Ottawa makes unilateral offer (to settle native residential school lawsuits).

The federal government will pay 70 per cent of proven out-of-court damage settlements related to native residential schools and will not limit churches' liability in lawsuits where they are named as plaintiffs.

Deputy Prime Minister Herb Gray announced in Ottawa on Oct. 29 that the government had decided to move unilaterally because of lack of progress in negotiations with the churches.

The announcement means that Ottawa has rejected the churches' demand for a cap on their liability. It also means that plaintiffs who can prove claims of sexual or physical abuse in residential schools may have a quicker route to a settlement.

Anglican church representatives said the announcement does not solve the financial problems of General Synod, the diocese of Cariboo or other dioceses.

"I personally felt it was time to move in this way, in the interests of former Indian residential school students found to have valid claims for compensation and who are ready to settle without court trials," Mr. Gray said in a news release.

Representatives of the four churches, who have been negotiating with Mr. Gray and his representative, Jack Stagg, for 15 months, were surprised by the announcement.

"I welcome the decision as a first step. It will expedite these cases and bring justice to many of the claimants. But I am concerned it was done unilaterally (without the involvement of the churches)," said Archdeacon Jim Boyles, general secretary of the Anglican General Synod and chair of the ecumenical group negotiating with the government.

Mr. Gray said the government made its move because talks with the churches were not producing agreement. "We have been seeking a balance between the responsibility of church organizations and their capacity to pay, in order the end the difference over financial matters.... There remains some distance between us in resolving this important matter," he said.

Negotiations will continue.

The churches are concerned that the federal government is ignoring natives' claim that cultural abuse occurred in the schools, said Mr. Boyles. Many aboriginal people say their language and culture were suppressed - in some cases, cruelly -- in favor of mainstream European, Christian, culture. However, cultural abuse claims have not made headway within the courts so far and a "programmatic approach" is probably appropriate to address cultural issues, said Mr. Boyles.

The federal government has set up a $350 million healing fund and the Anglican church has spent about $750,000 over the past 10 years on various therapy and counseling projects.

The churches are also concerned that the government wants them to pay 30 per cent of the cost of alternate dispute resolution processes, which are less expensive than court cases, but a significant expense nonetheless, said Mr. Boyles. "We do find ourselves in close agreement on the importance of alternate dispute resolution," he added.

In addition, the churches want to continue to discuss an issue that has made no headway with the government - some kind of credit in lieu of cash for the healing and reconciliation work with First Nations people that the church is doing in many locations.

The government announcement said Ottawa will work at enhancing out-of-court dispute resolution processes.

According to Mr. Boyles, about 500 cases are currently in alternate dispute resolution, while another 500 are in pre-trial settlement conferences.

Individual settlements would be arrived at after validation of the claims (probably by an arbitrator) and negotiations between the claimants and the government. "Amounts paid would be confidential and take into account previous court awards in similar situations," said the government's announcement. Court awards - in the few cases that have come to trial so far -- have ranged from $100,000to $250,000 per claimant.

Mr. Boyles said the government's action is encouraging for the churches because it improves on the government's previous stance that the churches pay 50 per cent of damage settlements.

Ottawa currently faces claims from more than 8,500 individuals in more than 4,500 court cases alleging abuse suffered in a boarding school system that operated across Canada from the mid-nineteenth century into the 1970s. Various entities of four churches - Anglican, Presbyterian, United and Roman Catholic - operated the schools under contract with the government.

Plaintiffs who agree on a settlement in pre-trial conferences or who have their claims validated by an arbitrator in an alternative dispute resolution process would be free to sue churches for the 30 per cent not paid by the government, or drop that part of their claim.

In 18 per cent of the lawsuits, Justice Department lawyers have added churches to the suits as third parties, though they were not originally named by plaintiffs.

In June, the government agreed to suspend third-party claims and to provide financial assistance to the churches for travel and accommodation costs during negotiations.

Mr. Gray's announcement does not affect damages that have already been awarded.