Indemnity Agreement Explained

The word NEWS written in vintage wooden letterpress type in a wooden type drawer.

An indemnity agreement is a common element of a legal contract between two parties.  It specifies that one party (the indemnitor) agrees to pay for potential losses or damages incurred by the other (the indemnitee) that may come about as a result of the execution of the contract.

The word indemnity simply means protection from, or compensation for losses incurred.  Such an agreement outlines who will bear the cost.

In the case of the Indemnity Agreement between the Government of Canada, the Federation of Newfoundland Indians, and the Qalipu First Nation, linked below, the Government of Canada agreed to bear any costs that could potentially arise from court actions regarding the implementation of the Supplemental Agreement.

The Supplemental Agreement was signed in June 2013 to resolve issues which prevented conclusion of the Qalipu enrolment process.  For instance, the timeline for review of applications as set out in the Agreement in Principle, was about to expire leaving some 70,000 + applications outstanding.  The Supplemental Agreement provided an extension and the needed resources to review all applications.

By the time the Supplemental Agreement was signed, the Qalipu First Nation had been officially recognized as an Indian Act Band.  Qalipu owned office buildings, was providing employment for many people, it managed large budgets for programs and services, and it represented more than 24,000 status members.  From the point of view of the Qalipu First Nation, who now had much to lose, an indemnity agreement was a very important and responsible decision to make before signing any agreement.

The Indemnity Agreement protects Qalipu from possible financial ruin, from the loss of everything that has been built.

In a recent story published by CBC’s Nic Meloney, for instance, Meloney commented on a potential class-action lawsuit.  The article stated, “If successful, the case will see applications of those involved in the lawsuit reviewed under the original criteria and the potential for Canada to pay damages up to $600 million.” The Indemnity Agreement protects the Qalipu First Nation should the courts make such an award.

As litigation over issues with the enrolment process play out in court, the potential losses are far greater now than they were in 2013, making the Indemnity Agreement more important than ever.

In keeping with our mandate of openness and transparency, all members are encouraged to review the Indemnity Agreement.

Please click here to access the Indemnity Agreement.