Rescinded [2017-04-01] - Directive on Claims and Ex Gratia Payments

1.1 This directive takes effect on October 1, 2009.

1.2 It replaces the Policy on Claims and Ex Gratia Payment (dated June 1, 1998).

2.1 This directive applies to departments as defined in section 2 of the Financial Administration Act.

2.2 Those portions of sections of this directive that provide for the Comptroller General to monitor compliance with this directive within departments and/or request departments take corrective action, do not apply with respect to the Office of the Auditor General, the Office of the Privacy Commissioner, the Office of the Information Commissioner, the Office of the Chief Electoral Officer, the Office of the Commissioner of Lobbying, the Office of the Commissioner of Official Languages and the Office of the Public Sector Integrity Commissioner. The deputy heads of these organizations are solely responsible for monitoring and ensuring compliance with this directive within their organizations, as well as for responding to cases of non-compliance in accordance with any Treasury Board instruments that address the management of compliance.

2.3 This directive applies to ex gratia payments.

2.4 This directive should apply only when there is no statutory, regulatory or policy vehicle to make the payment.

2.5 This directive does not apply to claims between departments.  Such claims are dealt with on the basis of mutual forbearance.

2.6 This directive does not apply to claims between departments and Crown corporations.  Such claims are resolved by negotiated settlement or, when negotiations fail, are referred to the Deputy Attorney General of Canada.

3.1 The purpose of this directive is to ensure the efficient and effective resolution of claims by and against Her Majesty in Right of Canada (the Crown) arising from government operations. Claims by or against the Crown may arise even when parties involved in the conduct of government business have been acting in good faith. This directive supports the objectives of the Policy on Internal Control by outlining the roles and responsibilities of chief financial officers, managers (including those with delegated authorities to make payments), and departmental security officers in processing claims and ex-gratia payments.   This is to put in place a consistent approach which respects government financial and legal authorities and obligations.  Claims may include requests for compensation to cover losses, expenditures or damages sustained by the Crown or a claimant, including requests or suggestions that the Crown make an ex gratia payment.

When the requirements of this directive are met, deputy heads have the authority to:

• Accept amounts in settlement of claims by the Crown;
• Recover from servants any amounts servants owe to the Crown;
• Pay amounts in settlement of claims against the Crown; and
• Make ex gratia payments.

3.2 This directive is issued pursuant to section 7 of the Financial Administration Act, and the Ex gratia Payments Order, 1991 included as Appendix B.

3.3 The spending and certification authorities of this directive may be exercised by an official designated by the deputy head except that only the deputy head may approve ex gratia payments exceeding $2,000.  Note that the Policy on Legal Assistance and Indemnification applies when making decisions whether to approve requests for legal assistance and indemnification related to Crown servants subject to legal claims and actions.

3.4 This directive supports and is to be read in conjunction with the following:

• Guideline on Claims and Ex gratia Payments;
• Policy on Internal Control; and
• Policy on Legal Assistance and Indemnification

Definitions to be used in the interpretation of this directive are in Appendix A.

6.1 Chief financial officers are responsible for the following:

6.2 Departmental managers responsible for Claims against the Crown and ex gratia payments are responsible for the following:

• Requesting that the claimant provide facts upon which his or her claim is based, showing how it is calculated and original copies of documents confirming all disbursements;
• Referring claims to Legal Services:
  • When the claim involves legal proceedings;
  • To obtain a legal opinion when considering payment of an amount greater than $25,000 to resolve a claim; or
  • When the payment is ex gratia.
• Conducting with the assistance of the departmental security officer as required, an investigation of reported incidents for claims of servant's effects that are damaged, lost, stolen or destroyed and ensuring these incidents are treated as claims and are not treated as ex gratia payments;
• Obtaining a release from the claimant in consideration of payment; and
• Accounting for all disbursements;

6.3 Departmental managers responsible for Claims by the Crown are responsible for the following:

• Making every reasonable effort to obtain value for money when resolving a claim;
• Referring all claims involving legal proceedings to Legal Services and obtaining legal opinions when material sums are at stake or when there is a lack of evidence, conflicting evidence or uncertainty as to the applicable legal principles;
• Collecting recoveries from servants, notifying the servant of the proposed retention and of the servant's right to make representation within 30 days and to consider the servant's representation, if any, before making a final decision.  Note that section 155 (3) of the  Financial Administration Act also applies; and
• Collecting or enforcing collection of payment of the claim in compliance with the Directive on Receivables Management and the the Directive on Receipt, Deposit and Recording of Money ;

Furthermore, those managers with delegated authority to resolve claims are responsible for the following:

• As required, signing a release as a condition of payment being made to resolve a claim by the Crown.

6.4 The departmental security officer is responsible for the following:

• Assisting managers with or conducting investigations based on the type of incident and the relevant dollar amount.

6.5 Monitoring and reporting requirements

7.1 In instances of non-compliance, deputy heads are responsible for taking corrective measures within their organization with those responsible for implementing the requirements of this directive.

7.2 In support of the responsibility of deputy heads to implement the Policy on Internal Control and related instruments, chief financial officers are to ensure corrective actions are taken to address instances of non-compliance with the requirements of this directive. Corrective actions can include requiring additional training, changes to procedures and systems, the suspension or removal of delegated authority, disciplinary action and other measures as appropriate.

7.3 Individuals are reminded that sections 76 to 81 (Civil Liabilities and Offences) of the Financial Administration Act as well as sections 121 (Frauds against the Government), 122 (Breach of Trust), 322 (Theft) and 380 (Fraud) of the Criminal Code may apply.

This section identifies other significant departments with respect to this directive.  In and of itself, it does not confer any authority.

8.1 The Department of Justice is responsible for the following:

• Providing legal opinions and advice including negotiation advice; and
• Conducting litigation by or against the Crown and against its servants.

8.2 The Treasury Board Secretariat, Office of the Comptroller General is responsible for the development, oversight and maintenance of this directive and for providing interpretative advice.

Please direct enquiries about this directive to your departmental headquarters. For interpretation of this directive, departmental headquarters should contact:

Financial Management Policy Division
Financial Management and Analysis Sector
Office of the Comptroller General
Treasury Board Secretariat
Ottawa ON K1A 0R5

E-mail: fin-www@tbs-sct.gc.ca
Telephone: 613-957-7233
Fax: 613-952-9613