6. COMPREHENSIVE LEGAL SERVICES REPORT FOR THE PERIOD OCTOBER 1^ST TO DECEMBER 31^ST, 2011

Rapport général sur les services juridiques pour la pÉriode du 1^er OCTOBRE AU 31 DECEMBRE 2011

COMMITTEE RECOMMENDATION

That Council receive this report for information.

RECOMMANDATION DU COMITÉ

Que le Conseil municipal prenne connaissance du présent rapport.

DOCUMENTATION

1. City Clerk and Solicitor’s report dated 9 February 2012 (ACS2012-CMR-LEG-0001).

Report to/Rapport au:

Finance and Economic Development Committee

Comité des finances et du développement économique

and Council / et au Conseil

9 February 2012 / le 9 février 2012

Submitted by/Soumis par: M. Rick O’Connor,

City Clerk and Solicitor/Greffier et Chef du contentieux

Contact Person/Personne ressource : David White, Manager, Litigation & Labour Relations/ Gestionnaire, Division des litiges et du droit administratif

(613) 580-2424 x21933, david.white@ottawa.ca

City-Wide

Ref N°: ACS2012-CMR-LEG-0001

SUBJECT:	COMPREHENSIVE LEGAL SERVICES REPORT FOR THE PERIOD OCTOBER 1^ST TO DECEMBER 31^ST, 2011

OBJET :	Rapport général sur les services juridiques pour la pÉriode du 1^er OCTOBRE AU 31 DECEMBRE 2011

REPORT RECOMMENDATION

That the Finance and Economic Development Committee and Council receive this report for information.

RECOMMANDATION DU RAPPORT

Que le Comité des finances et du développement économique et le Conseil municipal prennent connaissance du présent rapport.

EXECUTIVE SUMMARY

This report details the work undertaken and results achieved by Legal Services in the fourth quarter of 2011. In keeping with the format approved by City Council on August 25^th, 2011, the Comprehensive Legal Services Report combines the former Claims Settlements, Litigation Record and External Legal Costs reports into a single comprehensive report.

In respect of all forms of litigation undertaken by the Litigation and Labour Relations Branch (civil, labour, OMB, human rights, etc.), the reported outcomes are consistent with prior reports and highlight the City’s preference to resolving matters without the expense of full proceedings. Nevertheless, the litigation outcomes also reflect the fact that, where the City does not resolve a case through a mutually-agreeable settlement, its rate of success is very high, with favourable decisions or orders in 18 of 20 cases.

The Corporate, Development and Environmental Law (CDEL) Branch of Legal Services continued its support of a number of key City initiatives in Q4 2011, including the Rink of Dreams project and the Plasco Inc. Waste Conversion Agreement approved by Committee and Council in December. The CDEL Branch drafted or reviewed 230 agreements in Q4 and processed more than 100 development requests.

In terms of outsourcing costs, these continue to be driven by significant capital projects, such as Light Rail. Unanticipated legal costs, associated with matters such as the Friends of Lansdowne Inc. litigation, resulted in an approximate $800,000 year-end deficit in the Legal Services budget. Nevertheless, Legal Services staff continued to explore and implement a variety of cost-saving initiatives in Q4 2011, including a reduction of one position in the Claims Unit, which are not expected to impact service levels.

In response to the October 2011 release of the Toronto Ombudsman’s report on that city’s claims adjudication processes, staff of the Litigation and Labour Relations Branch undertook a review of that report and a comparison to the City of Ottawa’s own processes. This review showed that, while the City of Ottawa’s process of investigating all claims to assess the extent of liability does not cause the same problems with fairness identified in the Toronto Report, the City of Ottawa could improve the information that is provided to members of the public relating to the claims administration process. In addition, the adoption in Ottawa of several of the Toronto Ombudsman’s recommendations relating to how the municipality deals with claims for damage allegedly caused by private contractors, would improve service to the public and reduce the confusion associated with such claims.

RÉSUMÉ

Le présent rapport expose en détail les travaux et les résultats des Services juridiques au dernier trimestre de 2011. Suivant le modèle approuvé par le Conseil municipal le 25 août 2011, le rapport global des Services juridiques regroupe les rapports sur les demandes de remboursement, le bilan des litiges et les frais judiciaires externes.

En ce qui a trait aux formes de litiges traités par la Direction des litiges et des relations de travail (affaires civiles, travail, CAMO, droits de la personne, etc.), les résultats correspondent à ceux des rapports antérieurs et viennent mettre en lumière la préférence de la Ville à résoudre les litiges à l’amiable. Toutefois, l’examen de l’issue des litiges révèle également que lorsque la Ville ne parvient pas à une entente qui convient aux deux parties, son taux de succès est très élevé : en effet, elle a obtenu une décision ou une ordonnance en sa faveur dans 18 affaires sur 20.

La Direction du droit administratif, du droit de l’aménagement et du droit environnemental des Services juridiques a continué de soutenir certaines des principales initiatives municipales au dernier trimestre de 2011, y compris le projet de la Patinoire de rêve et l’entente sur la conversion des déchets de Plasco Inc., qui a été approuvée par le Comité et le Conseil en décembre. La Direction a rédigé ou examiné 230 ententes au quatrième trimestre, et elle a traité plus de 100 demandes d’aménagement.

Les coûts de sous‑traitance demeurent stables avec d’importants projets d’immobilisations en cours, comme celui du train léger sur rail. Des frais juridiques imprévus, notamment ceux découlant du litige lié aux Amis du parc Lansdowne, ont causé un déficit de fin d’exercice d’environ 800 000 $ dans le budget des Services juridiques. Le personnel a quand même continué d’explorer et de mettre en œuvre toute une gamme d’initiatives de réduction des coûts au quatrième trimestre de 2011, y compris la compression d’un poste à l’Unité des réclamations, ce qui ne devrait avoir aucune incidence sur les services.

Après avoir examiné le rapport de l’ombudsman de Toronto au sujet des processus municipaux d’évaluation des demandes, publié en octobre 2011, le personnel de la Direction des litiges et des relations de travail a comparé les processus utilisés à la Ville de Toronto et à la Ville d’Ottawa. L’exercice a démontré que le fait que la Ville d’Ottawa examine toutes les demandes pour évaluer l’étendue de la responsabilité de chacune des parties n’entraîne pas les mêmes problèmes d’équité que ceux relevés dans le rapport sur la Ville de Toronto, mais que la Ville d’Ottawa pourrait mieux informer le public au sujet du processus de gestion des demandes. De plus, il semble que l’adoption par la Ville de plusieurs recommandations du rapport de Toronto concernant la façon dont la municipalité traite les demandes pour des dommages prétendument causés par un entrepreneur privé permettrait de mieux servir le public et de réduire la confusion associée à ce type de demandes.

INTRODUCTION

The inaugural Comprehensive Legal Services Report covering the first and second quarters of this year was approved by City Council on August 25^th, 2011. The new report format originated from a Motion that was passed by Council on April 27^th, 2011, that directed “the City Clerk and Solicitor to combine the existing Claims Settlements, Litigation Record and External Legal Costs reports into a single comprehensive report”.

The information provided herein is with respect to the fourth quarter of 2011. While the Litigation and Labour Relations Branch also represents the Ottawa Police Services Board in litigation, information related to these matters, including outcomes, is reported quarterly to the Police Services Board.

Litigation and Labour Relations Branch

In keeping with the format developed as part of the initial Comprehensive Legal Services Report, outlined below is the litigation record for the Branch for the 2011 fourth quarter, as well as an overview of the claims concluded in that same period.

The report also provides a breakdown of the range and volume of civil litigation currently being handled by the Branch, as well as information on whether carriage of these matters rests with the Branch’s in-house legal staff or with external counsel.

(a) Labour Relations

Figure 1

Reasons for Unsuccessful Outcome:

The only unsuccessful labour arbitration outcome in Q4 involved a grievance alleging a breach of the contracting out provisions of the collective agreement. The arbitrator concluded that the City’s failure to give proper notice to the union of the contracting out of work involving the installation of radios in 2007 was an “honest mistake”. Therefore, though the arbitrator found that there was a technical violation of the collective agreement and issued a declaration to that effect, no other remedy, including any monetary damages, was awarded. As this case was specific to the facts, there were no broader implications associated with this unsuccessful outcome.

(b) Claims Unit

Figure 2

Figure 3

*Note: These are non-litigated claims, being claims settled prior to receipt of a Statement of Claim

Claims concluded over $100,000 – Q4 2011

Department	Category	Claim Type	Amount
Public Works	Bodily/Personal Injury	Injury/Damage on Pathways	$321,731.62
Environmental Services	Property Damage or Loss	Motor Vehicle Accident	$361,006.21
Transit Services	Property Damage or Loss	Motor Vehicle Accident	$101,944.06
		TOTAL:	$784,681.89

Specific details with regard to these claims are confidential in keeping with standard settlement practices. As a result, a confidential memorandum will be provided to Members of Council detailing the specific circumstances and facts surrounding these settlements under separate cover.

(c) Litigation Unit

2011 Litigation Claims

In Q4, 46 new Statements of Claim were received by the Litigation & Labour Relations Branch. With these, there are currently 274 outstanding civil proceedings against the City that are being handled by the Branch. Of these 274 open files, carriage of 249 rests with the City’s in-house Legal staff, with the remaining 25 having been referred to external counsel. Of this latter category, 10 have been referred to external counsel at the direction of the City’s insurer, with the remainder having been outsourced largely due to the scope and/or complexity of the litigation.

Figure 4

Reason for Unsuccessful Outcome:

This case involved an employee’s appeal of a decision by the Workplace Safety and Insurance Board (WSIB) to the Workplace Safety and Insurance Appeals Tribunal (WSIAT). Though the WSIB had ruled that the injuries received by the employee during an assault were not work-related in the circumstances (the employee was assaulted by a stranger when he was approached in a store parking lot), the WSIAT disagreed, based on the fact that the employee had been returning to his private vehicle to get his driver’s license (a requirement of his job). The Workplace Safety and Insurance Appeals Tribunal determined that the employee’s injuries were sustained during the course of his employment and benefits were therefore payable.

In light of the unique circumstances of the case, and as entitlement decisions are made by the WSIB and not the City, this outcome has no further implications for the City.

Corporate, Development and Environmental Law Branch (“CDEL”)

The CDEL Branch, in the final quarter of 2011, continued to provide legal support for important strategic initiatives of the City. Some of the highlights of the extensive and varied services provided by in-house legal staff include the following:

1. The successful negotiation of a long-term Waste Conversion Agreement with Plasco Inc. which was approved by Environment Committee and Council in December 2011;

2. Worked with Infrastructure Services in obtaining NCC approval for the Rink of Dreams project;

3. The Presto Smart Card initiative was finalized;

4. Continued to provide ongoing support for key public health initiatives;

5. Assisted in the review, analysis and drafting of a revised new special events by-law;

6. Assisted REPDO in the sale of property by Ottawa Community Lands Development Corporation (“OCLDC”) (from the City to OCLDC and from OCLDC to third party);

7. Helped to finalize agreements with the Canadian Academy of Recording Arts and Sciences (“CARAS”) for the JUNO awards to be held in Ottawa in 2012;

8. Worked with the Finance Department to identify and designate appropriate Municipal Capital Facilities, thereby reducing the cost to the City of the Facilities’ operations; and

9. Provided Preventative Law Training on Planning and Development matters to Planning staff.

A summary of key in-house CDEL metrics for Q4 is set out below in table form.

CDEL - Q4 STATISTICS

Corporate/Commercial Agreements & Contracts Reviewed/Drafted	230
Reports Reviewed/Drafted	73
Real Estate Purchases	11
Real Estate Sales	15
Tax Sale Registrations and Payments Out of Court	130
By-Laws Reviewed/Drafted	27

CDEL – PLANNING AND DEVELOPMENT - Q4 STATISTICS

Development Agreements Initiated
Subdivision	3
Site Plan Control	33
Condominium	9
Other	11

Miscellaneous Development Requests Processed
Severance	22
By-laws (Road Opening/Closing)	18
Releases/Development Charge Deferrals	22
Compliance	23
Part Lot Exemption	15
Early Servicing	1

*The Statistics for the Development Agreements do not include associated registrations such as transfers, easements, maintenance and liability agreement, joint use and maintenance, inhibiting orders. Twenty-eight subdivisions were registered during 2011, six of those in Q4.

External Legal Costs

The fourth quarter external legal costs are set out below:

Law Firm	Portfolio/ Practice Area	Legal Fees	Taxes	Disbursements	Total
*Bell, Temple	Insured Litigated Claim	$ 420.00	$ 55.05	$ 3.50	$ 478.55
Borden, Ladner, Gervais	Corporate/ Commercial/ Development	$ 290,948.85	$38,253.46	$ 3,870.39	$ 333,072.70
*Borden, Ladner, Gervais	Light Rail Transit Project	$1,027,276.80	$138,270.24	$37,100.50	$1,202,647.54
*Gowlings	Insured Litigated Claims	$ 24,234.75	$ 3,445.13	$ 2,254.33	$ 29,934.21
Heenan, Blaikie	Litigation & Labour/ Employment Law & Insured Litigated Claims	$ 310,183.00	$ 40,936.32	$ 5,158.76	$ 356,278.08
Hicks, Morley	Labour/ Employment Law	$ 56,074.00	$ 7,349.57	$ 842.15	$ 64,265.72
*Lerners	Insured Litigated Claims	$ 6,333.00	$ 1,245.31	$ 3,251.28	$ 10,829.59
*McCall, Dawson, Osterberg	Insured Litigated Claims	$ 0	$ 68.09	$ 523.75	$ 591.84
McMillan (formerly Lang,Michener)	Corporate/ Commercial/ Development	$ 90.00	$ 5.03	$ 78.60	$ 173.63
*Smockum Zarnett Percival	Insured Litigated Claims	$ 4,497.50	$ 723.63	$ 1,068.82	$ 6,289.95
Soloway, Wright	Corporate/ Commercial/ Development	$ 872.00	$ 115.10	$ 13.40	$ 1,000.50
Weir and Foulds	Litigation – Urban Boundary	$ 19,000.00	$ 2,854.33	$ 2,956.41	$ 24,810.74
Total		$1,739,929.90	$233,321.26	$ 57,121.89	$2,030,373.05

*Note: Not all of the costs above are charged to the Legal Services budget, namely, the costs with respect to the Ottawa Light Rail Transit Project and insured litigated claims.

Accountability and Transparency

At its meeting of August 25^th, 2011, Council approved that the $1,950,000 Ottawa Lynx settlement be applied to Legal Services to offset an identified deficit anticipated as a result of four litigation matters, namely: Friends of Lansdowne Inc., Urban Boundary, Ottawa Lynx and Keefer Regulator.

At year end, costs associated with the above, in addition to further unanticipated legal costs described below, have resulted in an approximate $800,000 deficit for 2011. With respect to the four matters noted above, the costs to date are as follows:

1) Friends of Lansdowne Inc. Litigation - $1,255,000 (2010 accrued and 2011 costs - all paid in 2011)

2) Urban Boundary OMB Hearing Costs - $330,000

3) Ottawa Lynx Litigation - $211,275

4) Keefer Regulator Litigation - $313,600

Total = $2,110,000

The $1,950,000 Ottawa Lynx settlement did not cover the entire anticipated costs of the four litigation matters, resulting in a $160,000 shortfall. In addition, another $600,000 in unanticipated costs were incurred with respect to labour arbitrations ($205,000); an employment litigation matter ($200,000) and the Lansdowne Partnership Plan ($173,000).

Within the overall City Clerk and Solicitor Department budget, this deficit has been offset to some extent, with the result being a $259,000 departmental deficit.

Notwithstanding the year-end deficit, the Legal Services function within the City Clerk and Solicitor Department implemented a number of cost-saving initiatives in 2011 as follows:

· In establishing a more “mobile workforce”, Information Technology Services exchanged the desk top computers of all Legal Services Lawyers, Articling Law Students, Prosecutors and Labour Relations Consultants/Program Managers with laptop computers. The ability to access information through the City’s network enables Legal Services’ staff to work and be connected to the office while at hearings, mediations, negotiations, etc. As a result of this automation measure, Legal Services’ staff frequently work evenings and weekends – from both the office as well as their homes. The 2011 unpaid staff overtime (using the SAP time docketing system) is equal to more than three FTEs.

· Due to changes to the Law Society of Upper Canada’s (“LSUC”) rules, mandatory completion of 12 hours of Continuing Professional Development (“CPD”) was a challenge for Legal Services. However, it was addressed through group viewings of webcasts presented by the LSUC, the Canadian or Ontario Bar Associations or private continuing legal education providers. By eliminating travel, taking advantage of group discounts and supporting the City’s expanding use of technology, the staff training budget was able to accommodate the requisite 12 hours of CPD for each Lawyer within the Department.

· As a result of two retirements within the Claims Unit in 2011, an informal organizational review took place, which concluded in the elimination of one Claims Investigator FTE. Through anticipated improved technological improvements (i.e. the RiskMaster Project) and realignment of workloads, the elimination of the one FTE is not anticipated to impact service levels or turn-around time.

· Legal Services hires two Articling Law Students each year to carry out the majority of Small Claims Court litigation and Provincial Offences Act prosecutions (i.e. Building Code Act, Fire Services Act, etc.). An Articling webpage was developed by Legal Services staff for the City’s ottawa.ca website, which was a cost efficient and effective means of reaching out to more diverse candidates. Not only did the webpage allow Legal Services to reach a broader audience, but with the statement regarding the City’s commitment to diversity, equity and inclusion highlighted at the beginning of the webpage, the response was a pool of candidates from 31 law schools throughout Canada, the USA and abroad. The number of applicants more than doubled from the previous year.

· In further embracing the City’s commitment to utilizing technology to improve operations and create cost efficiencies, the number of paper-based subscriptions ordered for the legal library was drastically reduced in 2011. In addition to free websites such as e-Laws, Legal Services utilizes a web-based tool for the purposes of case law and statute research. By using these on-line research capabilities and the County of Carleton Law Association’s extensive library housed within the Provincial Courthouse building next to City Hall, staff were able to obtain the information required in a cost-effective manner.

· The local transportation budget for Legal Services was overspent in 2011. This was largely due to the amount of travel that takes place between City Hall (where the vast majority of staff are located) and the various City buildings where clients are located. In order to meet client needs and mitigate the rising cost of local transportation, Legal Services has now enrolled a number of staff into the VRTUCAR program. VRTUCAR not only supports the City’s Transportation Master Plan, but should also reduce parking and travel costs.

In keeping with the Department’s employee engagement strategy, staff are invited to provide suggestions and ideas on ways to improve productivity, efficiency, morale and the working environment. Many of the outcomes noted above, began as a staff suggestion or idea. The collective work of both Legal Services and City Clerk staff represents a valuable commodity for the City and its citizens, and adopting a culture of “continuous improvement” can only increase that value, while minimizing costs.

ADDITIONAL ITEMS

(a) Toronto Ombudsman’s Report on Claims

In October 2011, the City of Toronto’s Ombudsman, Fiona Crean, issued a detailed report entitled “Potholes, Flooding and Broken Branches: How the City Handles Your Claims – An Investigation into the Processing of Third Party Liability Claims Under $10,000”. The 54-page report was critical of the City of Toronto’s claims handling processes and perceived unfairness in how claims were adjudicated. Ultimately, the Ombudsman concluded that the “litany of concerns revealed by [her] investigation about the actions of the City and the adjusters are shocking examples of poor service”. Furthermore, the Ombudsman made ten recommendations to enable the City of Toronto to bring its claims handling processes in line with its stated commitment to open and transparent government.

The Toronto report was prompted by the “steady stream” of complaints lodged with the Ombudsman’s office about the City’s handling of liability claims. Recognizing that liability claims are inherently adversarial in nature, Ombudsman Crean noted that the matter at issue was not whether the City was, in fact, liable, for the losses claimed. Rather, the investigation was founded on the ombudsman’s “fairness lens”,

Fairness is about the process by which a decision is made. Information and policies about services should be accurate, clear and understandable. Residents should be given proper notice of information that could affect them. Decisions should be timely and explained with clear and understandable reasons.

* * * * *

Fairness also concerns the nature of the decision itself, for example, whether policy was followed, or the decision was based on clear criteria and a proper consideration of relevant facts.

It was this last aspect of fairness, namely the thoroughness of the investigation of such claims, that is the focus of the Ombudsman’s report.

As previously advised, the Litigation and Labour Relations staff have reviewed the Ombudsman’s report in light of the City of Ottawa’s own claims handling processes, both for purposes of comparison as well as to determine whether there are any “lessons learned” that can be used to help refine the Branch’s own processes. The results of that review are described below.

At the outset, it should be noted that the City of Toronto and the City of Ottawa have adopted very different organizational models for the processing of claims. In Toronto, claims are handled through an external adjuster paid based on a flat-rate per claim basis. Toronto’s Ombudsman found that this arrangement encouraged minimal investigation by the external adjuster and fostered a culture of denial of claims. Conversely, the vast majority of the City of Ottawa’s claims are handled by in-house staff in the Claims Unit, which forms part of the Litigation and Labour Relations Branch of the City Clerk and Solicitor Department. In extraordinary cases, such as the 2009 flooding event, where the number of claims received exceeds the Unit’s ability to respond within reasonable timeframes, the City does have external resources available. Similarly, the City may make use of external adjusters for matters where an immediate investigation is necessary outside of regular business hours, thus ensuring that it need not have staff available on-call. Unlike the City of Toronto, Ottawa’s external adjusters (retained through a competitive process) are paid based on an hourly rate, as opposed to the per-file arrangement that the Toronto Ombudsman found to underlie the unfairness of that city’s process.

As noted in the August 2011 Comprehensive Legal Services Report (ACS2011-CMR-LEG-0014), Ottawa’s Claims Unit adjudicates claims based on an assessment of the extent of the City’s possible legal liability:

Claims Assessment Criteria

As noted above, all claims submitted to the City are adjudicated based on the extent of the City’s legal liability for the losses claimed. In some cases, this can be straightforward, such as where a City vehicle is involved in a collision with another vehicle. In such cases, the statutory rules governing the apportionment of liability determine the extent of the City’s responsibility. In other cases, the City’s liability is not so clearly defined and assessment of the claims may require an investigation of the circumstances giving rise to the loss and also of the City’s statutory and common law obligations.

The reliance on legal liability as the basis for the evaluation of claims is in keeping with the provisions of the City's insurance policies and reflects the same considerations that would inform a legal assessment in the court system. It serves to ensure that, while claimants may feel that the City is morally responsible for their loss, all claims are considered fairly and in accordance with the same legal criteria.

Notwithstanding the Claims Unit’s efforts, some claimants will disagree with the assessment of the extent of the City’s legal responsibility for their losses. In such cases, the claim may become a lawsuit with the claimant commencing formal proceedings before the courts in an effort to obtain compensation. However, Legal Services’ integrated approach to dealing with claims, based on applying the same assessment criteria from receipt of a claim through to a full court proceeding, is designed to limit the overall legal costs of both claimants and the City and to ensure fair and consistent treatment of claims submitted by Ottawa residents and businesses.

As stated in its title, the Report by Toronto’s Ombudsman is centered around three principle types of cases: pothole claims; sewer backup claims; and tree claims. This examination reflects, in large measure, the fact that these types of claims form the majority of high volume/low-value claims against the City of Toronto. Similarly, pothole, sewer and tree claims are also the predominant category of claims under $10,000 against the City of Ottawa. Given that, set out below is a summary of how Ottawa’s claims processes compared to those of the City of Toronto.

Potholes

In her investigation, Ombudsman Crean found that the City of Toronto routinely denied claims for damage caused by potholes without any kind of proper investigation. She noted that the external claims adjudicators issued standard form denial letters to virtually all claimants, stating that Toronto had met its obligations under the minimum maintenance standards established by the Municipal Act, 2001, and there was therefore no liability on the part of the City. The Ombudsman’s investigation found that this was a presumption based on a “blanket assurance” from the Transportation Department that it always met the minimum standards. When interviewed, staff in Toronto’s Transportation Department denied that they had, or that they could, provide such a blanket assurance.

More importantly, the Ombudsman found that, the fact that no investigation had been done on pothole claims, was contrary to fundamental principles of fairness. In addition, she concluded that this also contradicted the clear statements in letters to claimants noting that an investigation had found no negligence on the part of the City of Toronto.

As one of the first steps following receipt of a claim for damage caused by a pothole, the Claims Unit in the City of Ottawa begins an investigation based on documentation supplied by the Public Works Department, as well as the City’s Call Centre. This internal investigation is aimed at determining whether the City had received any prior notice of the problem and, if it had, what steps had been taken to correct it. As the City’s liability is founded on the answers to those questions, this information is critical to a proper determination of whether the City is legally responsible for the losses claimed. Although the need to collect this information can mean that a response cannot be issued immediately upon receipt of the claim, it does ensure that the claim is properly adjudicated based on an assessment of the extent of the City’s legal liability, if any.

Sewers

As in the case of pothole claims, the Toronto Ombudsman found that the City of Toronto issued automatic denial letters for sewer claims in those cases where the backup was a result of a storm. This analysis, namely a review of the weather data for the date in question, constituted the full extent of the investigation by the City’s external adjusters. Once again, the Ombudsman found that the City of Toronto’s failure to conduct a complete investigation ran contrary to fundamental fairness principles.

The distinction between the Toronto example and the City of Ottawa’s process for the review of sewer claims is perhaps best exemplified by the rainfall experienced in the City on July 24, 2009. As a result of that significant storm, the City received more than 800 claims for sewer backups and basement flooding. The City undertook a comprehensive study of the causes of the flooding experienced in July 2009, which resulted in the tabling of the “July 24, 2009 West-end Flooding Investigation Action Plan Report” (ACS-2011-ICS-INF-0006) before the Environment Committee and City Council in the summer of 2011. Although the investigation concluded that the City’s infrastructure was designed, operated, and maintained in keeping with prevailing standards and that the City was therefore not legally liable for the flooding, the extent of the review was clearly more rigorous than that which drew criticism in the City of Toronto.

Falling Trees/Tree Branches

The Toronto Ombudsman was also critical of the City of Toronto procedures for dealing with tree damage claims. The Ombudsman found that all claims for damage caused by trees are automatically denied if Environment Canada records show that there was a storm or wind event on the date the damage was suffered. Once again, this type of minimal investigation was not viewed as being sufficient by the Ombudsman.

The City of Ottawa claims investigators also consult the weather records for the date of a tree damage claim, however, they also request records concerning the tree from Forestry Services Branch of Public Works. Our investigators look for other indicators of possible liability such as whether the City had received notice of any previous problems with the tree, the dates of inspections and the health of the tree as noted by Forestry staff.

The City’s review process for tree claims is designed to determine whether there was any evidence of negligence on the part of the City with respect to the maintenance and care of the tree or whether the damage simply resulted from the impact of high speed winds on an otherwise healthy tree.

Claims involving Contractors

As is the case in the City of Toronto, many municipal services in Ottawa are delivered by a blend of in-house staff and private contractors. In the case of capital projects, the use of private contractors has proven to be a cost-effective approach which provides the flexibility necessary to allow the City to take advantage of temporary funding provided by other levels of government, such as the recent Federal Infrastructure Stimulus Program.

The Toronto Ombudsman found that the problems with claims arising from the activities of private contractors working on behalf of the City of Toronto were related largely to the failure of the public to understand, or accept, that they were required to pursue their claims with the private contractors. The Toronto Ombudsman noted that residents wished to deal directly with the City of Toronto and also pointed out instances of long delays or lack of response from private contractors to damage claims received from the public.

The City of Ottawa includes similar indemnification and save harmless provisions in its contracts as the ones used by the City of Toronto. In fact, many Canadian municipalities use these type of standard contractual clauses.

The rationale behind such indemnification provisions is sound. The contractors have control over, and responsibility for, their staff and activities and, therefore, should accept liability for any damage arising from the negligence of their staff or their negligent activities. As identified by the Ombudsman with respect to Toronto, the difficulties that also seem to arise in Ottawa concern the public’s understanding of the need to deal directly with contractors and possible shortcomings in the steps taken by contractors to respond to claims.

In Ottawa, staff do not generally have access to sufficient information to properly review claims arising from the activities of private contractors. Basic principles of fairness require that private contractors must also be allowed the opportunity to investigate and respond to claims that are based on allegations of negligence on their part. For these reasons, our claims investigators will continue to refer claims to private contractors and their insurers.

The areas where the City could improve its practices are better communication to the public of the process to be followed in pursuing a claim against a contractor working on behalf of the City and tracking of contractor claim responses as a part of the standard contractor performance evaluation carried out by City staff. The public needs to be better oriented by the City about the reasons they must bring claims directly against contractors. Furthermore the contractors need to be accountable for the quality and timeliness of their responses to claims received from residents of the City of Ottawa.

The information about claims on the City of Ottawa website will be updated to provide a better explanation of the legal relationship between private contractors and residents of Ottawa. The process followed in investigating claims against contractors can also be better explained on the website. These steps will clarify potential areas of misunderstanding concerning the City claims process that may currently exist in the minds of residents. A more clearly explained process should benefit both City staff and the residents of Ottawa.

Contractors also need to be aware that the evaluation of the level of their performance on City contracts will include an assessment of the manner in which they deal with claims for damages arising from their activities. The delivery of good quality infrastructure projects must include good service to the public as well as top quality construction. The Claims Unit will work with operational staff to ensure that claims information is provided to the project managers who deal directly with contractors and assess their performance on City projects.

An example of perhaps less than optimal communication of the relationship between potential claimants, private contractors and the City of Ottawa was the King Edward Reconstruction project. In the course of that project, several residents brought forward issues concerning alleged foundation or structural damage to their homes. In accordance with standard procedures, the residents were referred to the private contractor who was responsible for the construction work.

The consultant and insurer for the contractor ultimately responded to the residents and, in each case, pointed to pre-construction surveys of the properties and vibration monitoring studies as justification for denying the claims. While the claim denials were not accepted by the residents, the issue that emerged through the claim process was the failure of the private contractor to provide the pre-construction surveys and vibration studies to the residents. City staff took steps to ensure that the information was received by the residents, however, significant time passed while the information was obtained and provided to the residents.

The standard provisions used in City construction contracts entitle the City to have a copy of such vibration studies and pre-construction surveys. To the extent that these documents relate to individual homes, staff must be prepared to provide the information to homeowners on request. Moreover, staff need to clearly communicate to residents the nature of the legal relationship of private contractors working for the City and residents possibly affected by those activities.

The future changes to the City website that are scheduled to take place this year, will better explain the legal relationships arising from claims for damages allegedly caused by private contractors working for the City. In addition, the City staff who deal directly with contractors and residents on construction sites will be better informed as to the rights of the City to obtain and release documents that contain information that is relevant to property damage claims arising from the construction activities of private contractors.

Communications

The differences between the City of Toronto’s outsourced “unit price” model and the City of Ottawa’s in-house service delivery model may help to account for the distinct approaches to the investigation of claims for compensation against the municipalities. As a result, many of the recommendations made by the Toronto Ombudsman are not applicable to the City of Ottawa. That being said, one area in which the City of Ottawa may take some guidance from the Toronto Report is in the section on communications.

In her report, Ombudsman Crean suggests that the Toronto website be updated to provide better and more comprehensive information in relation to claims against the City, both in terms of the process for making claims as well as the criteria pursuant to which those claims will be assessed. Although the work of the City of Ottawa’s Claims Unit, as well as the claims assessment criteria, were well outlined as part of the August 2011 Comprehensive Legal Services Report, noted above, the Toronto Report provides a valuable lesson in the need to ensure clear and ongoing communication with the public. As was done in respect of the July 2009 rain event, which resulted in more than 800 claims, the Claims Unit will ensure that, through the City’s website and other available communications channels, members of the public are made aware of the scope of the City’s liability for losses, including such things as plain-language explanations and examples of municipal negligence standards. This work will form part of the Unit’s broader 2012 workplan.

CONSULTATION

As this is largely an administrative report issued on a quarterly basis, no consultation was undertaken.

RISK MANAGEMENT IMPLICATIONS:

There are no risk management concerns arising from this report.

LEGAL IMPLICATIONS

Some settlements referenced here are subject to the confidentiality requirements that commonly form part of a claim resolution. Should further details be sought on those matters, it may require an in camera discussion.

FINANCIAL IMPLICATIONS

There are no direct financial implications associated with this report.

TECHNOLOGY IMPLICATIONS

There are no technical implications associated with this report.

DISPOSITION

Subject to any direction by the Finance and Economic Development Committee and Council, the City Clerk and Solicitor will continue to produce this report on a quarterly basis.

APPENDIX “A”

AGGREGATE METRICS FOR Q1 TO Q4 2011

Litigation and Labour Relations Branch

In keeping with the format used as part of the Q1-Q2 Comprehensive Legal Services Report, the aggregate of litigation outcomes for 2011 is reproduced below. This figure includes all forms of litigation, namely civil, labour, OMB and other miscellaneous tribunals.

Claims Unit

*Note: These are non-litigated claims, being claims settled prior to receipt of a Statement of Claim

Claims concluded over $100,000 – Q1 to Q4 2011

Department

Category

Claim Type

Amount

Parks, Recreation & Culture

Bodily/Personal Injury

Falls on City Property

$156,658.66

Public Works

Bodily/Personal Injury

Trip and Fall

$105,526.97

Public Works

Property Damage or Loss

Damage from Tree Roots

$132,664.18

Transit Services

Property Damage or Loss

Vehicle accident

$276,009.90

Transit Services

Bodily/Personal Injury

Losses Onboard City Vehicle

$230,024.70

Public Works

Bodily/Personal Injury

Slip and Fall

$290,239.96

Public Works

Bodily/Personal Injury

Trip and Fall

$278,492.99

Transit Services

Bodily/Personal Injury

City Vehicle Hitting Pedestrian

$101,226.98

Transit Services

Bodily/Personal Injury

Losses Onboard City Vehicle

$251,640.56

Public Works

Bodily/Personal Injury

Injury/Damage on Pathways

$321,731.62

Transit Services

Property Damage or Loss

MVA, City and TP Vehicle

$101,944.06

Environmental Services

Property Damage or Loss

MVA, City and TP Vehicle

$361,006.21

TOTAL:

$2,607,166.79

Corporate, Development and Environmental Law Branch (“CDEL”)

A summary of key in-house CDEL metrics for Q1 to Q4 is set out below in table form.

CDEL – Q1 to Q4 STATISTICS

Agreements & Contracts Reviewed/Drafted	937
Reports Reviewed/Drafted	249
Real Estate Purchases*	38
Real Estate Sales*	64
Tax Sale Registrations and Payments Out of Court*	419
By-Laws Reviewed/Drafted	51

*Stats do not include work required in processing outsourced transactions including Stimulus Funding Initiatives

CDEL – PLANNING AND DEVELOPMENT – Q1 to Q4 STATISTICS

Development Agreements Prepared
Subdivision	19
Site Plan Control	135
Condominium	27
Other	50

Miscellaneous Development Requests Processed
Severance	53
By-laws (Road Opening/Closing)	60
Releases/Development Charge Deferrals	56
Compliance	83
Part Lot Exemption	71
Early Servicing	36

*The Statistics for the Development Agreements do not include associated registration such as transfers, easements, maintenance and liability agreements, joint use and maintenance agreements and inhibiting orders. A total of 28 subdivisions were registered during 2011.

APPENDIX “B”

External Legal Costs – Q1 to Q4 2011

COMMITTEE RECOMMENDATION

SUBJECT:

OBJET :

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RECOMMANDATION DU RAPPORT