 2009 will remain the comparative starting point for such calculations. The Finance and Legal Advisory Committee has directed that meetings be scheduled with Parish Pastoral Council leaders and Finance Committees, to explain the complicated process that is to be followed.
Newly appointed Bishop Brian Dunn is scheduled to be installed on January 25, 2010. In the meantime, Archbishop Mancini remains Apostolic Administrator. Archbishop Mancini has expressed his faith and confidence in the recommendations of the Finance and Legal Advisory Committee, which consists of laypeople and clergy from within the Diocese. Committee members, listed below, will continue to advise and provide recommendations that reflect both the wishes and best interests of the Diocese and its parishioners. Its steadfast objective is to successfully steer the Diocese and its parishes through a complex maze of legal proceedings, with their associated financial implications. That challenge will continue to test the goodwill, patience, and generosity of all.
With a prayer for our diocesan church and one another, we remain your Financial and Legal Advisory Committee.
Financial and Legal Advisory Committee Members:
| Mr. Tom Langley, Chair Mr. Frank Gillis Mr. John Higgins Rev. Angus MacDougall |
Rev. Paul Abbass Mr. James Gogan, Jr. Ms. Irene Lefort Rev. Will MacPherson |