Class-action suit launched against lotto agency
Published Wednesday, March 28, 2007 6:23PM EDT
A Toronto law firm is launching a class-action suit against the Ontario Lottery Corporation on behalf of a client who has purchased lotto tickets but never won.
A lawsuit was filed in a Toronto courtroom on Wednesday morning for Etobicoke resident Boleslaw Karchut. A written statement from law firm McPhadden, Samac, Merner & Barry, said the claim "is on behalf of all persons" who bought lottery tickets since 1975.
"That's when lotteries first started in Ontario, sponsored by the Ontario government," lawyer Bryan McPhadden told CTV.ca.
The amount of the claim is $1.1 billion which includes $100 million in "punitive damages."
McPhadden said they are proposing a solution within the lawsuit, which they call a "novel resolution."
"We propose that the lottery corporation hold a free lottery," McPhadden said adding that it would take place over a six-month period.
Because there is no way for people to know if they lost winnings due to a theft or fraud by a lottery retailer, pursuing the class-action suit is difficult, according to McPhadden.
But he believes his firm's proposal solves the problem in an equitable way.
"There doesn't seem to be an awful lot of doubt -- but I guess the lottery corporation would say differently -- that people have been deprived but we don't know and can't possibly know who they are," McPhadden said.
"So who do you reward? You don't know. So what's the proper reward; it's to give those people who have been buying lottery tickets an opportunity to win this time."
He added that Karchut chose to pursue the lawsuit after discussions with the law firm. McPhadden said that Karchut is upset about buying lottery tickets for several years but not knowing whether he has won or not.
If the suit is successful in court, the proposed free lottery solution would offer a free ticket to lottery buyers for an upcoming special draw. People who can prove that they purchased tickets in the past would also qualify to receive a free ticket.
"So the usual lotteries continue but they get a free ticket with the ticket that they purchase."
"What's fair about it is, those people who play the lottery heavily -- or more frequently -- than others will have a proportionate opportunity to win the free lottery," McPhadden said.
He believes that if the court finds in favour of his client and the proposed resolution, it will mean changes at the lottery corporation.
"If the court awards a sizable sum, that's money that's not going to go to OLG or further on, to the province. Hopefully it's a sizable enough amount that yes, it will have an impact."
In the wake of a report by Ontario's ombudsman, opposition parties focused on the cabinet minister responsible for OLG. Calls for David Caplan's resignation were stepped up on Wednesday with opposition parties alleging that the minister knew there were problems months before the scandal became public -- but did nothing until the ombudsman's scathing report.
Premier Dalton McGuinty faced question after question about the lottery scandal, which once again dominated the hour-long question period in the Legislature on Wednesday.
The Conservatives referred to the scandal as "Lottogate."
"If it looks like a duck and it quacks like a duck, then it's probably a cover-up," said Official Opposition Leader John Tory during question period.
"What was your minister doing in the months and years prior to the ombudsman's report?" said NDP Leader Howard Hampton. "Ordinary Ontarians feel totally betrayed."
New Democrat MPP Peter Kormos said "hell no" when asked if he would buy a lottery ticket for this week's draw.
"I would far sooner put my money into some mobster on a numbers game before I would buy an OLG ticket as long as David Caplan is minister," Kormos said.
McGuinty stood by his embattled cabinet minister: "We intend to ensure that when they put that money down, whether it be a loonie or a twoonie, that while the odds may be long, they can have confidence in the game itself being fair," he said.
The government said it plans to implement all the recommendations included in the ombudsman's report.
While the minister deals with calls to step down, another controversy is brewing.
Caplan denied Wednesday that the government told OLG to launch a public relations offensive to refute reports that retailers were winning too many jackpots.
The corporation's strategy was to say that lottery insiders win more often because they play more than most people.
When asked about a report that his former communications director and a well-known Liberal strategist helped devise OLG's public relations strategy, McGuinty repeated his promise to implement the ombudsman's recommendations.
Caplan said that Jim Warren and Warren Kinsella were working for OLG at the time and not his office. He would not say whether the men were also working for the premier's office.
"I can't comment on that," Caplan said. "But what I can tell you is that I'm not involved in the day-to-day operations or the personnel decisions of the OLG."
New Democrats claimed Wednesday that the involvement of two high-profile Liberals shows the premier's office was involved in the public relations plan.
"When Mr. Kinsella is involved in a high-profile damage control event like that, it seems to me that the only inference that you can draw is that the premier's office's fingerprints are all over it," Kormos said.
The government countered by pointing out that several Conservative supporters also worked on OLG's reaction plan.
With a report from CTV's Paul Bliss and files from The Canadian Press