2004 Annual Report

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Schedule Q - Summary of Joint Committee Work

1. The Joint Committee (“JC”) has a mandate to implement the 1986-1990 Hepatitis C Settlement Agreement and Plans and to supervise the ongoing administration of claims.
2. The JC worked on a regular basis with the Administrator to assist in getting claims processed as efficiently as possible. The JC held quarterly meetings with the Administrator and liased with the Administrator as follows:
   
   1. met with the Administrator to ensure adequate management and staffing was in place;
   2. tracked claim activity and efficiency of payment of claims;
   3. evaluated the performance of the Administrator;
   4. developed ongoing strategies to improve claim processing time and claimant satisfaction; and
   5. monitored complaints.
      
3. The JC prepared additional material for Court Approved Protocols and Standard Operating Procedures to govern and guide the Administrator in handling claims and claimants.
4. The JC continued to closely monitor the sufficiency of the Trust Fund, the performance of the portfolio of assets held by the Trust Fund, whether the portfolio components are meeting benchmark targets and disbursements out of the Trust Fund. In summary, the overall return was a remarkable 12.4% including provincial and territorial treasury bill interest rate obligations at 2.9%. This return complemented the average return of 9.4% in the 2003 fiscal year all of which translated into a robust asset base for future obligations against the Trust Fund. Total assets including the outstanding financial obligations of the provinces and territories as at the end of March, 2004 amounted to $1.105 million compared to total assets of $1.048 million at the end of March, 2003. This indicates that for two successive years the total assets have been growing after deducting total disbursements for compensation payments and administrative costs. The total disbursements from the Trust Fund in the 2004 fiscal year amounted to approximately $70.5 million including operating and administrative expenses. Of this total, more than $62.5 million was paid to class members. On a year-by-year basis, at the end of year 4, total compensation paid to class members amounted to approximately $364 million. In year 4 the total administrative costs amounted to $6.1 million against $62.5 million paid to class members, which again amounts to a ratio of less than 10%. If appeal costs associated with Fund Counsel, arbitrators and referees and the Crawford appeal coordinator including travel costs totalling approximately $1 million, are subtracted from administrative costs, the ratio comes down to approximately 8%. The overall administration cost of the settlement to date is approximately 9 to 10%. This does not include the one time payment of class counsel fees, advertisement charges and other start up costs. It includes all appeal costs.
5. In the fourth fiscal year, the JC undertook a mini-review of the cohort size and the sufficiency of the Trust Fund to determine whether the two remaining restraints pertaining to income loss and loss of services could be prudently lifted. The JC in conjunction with information provided by the actuaries has recommended that the remaining two restraints pertaining to income loss and loss of services be partially lifted. This matter was addressed at the June 2002 Trust Fund sufficiency hearings but at that time it was thought prudent to lift the constraint pertaining to the $5,000 holdback only.
6. In the fifth fiscal year, the JC will be undertaking a full-scale sufficiency review of the Trust Fund including an assessment of the cohort size of class members and medical modeling along with other issues which could significantly affect the Trust Fund. The JC anticipates that hearings will be held on or after June 2005 to address the sufficiency of the Trust Fund along with other matters. This will entail a significant amount of work.
7. The JC monitored appeal decisions for claimants whose claims were denied by the Administrator. The JC provided guidance to Fund Counsel with respect to difficult and exceptional cases.
8. The JC continued to monitor legal proceedings in Alberta which started off as a challenge to the 1986-1990 Hepatitis C Settlement Agreement.
9. The JC devised a notification campaign directed to doctors including HCV specialists to alert class members to their legal rights under the 1986-1990 Hepatitis C Settlement Agreement.
10. The JC is responsible for making recommendations to the Courts pertaining to the appointments of service providers, negotiating budgets for service providers, obtaining court orders pertaining to approval of their budgets, instructing service providers and receiving and assessing advice and reports from service providers. The JC terminated the contract of Towers Perrin as investment consultants and replaced them with Eckler Partners at substantially less cost. The service providers to which this description applies include:
    
    1. the trustee;
    2. the investment managers;
    3. the investment consultants;
    4. the auditors;
    5. the actuaries;
    6. physicians who assist in medical modelling; and
    7. epidemiologists.
       
11. The JC continued to liase with Canadian Blood Services and Hema-Quebec on traceback issues and obtaining claimants' medical records from hospitals and on various issues pertaining to the stored frozen blood samples.
12. The JC continued holding bi-weekly conference calls to discuss and resolve administrative issues as they arose. The JC also held periodic conference calls with Fund Counsel, the Administrator and Justice Winkler's monitor to discuss and resolve issues as they arose.
13. The JC has also done the following to improve the administration of the Plans:
    
    1. addressed the complaints and inquiries of class members;
    2. negotiated an agreement with the Administrator to assume the role of administering the EAP2 Program at substantially less cost than Liberty Health, the predecessor administrator of this program;
    3. met with physicians/experts to keep abreast of medical science pertaining to HCV;
    4. met with physicians/experts for information on new HCV testing developments and treatments;
    5. met with physician/expert in medical modeling to undertake an ongoing research study of claimants;
    6. monitored costs of service and negotiated budgets with service providers and made recommendations with respect to ongoing and exceptional costs; and
    7. responded to direction from the Courts of Ontario, British Columbia and Quebec with efforts to improve and streamline the approval process.
       
14. The JC continues to appear before the Courts of Ontario, British Columbia and Quebec to seek orders as necessary for the implementation and administration of the Plans and to report to the Courts on material issues.