A company that built more than 2,000 elevators with faulty brake devices has agreed to pay $12 million to firms that had to repair them, to cover their costs — including the Toronto Community Housing Corporation (TCHC), which led the class-action lawsuit.
In a mediated settlement approved by the Ontario Superior Court of Justice, ThyssenKrupp Elevator Canada Ltd. will compensate companies that were charged in 2006 to replace a part called a sheave jammer, under orders from the Technical Standards and Safety Authority (TSSA).
The safety watchdog discovered problems with the sheave jammers on some 2,000 traction elevators — which operate on steel ropes looped around a “sheave,” or pulley, turned by a motor to raise or lower the car — and ordered them removed.
TCHC, which owns many highrise buildings, had to replace the part on 169 elevators at a cost of $1.9 million, prompting it to launch the class-action lawsuit to recover some of its costs of complying with the safety order.
“The settlement was agreed to by the parties, and approved by the court as being in the best interest of all class members,” said TCHC spokesperson Sinead Canavan.
The settlement allots about $8.4 million for compensation — the rest is lawyers’ fees and administrative costs — but the sum each party receives depends on how many companies end up seeking a share.
Based on an average replacement cost of $10,000 per sheave jammer, if the owners of all 2,100 sheave jammers covered by the settlement make claims, each company will recover about 57 per cent of its cost, wrote Justice Carolyn Orkins, of the Ontario Superior Court of Justice.
But if only 60 per cent of companies file a claim, each would recover about 95 per cent of its costs.