In a duo of decisions released this month, Justice Belobaba of
the Ontario Superior Court of Justice has called on judges and
counsel alike to change the way they approach court approval of
class action settlements.
In Ontario, all class action settlements must receive approval
from the court under section 29(2) of the Class Proceedings
Act. This requirement recognizes that, due to the interests
and incentives of the parties at the negotiating table (class
counsel and the defendants), there is a risk that the settlement of
a class action will result in either a 'sweetheart'
settlement (whereby class counsel agrees to settle for less than
the case is worth) or a blackmail settlement (whereby the
defendants are coerced into settling cases for more than they are
In Sheridan Chevrolet v. Furakawa Electric et al., 2016 ONSC 729 and Leslie v. Agnico-Eagle
Mines, 2016 ONSC 532 Justice Belobaba expressed
concern that, aside from scrutinizing settlement agreements for
indicators of actual collusion or conflict, the courts are
typically not furnished with sufficient information to assess
whether the amount of the settlement falls within the "zone of
In particular, Justice Belobaba took issue with the "boiler
plate" reasons for court approval put forward by some
plaintiffs' counsel. In his view, the generic and somewhat
self-serving statements amount to "we're experienced
class counsel – we know what we're doing – trust
us", which is of little assistance to the judge.
Justice Belobaba therefore required the plaintiffs in both
actions to provide supplementary affidavits outlining how the
settlement amount was arrived at, including details of the range of
possible damages awards and specifics of the litigation risks
relied upon for the reasonableness of the settlement.
While the Court fell short of endorsing a fiduciary role for the
class actions judge in the approval process or appointing
independent counsel to play an adversarial role in the process, the
clear takeaway from these decisions is that parties and counsel can
expect a more rigorous examination of the reasonableness of any
settlement amount in the future.
It's not often that our little blog intersects with such titanic struggles as the U.S. presidential race – and by using the term "titanic" I certainly don't mean to suggest that anything disastrous is in the future.
J.J. v. C.C., is an interesting case in which the court held that an automotive garage owes a duty to minor children to secure the vehicles on the premises by locking the cars and safely storing the car keys...
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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