Nunasiavut, which means Our Beautiful land, is the Inuit-governed area of northern Labrador. (CBC)

The Newfoundland and Labrador Court of Appeal has backed the certification of a class-action lawsuit involving thousands of aboriginal people who attended residential schools and allege they were unfairly excluded from a federal compensation settlement.

Wednesday's decision follows an appeal of a June 2010 decision by the Newfoundland and Labrador Supreme Court that gave the class action the go-ahead.

"Individuals who attended schools in Newfoundland and Labrador were excluded from the settlement," said a news release Wednesday from Ches Crosbie, a lawyer representing the Innu, Inuit and Métis claimants.

"[The court's] decision confirms that claims against the government of Canada respecting the operation of schools attended by Inuit, Innu and Métis persons and located in Cartwright, Northwest River, St. Anthony, Nain and Makkovik, can proceed as class actions."

In 2005, Ottawa announced a $2-billion compensation package for aboriginal people who were forced to attend residential schools across Canada from 1949 to 1979.

Two years later, the federal government formalized a $1.9-billion compensation package. The Indian Residential Schools Settlement Agreement includes an initial payout for each person who attended a residential school of $10,000, plus $3,000 per year. Approximately 86,000 people are eligible for compensation.

The federal government is denying any responsibility for the treatment of aboriginal children in Labrador because the schools there were not funded directly by Ottawa.

However, Crosbie's release said: "The claims, which have not yet been proven in court, allege that the government of Canada participated in a scheme to obliterate aboriginal languages, traditions and beliefs in Labrador, through requirement that schoolchildren reside at institutions isolated from their families and communities.

"The claims allege negligence and breach of fiduciary duty," it adds.

Lawyers estimate as many as 6,000 people could be covered by the class action, with about 4,000 of them constituents of the northern Labrador Inuit Nunatsiavut government.

In the news release, Danny Pottle, an official with the Nunatsiavut government, called on the federal government to drop its policy of excluding Labrador Inuit, Innu and Métis from the national reconciliation process.