CJAD.com: Shell Canada disputes $100 million figure in suit involving Quebec drivers; "related to a fuel additive the company used in 2001 and 2002"
Posted 22 July 04
MONTREAL (CP) - Shell Canada is disputing a published report it might have to pay up to $100 million to about 500,000 Quebec drivers after an out-of-court settlement between the company and lawyers for motorists.
A Montreal newspaper reported Wednesday the agreement could cost Shell $100 million and is related to a fuel additive the company used in 2001 and 2002. Gordon Kugler, a lawyer who worked for plaintiffs in the suit, said court proceedings were launched because the additive left a residue in gas tanks.
The company acknowledged that Quebec Superior Court approved the settlement July 12 but said it does not expect to pay anywhere near $100 million.
"What we feel is that based on the problem and the voluntary compensation program that we had put in place in 2002 for motorists, we believe that the number of claimants will be relatively small," spokeswoman Sonia Larin said in an interview.
Larin said it is difficult to say how many people are involved in the class action because there is a 90-day claim period, which ends Nov. 5.
She noted a class action lawsuit involving the same issue for claimants outside Quebec closed last May 7 and was settled with 500 people receiving a total of $86,000 so far.
Shell (TSX:SHC) also had a voluntary program that compensated some 14,000 people in 2002, including 4,000 in Quebec, and cost the company between $5 million and $6 million.
Kugler called the recent Quebec deal "extraordinary" because so many people can receive compensation.
He said the Quebec settlement is better than others reached elsewhere in Canada because the others provided for compensation only in cases where repairs to the vehicle were needed.
"Anyone who bought Shell gas between March 2001 and October 2002 (is eligible)," Kugler said in an interview. "We estimate there are 500,000 people who bought Shell gas during this period."
Le Journal said the average amount to be awarded will be about $200 but will vary between $20 and about $450 for inspections, cleaning and repairs.
But Kugler said it isn't entirely accurate to talk about an average.
"It ($200) may be exact but it is misleading because you shouldn't talk about an average price.
"Those who had functional problems and needed repairs, Shell will pay for that - and that might be $500, $600.
"For those who didn't have functional problems but who want their gas tank inspected and cleaned, it will cost $150 or $200, and Shell will pay for that.
"Those who don't want to do anything but just want a gas voucher, they will fill out a form and will receive between $20 and $70, depending on the car in question."
Kugler said consumers won't have to provide receipts but will have to make a solemn declaration stating they bought gas at a Shell station.
In January, Shell announced it would compensate Canada-wide motorists whose fuel pumps or gauges were gummed up by the gasoline additive which provoked class-action lawsuits.
The class actions were filed by plaintiffs in British Columbia and Ontario, but Shell said the settlement applied in all provinces except Quebec, where the suit proceeded separately.
Justice Benoit Emery approved the Quebec settlement, details of which will appear in major newspapers on July 31 and Aug. 7.