Two Canadian law firms have filed a $1.1-billion class-action lawsuit on behalf of former patients of government-run "Indian hospitals," which comprised a decades-long segregated health care system now marred by allegations of widespread mistreatment and abuse, CBC News has learned.

The lawsuit focuses on 29 segregated hospitals operated across the country by the federal government between 1945 and the early 1980s. Researchers say thousands of Indigenous patients may have been admitted to the institutions during that four-decade span.

The facilities were overcrowded and inadequately staffed, alleges the statement of claim. Indigenous patients were unable to leave on their own accord, it continues, and were "forcibly detained, isolated, and, at times, restrained to their beds."

The statement of claim also alleges that "systemic failures created a toxic environment in which physical and sexual abuse was rampant."

Ann Hardy, the representative plaintiff, alleges she is among those Indigenous victims of sexual abuse.

Hardy was diagnosed with tuberculosis as a child while living in Fort Smith, Northwest Territories. In January 1969, she was admitted to the Charles Camsell Indian Hospital more than 700 kilometres south in Edmonton.

At the time, Hardy recalls being excited. She was keen to have a break from her parents, who she described as loving but overprotective, thanks to their experiences attending residential schools.

"It wasn't until much later that I realized the horror of the situation I was in," said the 59-year-old, during an interview at her home in Edmonton.

Ann Hardy as a child, left, playing with a friend during her brief stay at the Charles Camsell Indian Hospital in Edmonton. Hardy alleges staff members at the hospital groped and abused young patients. (Ann Hardy)

'It was terrifying'

During monthly X-ray sessions, Hardy alleges both she and other young patients were groped by male technicians. "It was a regular part of getting an X-ray at the Camsell," she said. She also alleges a male teacher at the hospital read a Playboy magazine during class time, in front of the young students.

But one experience in particular horrified Hardy. She said an orderly often came to visit her room, and would sometimes bring gifts — in one instance, a record player — for her roommate.

"And then he started to come up at night," Hardy said. "He would pull the curtain closed between our two beds, but I could hear what was going on. I could hear the fear, and I could hear what he was doing to her."

Hardy alleges the hospital staff member repeatedly sexually abused her roommate.

Hardy said her roommate, who was a pre-teen, believed the man was her boyfriend. "She explained to me that it's what people do when they love each other."

"It was terrifying," Hardy said.

Jonathan Ptak is a lawyer with Toronto-based firm Koskie Minsky LLP, one of two firms behind the class-action lawsuit. (Paul Borkwood/CBC News)

Government 'respects' plaintiffs' decision

Hardy said she wanted to participate in a class-action in hopes of sharing her story and exposing the mistakes of the past.

The lawsuit was filed on Jan. 25 in Toronto. It's calling for both financial compensation — including damages for negligence and breach of fiduciary duty in the amount of $1 billion, and punitive and exemplary damages in the amount of $100 million — and a declaration that Canada was negligent in its operation of "Indian hospitals."

The alleged physical and sexual abuse within their walls amounted to "horrific treatment," said Jonathan Ptak, a lawyer with Toronto-based firm Koskie Minsky LLP, which filed the lawsuit in conjunction with Sherwood Park, Alta.-based firm Masuch Albert LLP.

These incidents were not happening in hospitals for non-Indigenous patients, he added.

The 29 hospitals listed in the class action are:

Tobique Indian Hospital (New Brunswick).

Manitowaning Indian Hospital (Ontario).

Lady Willington Indian Hospital (Ontario).

Squaw Bay Indian Hospital (Ontario).

Moose Factory Indian Hospital (Ontario).

Sioux Lookout Indian Hospital (Ontario).

Brandon Indian Hospital (Manitoba).

Dynevor Indian Hospital (Manitoba).

Fisher River Indian Hospital (Manitoba).

Fort Alexander Indian Hospital (Manitoba).

Clearwater Lake Indian Hospital (Manitoba).

Norway House Indian Hospital (Manitoba).

Fort Qu'Appelle Indian Hospital (Saskatchewan).

North Battleford Indian Hospital (Saskatchewan).

Peigan Indian Hospital (Alberta).

Sarcee Indian Hospital (Alberta).

Blood Indian Hospital (Alberta).

Morley/Stoney Indian Hospital (Alberta).

Hobbema Indian Hospital (Alberta).

Blackfoot Indian Hospital (Alberta).

Charles Camsell Indian Hospital (Alberta).

Coqualeetza Indian Hospital (British Columbia).

Miller Bay Indian Hospital (British Columbia).

Nanaimo Indian Hospital (British Columbia).

Fort Simpson Hospital (Northwest Territories).

Fort Norman Indian Hospital (Northwest Territories).

Frobisher Bay Hospital (Northwest Territories).

Inuvik Hospital (Northwest Territories).

Whitehorse Hospital (Yukon)

In a statement, the office of Carolyn Bennett, minister of Crown-Indigenous Relations and Northern Affairs, said the federal government "respects" the plaintiffs' decision, adding that "Canada believes that the best way to address outstanding issues and achieve reconciliation with Indigenous people is through negotiation and dialogue rather than litigation."

"We are committed to working with all parties involved to explore mechanisms outside the adversarial court process to deal with these claims," the statement continues.

The class-action lawsuit has not yet been certified and the federal government has yet to file a statement of defence, according to Ptak.

A teacher with students during the 1960s at the Charles Camsell Indian Hospital in Edmonton, one of 29 facilities named in a class-action lawsuit. (Alberta Provincial Archives)

'I'm still dealing with the aftermath'

As CBC News reported on Monday, former patients have come forward in recent years with allegations of physical abuse, forced sterilization and possible medical experimentation at "Indian hospitals" and other facilities that cared for Indigenous patients throughout much of the 1900s.

Despite treating diseases, Hardy said these institutions caused another type of illness. Like many survivors, she is still coping with the psychological trauma of her hospital stay decades after returning home to her family in May 1969.

"I've long since finished the medication for the tuberculosis," she said. "I'm still dealing with the aftermath of the Charles Camsell."