No duty of care owed to farmers arising from mad cow crisis

The Ontario Superior Court of Justice recently dismissed claims by Canadian farmers against the Government of Canada in relation to its handling of “mad cow disease” between 2003 and 2007. After years of litigation and a lengthy trial, the court determined Canada owed no duty of care to the farmers and if one was owed, Canada acted reasonably and met the appropriate standard of care. 

The decision provides guidance on the scope of duties the Government of Canada owes in dealing with a public health crisis, and confirms the unwillingness of courts to interfere with government policy decisions, particularly when a program is brought in to assist those impacted. Given the ongoing management of COVID by various levels of government, this case provides helpful guidance.

Background

The class action, brought on behalf of all Canadian farmers who raised cattle in May 2003, alleged the Government of Canada was negligent in not keeping bovine spongiform encephalopathy (BSE) out of Canada. Clinical symptoms of BSE in cows include nervous or aggressive behaviour, lack of coordination and inability to stand up. BSE quickly became known as mad cow disease. 

The court heard evidence that BSE was believed to be passed to other cattle due to the slaughtering and rendering of infected but non-symptomatic cattle whose protein was included in feed provided to calves. It was alleged Canada was negligent in failing to implement a feed ban or by failing to adequately monitor and prevent certain cattle from other countries from entering the feed chain between 1990 and 1994. The class, defined as all Canadian farmers who raised cattle in May 2003, sought damages arising exceeding $7 billion.

Decision

In dismissing the class claims, the court looked at the regulatory scheme pursuant to which government regulates farming in Canada, the particulars of the programs brought in to deal with the mad cow situation and first principles relating to liability of government officials for policy decisions. The court found the Government of Canada was not liable for a number of reasons.

First, the action was barred by the Crown Liability and Proceedings Act. Immediately following the border closure in 2003, Canada developed programs that provided financial assistance to cattle producers which, Canada submitted, barred the action. Notably, Canada provided financial assistance to the class of close to $2 billion in specific BSE-related programs authorized under the Farm Income Protection Act. Canada made cash payments to class members, which provided a form of compensation to them for economic losses suffered as a result of the border closure in and following May 2003, which are the same losses for which damages are sought in this action.

Second, going back to basic tort law/civil liability principles, the court found that while damage to the farmers was foreseeable, the statutory framework and interactions between Canada and the class were not sufficient to create a relationship of proximity such that a duty of care should be recognized. The relevant laws had broad public purposes and do not create a duty of care between Canada and the cattle-producing industry. Nor was there a “special relationship” between Canada and the class arising from interactions between them. 

Third, there were policy reasons why a duty of care should not be recognized in this case. The actions impugned by the farmers involved policy decisions rather than operational negligence. The alleged negligence related to the design of Canada’s monitoring program. This was a decision as to a course of action, or policy decision, not operational negligence. Recognizing a duty of care in these circumstances would create conflict with broader statutory obligations and may require government to prefer one industry group over others. 

The court went on to note that a great deal of financial assistance was provided to the famers, which was found to offset most of the farmers’ losses, and their existence and availability provided an additional policy reason for a court to be reluctant to impose a private law duty of care.

Lastly, even if a duty was owed, the Government of Canada was found not to have acted unreasonably or in breach of the standard of care in the circumstances. BSE was a novel disease, based almost entirely in the UK. Canada considered the risk of BSE entering the Canadian cattle herd arising from the rendering of UK imports and concluded the risk was low, a determination consistent with experts’ views.

While not required, the court addressed the issue of damages, noting that damages awarded would have to take into account the financial assistance payments made to the class during the period at issue. The court concluded that the class’s economic losses due to the border closure from 2003 to 2007 were $5.419 billion and the financial assistance payments made to the class in the same period were $4.256 billion, thus resulting in a damages award of $1.163 billion had Canada been found liable in negligence.

The author wishes to thank Harris Khan, articling student, for his help in preparing this legal update.