Ex-Supreme Court justice says Hockey Canada's handling of fund used to pay sexual assault claims was flawed

A new report commissioned by Hockey Canada says that a controversial reserve fund it used to settle a multi-million-dollar lawsuit alleging a 2018 group sexual assault involving World Junior players was necessary, but there were serious problems with how that fund was administered, CBC News has learned.

CBC News has viewed and verified parts of a 100-page-plus preliminary report written by retired Supreme Court justice Thomas Cromwell that recommends sweeping changes.

The report found Hockey Canada didn't have policies and procedures in place to govern use of its reserve funds, didn't fully disclose its funds in financial records, and broke the rules by failing to notify members of large payouts.

Hockey Canada hired Cromwell in August as calls mounted for its leaders to resign after news broke that it had used its National Equity Fund — established to cover uninsured or underinsured claims — to settle sexual misconduct claims.

The hockey organization has been under intense public scrutiny since May, after a woman filed a $3.5-million lawsuit alleging eight hockey players — some of them members of the 2018 World Junior hockey team — sexually assaulted her.

Hockey parents were outraged to learn that Hockey Canada used the National Equity Fund — made up in part of their registration fees — to pay for a settlement in that case and others.

It was later disclosed in parliamentary testimony that another $7.6 million had been withdrawn from the fund since 1989 for other alleged sexual abuse settlements.

Cromwell reviewed Hockey Canada's governance structure and found that while some provincial federations knew the National Equity Fund responded to historical claims, those members said they "did not think its use would include 'protecting predators' going forward."

Hockey Canada is required to report to its members when new settlements, claims or judgments may cost more than $500,000, but Cromwell found the hockey organization has at times failed to notify members. 

Cromwell identified six cases since 1999 involving settlements exceeding half a million dollars that should have been disclosed. That didn't happen, the report said.

"Our review of members' meetings summaries over that period indicates that members did not receive formal notice of these matters," Cromwell's report said.

"However, Hockey Canada has advised that all of these discussions would occur in-camera and that they did not keep minutes of those in-camera portions of the meeting."

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Cromwell concluded that having the National Equity Fund to "address uninsured and underinsured liabilities is not only sound ... the failure to do so would be a serious oversight." "It is appropriate to use [National Equity Fund] funds to address potential uninsured and underinsured liabilities for Hockey Canada and/or any participant for whose benefit the reserve is maintained," the report said.