Although money cannot replace the 47 lives that were claimed on July 6, 2013 in Lac-Mégantic, hundreds of millions of dollars have been claimed for all kinds of damages caused by the train disaster. Who paid to compensate the victims and their families, to rebuild the city center reduced to ashes and to decontaminate the soil and the waterways? And who will pay again? Because 10 years later, not everything is settled and a class action is still before the courts.
Unsurprisingly, the lawsuits started pouring in soon after the oil wagons exploded and the fire tore through downtown.
Around forty entities directly or indirectly linked to the rail disaster have been prosecuted, such as the lessors of wagons and the producers of the oil transported. The victims brought a class action, and other actions for damages were filed, in particular by the Quebec government, to be reimbursed for all the bills it had to pay. Insurance companies have also gone to court, wishing to recover from the entities presumed responsible for the disaster all the sums they have paid to their policyholders, who have notably lost their homes.
But, barely a month later, the railway company at the heart of this deadly derailment, Montreal, Maine and Atlantic (MMA), sensing bankruptcy, placed itself under the protection of the Superior Court of Quebec against its creditors. Its assets on Canadian soil were less than the value of the claims that continued to accumulate against it, the company that owned the railway said at the time. Similar protection was granted to its parent company in the United States.
The claims filed exceeded one billion dollars, calculated a Quebec judge hearing the proceedings. The sale of MMA’s Canadian and U.S. assets was used to pay secured creditors — including the U.S. government — but that money fell far short of the total claimed.
Compensation fund
The various companies sued have come to an agreement: they have agreed to pay sums into a compensation fund, for the benefit of creditors, victims and their families. In exchange, the legal proceedings were dropped against them. Ultimately, there were more than 430 million dollars in this fund resulting from the arrangement with the creditors of the MMA. Different figures have been circulated, in particular because of the sums paid in American dollars and the fluctuation of the exchange rate.
For example, the federal government contributed $75 million, World Fuel Services, $135 million, and Irving Oil, $75 million. But no one was fully compensated: for example, Quebec obtained only 93.4 million (out of the 320 million it claimed) and the insurers, only 1 million out of the 15 claimed. The fund was adopted in June 2015 by creditors and victims. It was approved by a judge in Quebec the same year. Millions were given to the victims, but the amount received by each varied according to their situation.
Only the Canadian Pacific Railway Company (CP) resisted, refusing to participate in the fund and to pay any amount whatsoever, claiming to have nothing to reproach itself for. Proceedings continued against her.
She was eventually exonerated in December 2022, with Superior Court Judge Martin Bureau finding that “CP has no legal liability in this tragic accident. This responsibility rests primarily with the locomotive engineer and last driver of the train, Thomas Harding, and his employer, the MMA”. The magistrate thus dismissed the three actions brought against the CP, including the class action.
But the group of victims who had filed this class action appealed the judgment: this claim against the CP is therefore not yet over.
An injunction is also on the horizon to prevent the expropriation of 42 properties for the construction of the railway bypass in Lac-Mégantic. Lawyers said it would be filed in early July.
Pay for pollution
According to the Transportation Safety Board of Canada, approximately six million liters of crude oil spilled that day and some 100,000 liters ended up in the Chaudière River and Lake Megantic.
For polluting these waterways where fish live, the rail company MMA was imposed the maximum fine provided for in the Fisheries Act, ie one million dollars. Of this amount, at least $400,000 went to the Environmental Damages Fund.
The Municipality of Lac-Mégantic and the governments of Quebec and Canada had to pick up the bill for the decontamination of soils and waterways.
Penal and criminal charges
A criminal trial also took place in 2017. Charges of criminal negligence causing death were brought against conductor Thomas Harding, rail controller Richard Labrie and the director of MMA activities in Quebec, Jean Demaître.
All three were found not guilty by a jury in January 2018, after an emotional criminal trial that lasted several weeks at the Sherbrooke courthouse.
MMA was also charged with criminal negligence, but its trial did not take place: the Director of Criminal and Penal Prosecutions dropped the proceedings against the company since he no longer believed he could obtain a conviction after the acquittal of its three employees accused of the same crime.
MMA executives and conductor Thomas Harding have also been prosecuted for criminal offenses under the Railway Safety Act. They all pleaded guilty in 2018. Mr Harding received a suspended six-month prison sentence. As for the five leaders, they were ordered to pay fines of $50,000 each, the maximum amount allowed, for a total of $250,000.