If you hire a lawyer for a Class Action Lawsuit in British Columbia what is a reasonable fee to pay?

Class Action Claims lawyers almost always advance the claims on a contingency fee basis.  This is permitted by Part 8 of the BC Legal Profession Act which permits lawyers to charge contingency fees.   Rule 66 of the Legal Profession Act permits the setting of Rules governing these fees and the applicable rules passed by the Benchers are set out in Part 8 of the Law Society Rules which state as follows:

Reasonable remuneration

8-1 (1) A lawyer who enters into a contingent fee agreement with a client must ensure that, under the circumstances existing at the time the agreement is entered into,

(a) the agreement is fair, and

(b) the lawyer’s remuneration provided for in the agreement is reasonable.

(2) A lawyer who prepares a bill for fees earned under a contingent fee agreement must ensure that the total fee payable by the client

(a) does not exceed the remuneration provided for in the agreement, and

(b) is reasonable under the circumstances existing at the time the bill is prepared.

Maximum remuneration in personal injury actions

8-2 (1) Subject to the court’s approval of higher remuneration under section 66(7) of the Act, the maximum remuneration to which a lawyer is entitled under a contingent fee agreement for representing a client up to and including all matters pertaining to the trial of an action, when acting for a plaintiff in

(a) a claim for personal injury or wrongful death arising out of the use or operation of a motor vehicle, is 33 1/3% of the amount recovered, and

(b) any other claim for personal injury or wrongful death, is 40% of the amount recovered.

(2) Despite subrule (1), a contingent fee agreement may provide that the lawyer may elect to forego any remuneration based on a proportion of the amount recovered and receive instead an amount equal to any costs awarded to the client by order of a court.

(3) This Rule does not prevent a lawyer and client from making a separate agreement for payment beyond the amount specified in subrule (1) to compensate the lawyer for representing the client in an appeal from a trial judgment pronounced in the proceeding for which the lawyer was retained.

Form and content of contingent fee agreements

8-3 A contingent fee agreement must

(a) be in writing,

(b) state that the person who entered into the agreement with the lawyer may, within 3 months after the agreement was made or the retainer between the solicitor and client was terminated by either party, apply to a district registrar of the Supreme Court of British Columbia to have the agreement examined, even if the person has made payment to the lawyer under the agreement, and

(c) not include a provision that

(i) the lawyer is not liable for negligence or is relieved from any responsibility to which a lawyer would otherwise be subject,

(ii) the claim or cause of action that is the subject matter of the agreement cannot be abandoned, discontinued or settled without the consent of the lawyer, a law firm or a law corporation, or

(iii) the client may not change lawyers before the conclusion of the claim or cause of action that is the subject matter of the agreement.

Statement of Rules in contingent fee agreements

8-4 (1) A contingent fee agreement between a lawyer and a plaintiff in a claim for personal injury or wrongful death arising out of the use or operation of a motor vehicle must include the following statement, prominently placed:

Under the Rules of the Law Society of British Columbia, without court approval, a lawyer may charge a maximum of 33 1/3% of the total amount recovered in a claim for personal injury or wrongful death arising out of the use of a motor vehicle.

The percentage limit applies to all matters related to the trial of a lawsuit, but does not include any appeal. A lawyer and a client may make a separate agreement for legal fees for an appeal.

Fees charged by different lawyers vary.

(2) A contingent fee agreement between a lawyer and a plaintiff in a claim for personal injury or wrongful death not affected by subrule (1) must include the following statement, prominently placed:

Under the Rules of the Law Society of British Columbia, without court approval, a lawyer may charge a maximum of 40% of the total amount recovered in a claim for personal injury or wrongful death.

The percentage limit applies to all matters related to the trial of a lawsuit, but does not include any appeal. A lawyer and a client may make a separate agreement for legal fees for an appeal.

Fees charged by different lawyers vary.

(3) If a contingent fee agreement includes a provision permitted under Rule 8-2(2), the statement required under subrule (1) or (2) must include the following:

The Law Society Rules allow a lawyer and client to agree that the lawyer may choose to charge the amount of costs awarded instead of a percentage of the amount recovered.

In addition to the above protections, the BC Class Proceedings Act provides additional safegaurds to ensure that fees are reasonable in Class Action Lawsuits.

This safeguard is necessary because once certified a lawyer chosen by a class representative represents the interests of the entire class which could include thousands of people.

One of the key protections is requiring Court Approval of lawyers fees in Class Action Lawsuits.  Specifically, section 38 of the Class Proceedings Act sets out the following requirements for lawyer fees in BC Class Action Lawsuits:

Agreements respecting fees and disbursements

38 (1) An agreement respecting fees and disbursements between a solicitor and a representative plaintiff must be in writing and must

(a) state the terms under which fees and disbursements are to be paid,

(b) give an estimate of the expected fee, whether or not that fee is contingent on success in the class proceeding, and

(c) state the method by which payment is to be made, whether by lump sum or otherwise.

(2) An agreement respecting fees and disbursements between a solicitor and a representative plaintiff is not enforceable unless approved by the court, on the application of the solicitor.

(3) An application under subsection (2) may,

(a) unless the court otherwise orders, be brought without notice to the defendants, or

(b) if notice to the defendants is required, be brought on the terms respecting disclosure of the whole or any part of the agreement respecting fees and disbursements that the court may order.

(4) Interest payable on fees under an agreement approved under subsection (2) must be calculated

(a) in the manner set out in the agreement, or

(b) if not so set out, at the interest rate, as that term is defined in section 7 of the Court Order Interest Act, or at any other rate the court considers appropriate.

(5) Interest payable on disbursements under an agreement approved under subsection (2) must be calculated

(a) in the manner set out in the agreement, or

(b) if not so set out, at the interest rate, as that term is defined in section 7 of the Court Order Interest Act, or at any other rate the court considers appropriate, on the balance of disbursements incurred as totalled at the end of each 6 month period following the date of the agreement.

(6) Amounts owing under an enforceable agreement are a first charge on any settlement funds or monetary award.

(7) If an agreement is not approved by the court or if the amount owing to a solicitor under an approved agreement is in dispute, the court may

(a) determine the amount owing to the solicitor in respect of fees and disbursements,

(b) direct an inquiry, assessment or accounting under the Rules of Court to determine the amount owing,

(c) direct that the amount owing be determined in any other manner, or

(d) make any other or further order it considers appropriate.

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On May 22, 2009 a claim under the BC Class Proceedings Act (a Class Action lawsuit) was filed in the BC Supreme Court (Victoria Registry) against the University of Victoria seeking repayment of  parking fines collected by the Univsersity.

The Claim was filed on behalf of Plaintiff Kayla Christine Cheeke who seeks to have the claim certified on behalf of ‘those individuals who paid fines for parking offences as set out in the University of Victoria Traffic and Parking Regulations from on or about July 1, 1999 to April 9, 2009.’

You can click here to read the Statement of Claim.  In short, the Plaintiff alleges that Parking Fines collected by the University of Victoria (UVic) were collected unlawfully in that the University lacked the power to enact and collect parking fines.

While I normally don’t post about cases that I and my firm are directly involved in, Class Action lawsuits are by definition public and getting the word out to the potential class is essential.

If you or anyone you know paid a parking fine to the University of Victoria, Simon Fraser University (SFU) or the University of Northern BC (UNBC) and are interested in learning more about this claim you can click here to contact me.

Are you thinking of starting a Canadian Class Action Lawsuit or wondering if a Class Action is underway that affects your interests?  If so the first place you should turn is the Canadian Bar Association’s National Class Action Database.

This is a wonderful resource that  ‘is designed to give lawyers and the public easy access to court documents submitted with regard to class action lawsuits currently underway across the country.‘.

Once you enter this database you can search filed Class Actions (pre and post certification) in Canada.  This database not only contains class action lawsuits arranged by date of filing and Province of filing, but also contains a summary of each purported class and has PDF copies of the initiating court documents.

While this is a voluntary initiative, many jurisdictions require class actions to be reported to this national database.  The Honourable Chief Justice Brenner of the BC Supreme Court gave a Practice Direction in December, 2006 requiring the following:

within 10 days of service or filing, whichever is earlier, a copy of any:

1.  originating process; or

2.  notice of motion for certification (not including affidavits in support); or

3.  amendments to the foregoing

must be sent electronically to the National Class Action Database of the Canadian Bar Association…

Assuming that BC Lawyers comply with this Practice Direction the Database should contain very timely information of all BC Class Action Lawsuits.  For this reason the CBA’s database is great resource and recommended starting point for anyone considering a class action lawsuit in Canada.

If the representative Plaintiff in a Class Action Lawsuit wishes to change counsel can this be done and if so what factors should a Court consider?

A recent case from the Ontario Court of Appeal (Fantl v. TransAmerica Life Canada) was released last month dealing with this issue.

While this blog deals with British Columbia Class Action Lawsuits this Ontario case is of general significance in this area of law and could well hold some persuasive reasoning if any similar applicaitons are raised in BC Courts.

In this case the representative Plaintiff retained a lawfirm (Roy Elliott Kim O’Connor) to advance his claim against TransAmerica.  During the Course of litigation the lawfirm disolved and some of the lawyers involved in the litigation went on to form a firm named Kim Orr while other lawyers went on to form a firm named Roy Elliott O’Connor.  The Plaintiff chose Roy Elliott O’Connor to represent him and the certificed class after disoluion.   The lawfirm Kim Orr brought a motion seeking an order requiring the representative Plaintiff (and the certified class) to retain their firm in this lawsuit.

This motion was dismissed and the claim was appealed to the Ontario Court of Appeal for their consideration.  In dismissing the Appeal the Court carefully considered the issues of choice of counsel by representsative Plaintiff’s and the circumstances when courts can intervence and require change of counsel.  The highlights of this discussion are reproduced below:

Issue 2: Test for reviewing a plaintiff’s choice of counsel

[48] The parties vigorously disputed the test to be applied when the court reviews a representative plaintiff’s choice of counsel. In his reasons, the motion judge correctly identified the issues and canvassed the relevant case law in deciding that question. In my view, he made no error in holding that the choice of counsel upon REKO’s dissolution was a matter for Mr. Fantl to deal with and that his decision did not warrant interference by the court.  Nonetheless, I would arrive at that result for different reasons and based on a different analysis than that of the motion judge.

[49] The appellant has argued that this court should evaluate Mr. Fantl’s choice of counsel by determining whether he was acting in the “best interests of the class” in so choosing. On the other hand, the respondent contends that the motion judge was correct in applying a test of adequacy to Mr. Fantl’s choice of counsel. In my view, both approaches miss the mark. Once the court’s jurisdiction is engaged, any review by the court of a decision as to choice of counsel must be directed to three factors:

(1) Has the plaintiff chosen competent counsel?

(2) Were there any improper considerations underlying the choice made by the plaintiff? and

(3) Is there prejudice to the class as a result of the choice?

[50] Unless this inquiry reveals something unsatisfactory to the court, it ought not to interfere with the choice of counsel made by the plaintiff. The court is not a substitute decision maker for the plaintiff in the litigation. Accordingly, any intervention based on its supervisory jurisdiction must be limited to situations where there is cogent evidence that steps taken may have an adverse impact on the absent class members.

[51] In formulating these criteria for review of the choice of counsel by the plaintiff, I am necessarily rejecting the argument of the appellant that the only test to be applied by the court is whether the choice is “in the best interests of the class”. It must be remembered that the broad and guiding “best interests” principle developed in recognition of the distinction that must be made between the interests of individual class members and the interests of the class as a whole when the court is considering certain issues: see Parsons v. Canadian Red Cross Society(1999), 40 C.P.C. (4th) 151 (Ont. S.C.), Ford v. F. Hoffman-LaRoche Ltd. , (2005), 74 O.R. (3d) 758 (S.C.), andOntario New Home Warranty Program v. Chevron Chemical Co. (1999), 46 O.R. (3d) 130 (S.C.). Here, the context is very different.

[52] Moreover, where the issue before the court is the plaintiff’s choice of counsel, insofar as the “interests of the class” must be considered, they are sufficiently addressed under the prejudice criterion. Where there is no prejudice, the choice of “competent counsel” who has not been selected for any improper purpose will also be in the interests of the class.

[53] By applying these criteria, the court avoids the “contest” approach proposed by the appellant, which pits two sets of competing lawyers against each other and undermines the role of the representative plaintiff in selecting counsel. Such an approach is neither necessary nor productive where, as here, competence is conceded and there is no evidence that the plaintiff has acted improperly or in a manner that prejudices the interests of the class.

[54] The appellant contends that the “contest” approach is appropriate in the present circumstances because the choice of counsel is analogous to a carriage motion. I disagree. A carriage motion is a motion to determine which of two or more overlapping, competing intended class actions should be allowed to proceed and which should be stayed. A carriage motion involves a competition which, of necessity, requires a comparison of the competing proceedings.  Unlike a carriage motion, there is no competition between proceedings here. It is for this reason that any analogy between a carriage motion and the present circumstances breaks down.

Application of the test to the instant case

[55] The instant proceeding involves the choice of counsel upon dissolution of the class counsel law firm.  The retainer agreement was entered into between Mr. Fantl and REKO, and not with Mr. Kim or any other individual lawyer. A team of lawyers at the predecessor firm dealt with the case.

[56] On dissolution, some of the team formed the appellant, some formed REO and one lawyer joined another firm. Lawyers in each of these factions had participated in the work on the file to varying degrees. The lawyer who did the most work on the file was the associate who left and went to an unrelated firm.

[57] The record indicates that, although Mr. Kim was the senior partner on the case, he did not take instructions from, or report to, Mr. Fantl, and that he only accompanied Mr. Fantl to cross-examinations. He attended one settlement meeting with the defendant at which defendant’s counsel offered to settle the claim, expand the class definition and communicate this development to class members.

[58] In the context of this file, and in the eyes of Mr. Fantl, there was more to the REKO firm than just Mr. Kim. Mr. Fantl was faced with three choices. He could go with the appellant, the REO firm or choose a different firm. He chose the REO firm.

[59] The appellant argues that the failure to retain KO was akin to a dismissal of counsel. I do not accept this characterization of the facts before this court. The appellant was not terminated by the plaintiff. Indeed, KO had no relationship with the plaintiff capable of termination. Rather, its complaint is that the plaintiff did not choose to retain its lawyers after REKO’s dissolution.

[60] Turning to the first factor of the test, competence of counsel of choice was conceded in the present case. I note the appellant’s submission that competence of counsel is not a useful benchmark since every lawyer in Ontario is competent and thus no motion challenging a plaintiff’s choice of counsel is likely to ever be successful. I disagree. Where competence is a live issue, the court should consider under this head:

(1) The nature of the lawsuit;

(2) The complexity of the litigation;

(3) The fact that it was a class proceeding;

(4) The experience of counsel as to subject matter and class actions;

(5) The resources of counsel;

(6) The stage of the proceedings at which the review occurs; and

(7) Any other considerations the court might deem to be appropriate.

[61] Moreover, when considering competence of counsel, the court must take into account the fact that, after certification, class counsel will be in a solicitor-client relationship with the class members, with all of the responsibilities that entails, extending until the implementation of a settlement or final disposition of any individual issues. In other words, given that the class may include a large number of people, this obligation may be significant and prolonged: see generally Cassano v. The Toronto-Dominion Bank , (2007), 87 O.R. (3d) 401 (C.A.), and Ward-Price v. Mariners Haven Inc. , (2004), 71 O.R. (3d) 664 (S.C.), at para. 7.

[62] These criteria serve to advance an object of the CPA, namely to obtain first class representation for class members.

[63] Turning to the second factor, there is no evidence of any improper purpose or motive on the part of the plaintiff in making his decision to retain REO. The appellant points to the plaintiff’s friendship with Mr. Roy, one of the partners of REO, as the driving factor in choice of counsel. While that was a consideration, it was not the only factor for the plaintiff’s choice of counsel. As noted by the motion judge and as indicated in the record, Mr. Fantl was attracted to REO because of the competence of counsel, which is not disputed, and its reputation in class action work.

[64] In any event, I would not accept that the fact of an acknowledged friendship between the plaintiff and his counsel of choice would constitute an improper purpose in and of itself. An improper purpose would be one where the plaintiff was seeking to gain a personal advantage, the hope of an advantage not shared by the class members or was motivated in some way that was inconsistent with the interests of the class.

[65] Turning to the third factor, to the extent that prejudice was argued by the appellant, this line of argument focused on the economic prejudice to the appellant rather than on any prejudice to the interests of the class.  The appellant emphasized what was characterized as the policy arguments in support of entrepreneurial lawyers, which were said to advance one of the goals of the CPA – access to justice. Effectively, the appellant’s argument is that it would be unfair for a plaintiff, upon dissolution of his or her counsel’s law firm, to choose any lawyer other than the lawyer who had previously acted as the lead counsel. In other words, in a class action, the lawyer’s time and effort on the file constitutes an equity investment by the lawyer in the case. It is argued that if representative plaintiffs are allowed to switch counsel at will, there will be less of an incentive for counsel to take on class actions and make an investment of time and effort that may be lost.

[66] There is no question that class proceedings are entrepreneurial in nature. However, the proposition advanced by the appellant would only be supportable if the creation of an entrepreneurial class action bar was a policy goal underpinning the CPA. This argument fails because as far as the CPA is concerned, the entrepreneurial lawyer is a means to an end, not an end in and of itself. Were it otherwise, one of the criticisms of the CPA, that it promulgates plaintiff-less litigation benefiting only the lawyers involved, would be well founded. Such is not the case.

[67] Sections 33(1) and (4) of the CPA, which provide for contingency fees and a multiplier effect on fees to reward risk and success, are intended to provide sufficient incentives for lawyers to take on class proceedings that would not otherwise be attractive. This is the entrepreneurial aspect of class proceedings legislation that enhances access to justice. The CPA does not, nor was it ever intended to, provide lawyers with a vested interest in the subject matter of the lawsuit entitling them to override the choices of the representative plaintiff in the litigation, including the choice of counsel.

[68] In any event, Mr. Kim’s investment of time and effort in the action while at REKO will be protected through the process of dissolving that firm.

[69] In conclusion, in light of the three factors set out above, namely, that competence of counsel is not in issue, there is no evidence of any improper purpose or considerations in choice of counsel, and no demonstrated prejudice to the class, there is no reason to interfere with the choice of counsel by Mr. Fantl.


British Columbia Class Action Lawsuits are governed by the BC Class Proceedings Act.

When a Plaintiff files a claim in the BC Supreme Court and wishes to get it ‘certified’ as a Class Action what factors are considered by the court?  Reasons for judgement were released this week by the Mr. Justice Goepel of the BC Supreme Court discussing this area of the law.

In this week’s case (MacFarlane v. United Parcel Service Canada Ltd.) the Plaintiff filed a claim against UPS Canada for allegedly improperly collected charges.  The Plaintiff sought to be appointed as the representative of the following class of persons:

All persons who paid to United Parcel Service Canada Ltd., while resident in British Columbia, Fees charged by United Parcel Service Canada Ltd., which include Custom Brokerage Fees, Disbursement Fees (also known as Bond Fees) and C.O.D. Fees plus applicable Goods and Services Taxes.

Mr. Justice Goepel found that this case was not appropriate certification and dismissed the Plaintiff’s motion.  In doing so he discussed the law relating to the factors relevant to certification as follows:

REQUIREMENTS FOR CERTIFICATION

[25]        The requirements for certification are set out in s. 4(1) of the CPA:

4(1)      The court must certify a proceeding as a class proceeding on an application under section 2 or 3 if all of the following requirements are met:

(a)        the pleadings disclose a cause of action,

(b)        there is an identifiable class of 2 or more persons,

(c)        the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members,

(d)        a class proceeding would be the preferable procedure for the fair and efficient resolution of common issues, and

(e)        there is a representative plaintiff who

(i)         would fairly and adequately represent the interests of the class,

(ii)        has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii)       does not have, on the common issues, an interest that is in conflict with the interests of other class members.

[26]        Section 7 of the CPA illustrates the legislative intention that courts should take a broad remedial approach to the certification of actions.  It eliminates many of the possible impediments to the certification of class actions:

7   The court must not refuse to certify a proceeding as a class proceeding merely because of one or more of the following

(a)        the relief claimed includes a claim for damages that would require individual assessment after determination of the common issues;

(b)        the relief claimed relates to separate contracts involving different class members;

(c)        different remedies are sought for different class members;

(d)        the number of class members or the identity of each class member is not known;

(e)        the class includes a subclass whose members have claims that raise common issues not shared by all class members.

[27]        In recent years, the courts have developed some general principles of law which govern certification applications.  These principles were reviewed in Knight v. Imperial Tobacco Canada Ltd., 2006 BCCA 235, 54 B.C.L.R. (4th) 204 at para.  20:

The Supreme Court of Canada has discussed the approach that ought to be taken by a court to certification issues in a number of recent cases, including Hollick v. Toronto (City), [2001] 3 S.C.R. 158, 2001 SCC 68; [Hollick]; Rumley, supra; and Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 SCR 534, 2001 SCC 46.  What I distill from those cases is that class proceedings legislation ought to be construed generously.  Class actions serve judicial economy by avoiding unnecessary duplication in a multiplicity of actions, improve access to justice and serve to modify wrongful behaviour.  It is necessary that the statement of claim disclose a cause of action, but the certification stage is not a test of the merits of the action.  What the certification stage focuses on is the form of the action.  The key question is whether the suit or portions of it are appropriate for the trial of common issues.

[28]        In determining whether a class proceeding is an efficient and fair procedure by which to try a claim, consideration must also be given to whether the claims have an “air of reality”: Nelson v. Hoops L.P., 2003 BCSC 277 at para. 38.  As noted by Bauman J. (as he then was) in Samos Investments Inc. v. Pattison, 2001 BCSC 1790 at paras. 155-57, 22 B.L.R. (3d) 46, aff’d 2003 BCCA 87, 10 B.C.L.R. (4th) 234:

[155 ]   If certified, this proceeding would subject the defendants to an exceedingly expensive defence against allegations of the most serious nature. One cannot imagine a fraud or conspiracy more scandalous than that pled here. And because of s. 37 of the Act, if certified, the plaintiff will prosecute the proceeding protected from an award of costs against it if it does not make out its allegations, subject only to the limited exceptions set out in s. 37(2).

[156]    This leads counsel, in particular Mr. Wood for CIBC and Mr. Taylor for Mr. Selman, to urge that the court, at the end of its analysis of the statutory criteria for certification, must conduct a reality check, that is, it must ask itself: is there an air of reality to the plaintiff’s claim of an identifiable class with common issues such that considerations of fairness, efficiency and access to justice tip the balance in favour of certification?

[157]    Or is this the case of the artful pleader, who has crafted a claim that meets the “cause of action” criterion (low as the threshold for that is) but one which is utterly lacking in reality as a class proceeding