By Reem Zaia and Darren Johnston

July 18, 2024

In 2012, Canada enacted the Justice for Victims of Terrorism Act (JVTA) to deter terrorism by opening an avenue of legal liability for victims against state sponsors of terrorist acts. Nearly 12 years later, the Act has proven far less effective than it could or should be.

The JVTA allows victims of terrorism who have suffered loss or damage in or outside of Canada after January 1, 1985 to sue certain foreign states. The precondition for commencing a lawsuit in pursuit of monetary damages is that the loss must be the result of an act or omission of a listed terrorist entity or a foreign state whose immunity is lifted by Canada. The act or omission must be punishable under the terrorism-related provisions in the Criminal Code, even if it took place outside of Canada. As one Canadian court put it, in enacting the JVTA, “[i]t was Parliament’s intention to carve out a new exception to state immunity for the purposes of (i) deterring terrorism and (ii) making it easier for plaintiffs to make claims against states that support terrorism and that have assets in Canada that could assist in satisfying a judgment.”

At first glance, the JVTA appeared promising. It empowered victims of terrorism to pursue legal action for compensation if they could establish a substantial connection to Canada, or if the plaintiff is a Canadian citizen or a permanent resident, even if the conduct did not take place in Canada. Unfortunately, it is now clear that the JVTA lacks the force it was meant to have.

In order to sue a foreign state under the JVTA, the state must be listed as a state supporter of terrorism in the State Immunity Act, which precludes the state from immunity. Under the State Immunity Act, the federal Cabinet can list state supporters of terrorism. To date, only Iran and Syria are listed.

While there is no shortage of terrorism-related offences on the books, they remain relatively sparse in terms of their rate of prosecution compared to other crimes. Victims of terrorism are often left with few mechanisms to seek justice short of a conviction through prosecution. The JVTA is one of few potential avenues.

But the Act has serious shortcomings. For one, it currently pre-supposes that state sponsoring of terrorism is perpetrated in only two countries – Iran and Syria.

The 2015-2016 case of Canadian hostages held by Abu Sayyaf in the Philippines demonstrated this shortcoming exceedingly well. Despite the heinous acts committed by the terrorist group, the victims’ families could not bring a legal claim under the JVTA as the Philippines was not a listed foreign state with lifted immunity. To add to the families’ grievances, after the Canadians were executed, the world-renowned British Special Air Service, in conjunction with the Philippine Army, rescued the British hostages from the same location where the Canadians had been held captive.

In addition, it would be impossible to enforce payment from an elusive terrorist group residing outside Canada. The clear requirement that the entity being sued must be a foreign state or a designated entity under the Criminal Code is limiting. How does one seize assets from an individual or a terrorist entity in any event? Perhaps by going after the country that funds the person or entity, but that has, to some degree, proven to be a dead end too.

The JVTA lacks teeth. Even though courts have recognized and upheld judgments from foreign states and some have been successful seizing Iran’s non-diplomatic assets, at issue is always the execution of judgments.

This process is not to be confused with the forfeiture or seizure of assets under the Justice for Victims of Corrupt Foreign Officials Act (also known as the Sergei Magnitsky Act). That Act empowers the federal Cabinet to prohibit Canadians (in or outside of Canada) from having financial dealings or transacting in property with certain foreign nationals who are responsible for, or have committed, gross human rights violations. However, the Sergei Magnitsky Act has nothing to do with victims seeking justice through monetary means, as compared to the JVTA.

While the JVTA has been employed in Ontario, notably in the case of Zarei v. Iranrelated to the downing of Ukraine International Airlines Flight 752 (PS752), its effectiveness is questionable even where plaintiffs have succeeded in pleading their damages before the courts.

The families in Zarei were successful in establishing that the missile attacks on Flight PS 752 were intentional and directly caused the deaths of all onboard. The court agreed that the attack constituted terrorist activity under the Criminal Code. The families moved to enforce judgment, were successful, and were awarded $107 million plus interest in damages, in addition to their costs for the lawsuit.

They moved to seize the assets of three properties belonging to the Islamic Republic of Iran in Canada, as well as bank accounts at Scotia Bank and the Royal Bank of Canada.

In response, the current Minister of Foreign Affairs issued a certificate pursuant to section 11 of the Foreign Missions and International Organizations Act, to certify that the Iranian property constitutes diplomatic property, which enjoys privileges and immunities (a move which is in stark contrast from the foreign policy statement made by the recent designation of the Iranian Islamic Revolutionary Guard Corps (IRGC)). On behalf of the federal Government, the Attorney General of Canada, also argued that non-diplomatic assets were already seized. As a result, the families were circumvented from seizing all of the assets they were rightfully owed.

In October of 2023, the Court of Appeal for Ontario upheld a ruling confirming that the Iranian assets enjoyed diplomatic immunity. The applicants sought leave to appeal from the Supreme Court of Canada, which was rejected on May 30, 2024, foreclosing any possibility of further recourse to recoup certain assets.

These examples make clear that the JVTA lacks teeth. Even though courts have recognized and upheld judgments from foreign states and some have been successful seizing Iran’s non-diplomatic assets, at issue is always the execution of judgments.

For example, with the designation of the IRGC as a terrorist entity, banks could play a key role in identifying and freezing the accounts of IRGC-affiliates or those who engage in transactions with the IRGC. Frozen or seized assets (either provisioned through the Criminal Code or the Sergei Magnitsky Act) could, as Irwin Cotler and Brandon Silver have previously alluded in Policy, be repurposed for judgment in successful JVTA cases. If there were ever a time to consider this, the time is now.

As Canada grapples with its place on the international stage, it is crucial to revisit and reform the existing JVTA framework. The JVTA’s limitations leave victims without meaningful avenues for compensation. A small glimmer of hope exists through class-action certification but the problem around seizing known assets which the Government can shield under the guise of diplomatic immunity remains. Another, more meaningful change requires a broader examination at the policy level, where we start thinking critically about barriers to recouping damages for victims in this space.

If Canada is truly a leader against terrorism and wishes to support victims, it needs to go back to the drawing board with the JVTA. Without some form of justice, the harsh reality for victims of terrorism remains: “It just is”.

Reem Zaia is a lawyer at Gowling WLG (Canada) LLP in Ottawa where she practices regulatory, criminal and national security law, and a part-time professor at the University of Ottawa Law School, where she teaches Extremism in Canada. She is the former Director of Policy and Legal Affairs to the Minister of Public Safety.

Darren Johnston is a lawyer at Gowling WLG (Canada) LLP in Ottawa. He served for 17 years in Canada’s Tier-One Special Operations Force, Joint Task Force Two, where he conducted and led many high-profile national interest operations with agencies such as the Canadian Security Intelligence Service, United States Central Intelligence Agency, Delta Force, and the Special Air Service.