A quarter-million-dollar thought experiment

The secrecy surrounding the UTSU’s settlement with Sandra Hudson makes it difficult to take an informed stance on the lawsuit’s conclusion

A quarter-million-dollar thought experiment

On October 12, the lawsuit brought against former University of Toronto Students’ Union (UTSU) Executive Director Sandra Hudson ended not with a bang, but with a whimper.

The suit was filed in September 2015 after the UTSU’s Board of Directors alleged Hudson had committed civil fraud in receiving $277,726.40 in a compensation package upon her contract’s termination. For two years, the suit dominated student politics, but it was resolved in a confidential settlement 11 days before its trial was set to begin.

The UTSU’s official statement reads that Hudson has agreed to repay “a portion of the overtime payments” that were paid out to her. While this amount may be disclosed at some point as an ‘extraordinary payment’ in the UTSU’s audited 2017–2018 financial statements, little information has been provided about the terms of the settlement or how it was reached.

As far as students are concerned, this means very little has been resolved. Without speculating or jumping to conclusions, it’s almost impossible to take a stance on the lawsuit’s conclusion in light of the dearth of information available. The fact that students have not been permitted access to the facts means that engaging in a meaningful and informed debate about the settlement is virtually impossible — a serious issue in light of the accountability concerns involved.

The secrecy of the proceedings has led to an extremely unsatisfactory result: students have been denied the information required to take a stand on the results of what is and has been for several years a clearly high-stakes case.

In a statement to The Varsity, UTSU President Mathias Memmel wrote, “Scepticism is justified, but I ask anyone who’s sceptical to trust that this board and these executives would only do what’s best for students, and would only have accepted the best possible offer.” Memmel’s request will be difficult for students to grant, especially when considering that this lawsuit was the result of an alleged abuse of power by former executives.

We do know that the decision to settle was not unanimous. The Varsity recently broke a story about the four members of the UTSU Board of Directors who voted against the settlement. Reasons cited for this divergence included skepticism about the quality of the deal and the importance of seeing the case through to trial. It is also telling that only 22 of 51 board members — a board formed after an 11.8 per cent voter turnout in last year’s UTSU elections — were present for the vote.

The anger and frustration that has been targeted at the UTSU in the wake of its decision is understandable. Despite the lawsuit now having reached its conclusion, no confirmation of liability has been made.

We do not doubt that a number of the UTSU’s constituents believe Hudson is guilty. However, legally speaking, this will likely never be proven. Many people continue to hold steadfast faith in the adversarial nature of the trial process and its potential to bring out the truth in even the thorniest of proceedings. Accordingly, many students have criticized the UTSU’s decision to opt for a resolution out of court, and they have interpreted its decision as a sign of weakness, or even betrayal.

The truth is that settlements in this province are hardly uncommon: a substantial portion of lawsuits never make it to trial. Meanwhile, the legal system is overloaded with cases, and the courts are crumbling under their weight. The recent scramble to address this issue in the criminal law context following pressures from the Supreme Court in the R. v. Jordan decision, in turn, have sapped up the resources available for civil cases. Trials often take months or even years to resolve, and legal fees can reach exorbitant levels as more time elapses.

It is therefore possible that the UTSU made the most prudent decision in settling the case out of court, but it is impossible to make this judgment with any kind of certainty. From the beginning, a shield of confidentiality has — understandably — prevented access to the evidence that was to be presented at trial, making it difficult to speculate as to the UTSU’s odds of winning the case in court. And without information about the terms of the settlement, we cannot make the call as to whether they reached a comparatively good deal.

The UTSU has stated that the money it will receive from the settlement will be accounted for in next year’s financial statements. This does not offer us much comfort; it is still unclear how this will be done and whether it will be explicitly delineated as settlement money in the UTSU’s records.

It is also curious that despite accusations made against the UTSU in the past, the lawsuit being motivated by anti-Black racism is now effectively a footnote in the its resolution. As part of the settlement, Hudson has now acknowledged that racism was not a motivation for the lawsuit. This flies in the face of what community groups such as the Black Liberation Collective (BLC) have been protesting since early in the proceedings. Members of the BLC have called for boycotts; the organization’s demand for a second legal opinion by a lawyer who identifies as Black had been voted down by the UTSU Board of Directors.

We can only wonder what evidence was presented that allowed the very serious accusations of racism to be relegated to the cutting room floor, or what the BLC thinks about the lawsuit’s conclusion, as the organization has not responded to The Varsity’s requests for comment since the announcement about the settlement was made.

The need for confidentiality in legal proceedings is understandable, but it has also rendered this case full of bitter compromises and closeted skeletons. The real tragedy here is that students have been shut out of a conversation in which their interests were undoubtedly at stake. Though many have taken to social media to express their distaste for the case’s conclusion, pulling together a thorough case against the UTSU’s decision will be very difficult without the facts.

Hopefully the backlash the UTSU has received will spark some generosity in disclosure — that is, if there is anything else at all they are legally permitted to tell us. In the meantime, it is deeply frustrating that all we can do is speculate.

The Varsity’s editorial board is elected by the masthead at the beginning of each semester. For more information about the editorial policy, email editorial@thevarsity.ca.

 

UTSU settles legal dispute with former vice president, internal & services

Sandra Hudson only remaining defendant in lawsuit pertaining to alleged unlawful payments

UTSU settles legal dispute with former vice president, internal & services

The University of Toronto Students’ Union (UTSU) has ended its legal dispute with former vice president, internal and services, Cameron Wathey.

Wathey, along with Yolen Bollo-Kamara, former UTSU president, and Sandra Hudson, former executive director of the UTSU, was sued by the UTSU in September 2015; the union’s claim alleged that  fraudulent severance payouts were made to Hudson as part of her termination agreement in April 2015. Bollo-Kamara and the UTSU reached a settlement in January, 2016, which included a signed affidavit from Bollo-Kamara.

The UTSU Executive Committee issued a public statement on April 27, announcing that the board of directors had approved a settlement with Wathey on February 28. The terms of the settlement have been made confidential. The settlement includes an affidavit signed by Wathey, which was made public alongside the statement by the UTSU.

“The testimony received from Wathey as part of the settlement helps our case, which means things are moving along fairly and expediently,” said outgoing UTSU president Ben Coleman in an emailed statement to The Varsity.

In his affidavit, Wathey states that he relied on his understanding that the termination agreement was approved by the UTSU’s legal counsel and Hudson’s legal counsel, despite having concerns. The affidavit also stated that Wathey did not financially benefit from the arrangement.

“Hudson prepared a termination agreement and indicated that it had been approved by UTSU legal counsel, DLA Piper, as well as her own lawyer,” reads a portion of Wathey’s affidavit. DLA Piper has denied advising Hudson on the termination agreement.

Hudson was allegedly issued a total of $247,726.40, a figure equivalent to approximately 10 per cent of the union’s budget. The UTSU alleges that this included 1,974.5 overtime hours that were recorded in a single entry in April 2015. The union also alleges that Hudson deliberately wiped confidential information from the UTSU’s computers.

The UTSU is continuing its lawsuit against Hudson and is seeking the money that was allegedly improperly issued to Hudson, as well as $200,000 in damages.

In December 2015, Hudson countersued the UTSU for $300,000 in damages. Hudson’s counterclaim stated that her termination was to avoid strife with the union’s incoming executives, and that the union violated a non-disparagement and confidentiality clause that was part of Hudson’s termination agreement.

“[T]he UTSU is still primarily seeking mediation or arbitration as a resolution to this matter,” reads a portion of the UTSU’s statement. “Although Ms. Hudson has yet to agree to a binding arbitration in this matter, we are continuing to seek these procedures to prevent an expensive and adversarial trial.”