2003 Annual Report

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Schedule V – Brief Summary of Joint Committee Work During Third Year of Operations

1. The Joint Committee (“JC”) has a mandate to implement the 1986-1990 Hepatitis C Settlement Agreement and Plans and supervise the ongoing administration of claims.
   
2. The JC worked on a regular basis with the Administrator to assist in getting claims processed efficiently. 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 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, including the following:
   
   1. protocol for medical evidence for an alternative to liver biopsies for the primarily infected hemophiliac who is an approved HCV infected person; and
      
   2. guidance documents for claims involving potential non-prescription intravenous drug use.
      
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 9.4% in fiscal 2003 which included substantial negative returns on the equity components of the invested assets. Total assets including the outstanding financial obligations of the provinces and territories as at the end of March, 2003 amounted to $1,048,801,000 compared to total assets of $1,055,370,000 as at the end of March, 2002. The total disbursements from the Trust Fund in the 2003 fiscal year amounted to $97,923,000 including operating expenses. Of this total, more than $90,000,000 was paid to claimants.
   
5. 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.
   
6. The JC monitored legal proceedings in Alberta which started off as a challenge to the 1986-1990 Hepatitis C Settlement Agreement.
   
7. The JC devised a notification campaign directed to doctors to alert class members of their legal rights under the 1986-1990 Hepatitis C Settlement Agreement.
   
8. 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.
      
9. 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.
   
10. The JC undertook very substantial work and commissioned actuarial, medical modeling and epidemiological research to prepare for the first fund sufficiency hearings which were held in the June, 2002 in Québec, Ontario and British Columbia. The courts accepted the recommendation of the JC that the $5,000 holdback be removed for all level two claimants which, when indexation and interest were applied, resulted in approximately $20,000,000 being paid to claimants.
    
11. In analyzing the data needed for the June, 2002 fund sufficiency hearings, the JC identified a situation which had developed in the Claims Center whereby a certain cohort of claimants were being paid compensation erroneously. Under the terms of the contract with the administrator, the JC required a "Root Cause Analysis" which the administrator performed on an expedited basis. The JC sent one of its members to Ottawa to perform an audit of the claims procedures and the JC was satisfied that the overpayments were based on inadvertence and a lack of understanding. The JC was also satisfied that the measures taken by the administrator to correct the problem were sufficient. The JC resolved recapturing the overpayments by agreement with the administrator to pay half of the total amount of the overpayments to the Trust Fund in fiscal year 2003 and the remaining half will be recovered in the next two fiscal years.
    
12. The JC is next required to formally report to the Courts in June, 2005 with respect to fund sufficiency. The JC has been considering the possibility of recommending to the courts that the two remaining caps be removed prior to June, 2005.
    
13. The JC continued holding bi-weekly conference calls to discuss and resolve administrative issues as they arise. The JC also held once a month conference calls with Fund Counsel, the Administrator and Justice Winkler’s monitor to discuss and resolve issues as they arise.
    
14. 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 for assistance in developing acceptable medical evidence for Court Approved Protocols;
       
    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.
       
15. 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.