BSE lawsuit moves forward
November 2, 2005
Meatnews.com
Chris Harris, Editor
http://www.meatnews.com/index.cfm?fuseaction=Article&artNum=10484
CANADA: Cattle ranchers claim the handling of the 2003 bovine spongiform encephalopathy discovery caused them to suffer financially.
A group of Canadian cattle ranchers named Ridley Inc., Winnipeg, Manitoba, and the Canadian government as co-defendants in a class-action lawsuit filed in four provinces.
The lawsuit seeks recovery of damages, including punitive damages, for losses allegedly incurred by Canadian cattle farmers as a result of the international bans on the importation of Canadian beef and cattle following the announcement on May 20, 2003 of the diagnosis of bovine spongiform encephalopathy in a cow in Alberta.
There are substantial preliminary legal arguments raised by the defendants which must be resolved prior to any hearing to certify the lawsuits as class actions. Ridley Inc. and Ridley Corp. Ltd. have filed notices of motion to strike the statement of claim and dismiss the Ontario action. These motions are scheduled to be argued at a hearing in Toronto in November. Ridley Inc. believes that there are reasonable prospects that the actions against it will be struck out but, at this preliminary stage, is unable to provide any further comment as to the likely outcome of any aspect of the lawsuit.
Only after these preliminary legal arguments have been resolved, and only if the lawsuits are certified as class actions, will the courts, to the extent it remains necessary, proceed to address the merits of any factual allegations raised by the plaintiffs. The proceeding in Quebec has been stayed pending a decision in the Ontario hearing to dismiss the claims against Ridley Inc. and the other defendants. The proceedings in Alberta and Saskatchewan are also currently in abeyance.
Ridley Inc. has been examining its insurance position in respect to these lawsuits. As previously reported, all relevant insurers were notified of the plaintiffs' claims and have been kept informed of relevant developments. A number of those insurers have reserved their position, while others have adopted the position that their policies do not respond to the claims, including the legal costs currently being incurred.
Based on its analysis and investigations, Ridley Inc. believes there is little prospect of any of the insurers responding favorably under these policies. Ridley Inc. will continue to fund the cost of its defense of the lawsuits from operating cash flow and may take action against the relevant insurers in the event of further developments in respect to these insurance policies and if the prospects of success appear reasonable.
