January 24, 2019

Illegal school fees in Quebec: the government will have to intervene alongside insurers

The Quebec government will have to defend itself against allegations of having knowingly tolerated, for several years, the unlawful collection of fees from the parents of children in the public school system by 63 Quebec school boards. This is the result of the Superior Court’s dismissal, on January 22, 2019, of the opposition to the forced intervention sought by the insurers of the school boards targeted by a class action.

There was a genuine connection between the school boards’ recourse in warranty and the insurers’ forced intervention against the government.

A major victory for the insurers involved

The case goes back to 2016, when the Quebec Superior Court authorized the class action against the school boards, seeking the recovery of fees charged to the parents. Indeed, the practice contravenes the Education Act, which provides for free educational services in the public school system. In turn, the school boards brought a recourse in warranty against their insurers. 

Eighteen months later, a settlement was reached between the class and the school boards, pursuant to which the school boards were required to pay $153 M in reimbursement of the fees.

However, the school boards maintained their action against their respective insurers seeking the indemnity they claim to be entitled to under their insurance policies.

Insurers sought to force the intervention of the Quebec government

In response, on October 12, 2018, the insurers sought to force the intervention of the Quebec government, alleging, inter alia, that they were subrogated in the rights of the school boards. The insurers claim that the government tolerated the collection of fees over a period lasting several years and took no steps to correct the situation. 

The school boards opposed the forced intervention on the ground that there was no connection between the recourse in warranty and the insurers’ forced intervention. According to the school boards, the government’s involvement is not necessary to resolve the dispute between the school boards and their insurers.

In support of its decision dismissing the opposition of the school boards, the Superior Court found that there was a genuine connection between the school boards’ recourse in warranty and the insurers’ forced intervention against the government. The judge found that the risk of contradictory judgments weighed in favour of dismissing the opposition of the school boards, adding that the judicial system would be better served by being called upon only once rather than proceeding with two separate actions, as the school boards proposed. 

The Court found that at the heart of both disputes are the guidelines of Quebec’s Ministry of education and higher learning, the application and interpretation of these guidelines by the school boards in coming to a decision on the issue of insurance coverage, the Quebec government’s liability, and if relevant, the apportionment of liability with the school boards. 

The school boards and the government have until February 21, 2019, to appeal the judge’s decision.