OTTAWA -- Reputations may be damaged by the tainted-blood inquiry but that is the price to be paid to ensure that such a disaster is not repeated, the Supreme Court of Canada said yesterday.

In a unanimous decision, the nine justices rejected attempts by the Red Cross and pharmaceutical companies to limit Mr. Justice Horace Krever from making findings of misconduct, saying that doing so would make his investigation pointless.

But the court warned that the Commission of Inquiry on the Blood System in Canada must be careful in its wording so as to not impute any "criminal culpability or civil liability" on those named.

Practically speaking, the ruling means that the much-anticipated report will be published on Nov. 21, and that Judge Krever will be free to assign blame to both individuals and institutions for any "moral, legal, scientific, social or political" failings that he discovered during the inquiry.

In confidential notices sent out in December, 1995, Judge Krever enumerated more than 300 such acts of misconduct against Red Cross officials, government bureaucrats, politicians and consumer groups.

The legal battle delayed publication by about 18 months and, by some estimates, may have cost $15-million, as much as the inquiry itself.

Beyond the impact on the tainted-blood inquiry, the court ruling established clear guidelines for future inquiries that were welcomed by all parties.

"I think this is probably the most important historical decision in Canada on inquiries," said Dawna Ring, counsel for the Infected Spouses and Children Association, an intervenor in the case. "The court has supported inquiries as a process for developing public policy. . . . That is a victory for democracy."

Bonnie Tough, counsel for the Canadian Hemophilia Society, shared that view. "The court has recognized that inquiries play a crucial role in investigating tragedies," she said. "Specifically, in this case, the justices underlined the importance of the blood system and the role of the inquiry in restoring the faith of Canadians."

An estimated 3,000 Canadians may die from tainted blood. Between 1980 and 1990, more than 1,200 Canadians were infected with the AIDS virus, and another 12,000 people contracted the hepatitis C virus.

Judge Krever's mandate is to explain how the tragedy occurred and to make recommendations for revamping the blood system that will prevent a repetition of the public-health disaster. The court ruled that he cannot complete that task without having free rein to report facts, no matter how damaging to individuals.

Claude Houde, acting secretary-general of the Red Cross, said the legal dispute placed a disproportionate amount of attention on the charity, and the ruling reiterated that problem.

"We had hoped that Red Cross and federal officials would not be left to stand alone to accept the blame for problems in a blood system in which the Canadian Red Cross was only one of more than a dozen parties involved in the decision-making process," he said in a statement.

Earl Cherniak, counsel for the Canadian Red Cross Society, said he was "obviously disappointed" with the ruling, but at least the court has established its "philosophical position" to favour the broad public interest in instances such as these.

"The Supreme Court clearly said that the goal here is full and free public inquiries limited to their terms of reference, and if there is damage to reputations that is something people have to live with. It does not happen to be a philosophy I agree with, but it is the final word," he said.

At the same time, Mr. Cherniak said, the ruling will "make it impossible" for the findings of inquiries to be used in civil or criminal proceedings, where the rules of evidence are different.

Pierre Lavigne, lawyer for the Hepatitis C Group of Transfusion Recipients and Hemophiliacs, disagreed, saying the publication of an "uncensored report opens the door wide to indemnification," either in the courts or through a government compensation program. (Most people who contracted the AIDS virus from blood have received compensation, but those who contracted hepatitis have not.)

Lindee David, executive director of the Canadian Hemophilia Society, said the problem is not that some individuals have been singled out but that a number of elected officials will not be named.

"The whole process has been compromised because politicians have not been held accountable for their actions," she said. Ms. David also called on the ministers to pledge, in advance, to implement Judge Krever's recommendations.

Mr. Lavigne said his clients were bitter about the legal proceedings, viewing them as a massive waste of time and money. "The delay has cost victims money, and it has cost some of them their lives," he said. He estimated the court cases cost a total of $15-million. Other lawyers said that estimate was too high, but would not put forward a figure.

Janet Conners, who contracted the AIDS virus from her hemophiliac husband Randy, agreed that the process was draining, financially and emotionally.

"It's not a victory for us, it's a relief," she said.

Ms. Conners said she cannot help but take the cynical view that the legal action was designed as a stalling tactic meant to lessen the potential for lawsuits. It is estimated that 200 to 300 victims of tainted blood died during the 18-month delay.

Paul Lamek, counsel for the commission of inquiry, would say only that the "commissioner is very pleased that he can go ahead and complete his task.

It's nice that the issue has been resolved so clearly, and 9-0 is pretty convincing."

On Dec. 21, 1995, the final day of scheduled hearings, Judge Krever sent out confidential notices under Section 13 of the Inquiries Act, notifying 95 individuals and institutions that they may be subject to potential allegations of misconduct.

One month later, the Red Cross, Ottawa, six provinces, five pharmaceutical companies and 64 individuals who worked in the blood system asked the Federal Court to quash those notices and stop the inquiry from making any findings that could serve as the basis for criminal or civil proceedings.

During the Federal Court proceedings, Judge Krever's counsel announced that 47 people (most of them former provincial health ministers) who had received notices would not be named adversely in the final report. As the legal case dragged on, governments, individuals and companies dropped out.

In the end, only the Red Cross, Bayer Inc., Baxter Corp. and 11 senior Red Cross employees remained as appellants. The ruling does not mean, however, that they will necessarily be named or that they will be singled out for more blame than others.

In the ruling released yesterday, Mr. Justice Peter Cory wrote that "Section 13 of the [Inquiries] Act makes it clear that commissioners have the power to make findings of misconduct. In order to do so, commissioners must also have the necessary authority to set out the facts upon which the findings of misconduct are based, even if those facts reflect adversely on some parties.

If this were not so, the inquiry process would be essentially useless." Judge Cory wrote that the findings of fact are crucial to giving credence to recommendations. "Obviously, reputations will be affected. But damaged reputations may be the price which must be paid to ensure that if a tragedy such as that presented to the Commission in this case can be prevented, it will be."

While the court worried that inquiries could go too far in doling out blame, it praised Judge Krever for offering procedural protections that were "extensive and exemplary."

Chronology

Oct. 04, 1993: Federal government announces the creation of the Commission of Inquiry on the Blood System in Canada.

Nov. 23, 1993: Preliminary public hearings begin. The head of commission, Mr. Justice Horace Krever, grants intervenor status to 25 groups.

Feb. 14, 1994: First witnesses are heard. The public hearings continue for almost two years, travelling across Canada.

Oct. 26, 1995: Commission lawyers invite parties to make submissions on what findings of misconduct the inquiry should make.

Dec. 21, 1995: Last day of public hearings. Judge Krever issues notices to 95 public-health officials, corporations and governments warning that they may be subject to "potential allegations of misconduct" in his report, as required to do under the Inquiries Act.

Jan. 19, 1996: The Red Cross, Ottawa, six provinces, five pharmaceutical companies and 64 individuals ask the Federal Court of Canada to prevent the inquiry from making any findings that could serve as the basis for criminal or civil proceedings.

March 13, 1996: The Federal Court rejects a bid by the Red Cross to force the inquiry to make its internal correspondence public.

March 18, 1996: Judge Krever accuses the federal government of undermining his judicial independence by threatening to stop the inquiry unless allegations are dropped against federal officials.

May 22, 1996: Federal Court hearings begin.

June 27, 1996: Federal Court rules that Judge Krever is free to assign blame, if he wishes, to 14 Red Cross officials and three from the federal government. It forbids the inquiry from making allegations against 47 other individuals.

Jan. 17, 1997: The Federal Court of Appeal, in a unanimous decision, upholds the inquiry's right to make allegations of misconduct, against all but one person.

Jan. 30, 1997: The Red Cross and two pharmaceutical companies announce they will appeal to the highest court. Ottawa and the provinces decide not to pursue the case.

March 28, 1997: Supreme Court grants the Red Cross leave to appeal.

April 18, 1997: The federal government extends Judge Krever's deadline until after the Supreme Court ruling after the commission refuses to issue a partial report.

June 25, 1997: A day-long hearing is held in the Supreme Court.

Sept. 26, 1997: Supreme Court rules, in a unanimous judgment, that the commission may make allegations of misconduct.

Nov. 21, 1997: Deadline for completion of Krever report.

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