As anticipated, the multiplicity of class actions commenced in
Canada in the Volkswagen Litigation has given rise to carriage wars
across the country. We have previously written about
carriage wars generally, as well as their specific application
in the context of the
Contested Carriage of Ontario Class Action
In November 2015, the Ontario Superior Court of Justice heard a
motion to determine carriage of the proposed Volkswagen national
class action in Ontario. Two firms contested carriage: a national
consortium of class action firms (the "Consortium") and
The Merchant Law Group ("MLG"). MLG also filed class
actions against Volkswagen in other Canadian provinces, and is
engaged in ongoing carriage battles with the Consortium in respect
of those class actions.
On December 4, 2015, Justice Belobaba granted carriage of the
Ontario Volkswagen Class Action to the Consortium. MLG agreed not
to contest carriage in Ontario, and its Ontario action was
However, on January 22, 2016, MLG sent an email to approximately
9500 potential class members, including 3500 Ontario residents,
requesting them to sign a "Contingency Fee Arrangement and
Instructions." The email did not make any reference to the
fact that MLG does not have carriage of the Ontario class action.
In response to this email, 150 Ontario residents signed a retainer
The Consortium brought a motion before Justice Belobaba raising
a number of concerns regarding the MLG email, claiming breach of
the carriage order, seeking an injunction preventing MLG from
sending similar emails in the future, and other relief.
Breach of Carriage Order "Reprehensible"
Justice Belobaba held that the MLG email breached the carriage
order and was an "undisguised attempt to scoop potential class
members with misleading information." The Court ordered MLG to
send a court-approved "clarifying email" to the 9500
recipients of the MLG email. Although an injunction was not
ultimately granted against MLG, the Court held that any further
breaches of the Court Order could be addressed with a motion for
contempt of court. The Court also ordered that MLG will not execute
the 150 retainer agreements. Finding MLG's conduct
"deserving of censure and condemnation, and therefore, by
definition, reprehensible", Justice Belobaba ordered MLG to
pay $40,000 in substantial indemnity costs to the Consortium.
The outcomes of Saskatchewan and Alberta carriage motions
between MLG and the Consortium are pending, but will certainly be
closely followed, as will the outcome of the Ontario Volkswagen
Class Action certification motion scheduled to be heard on June 7
and June 8, 2016.
Certainty of Representation
Justice Belobaba's decision is instructive insofar as it
confirms that class representation, once confirmed by a judicial
order in the context of a contested carriage fight, is not subject
to collateral attack thereafter. This is particularly helpful from
the perspective of putative class defendants, who are entitled to
certainty that class counsel is able to take a position on behalf
of the entirety of the class without fear of having such positions
"second-guessed" or opposed by counsel purporting to
represent particular constituents of the class.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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