Michela Gregory

This is the third appeal in a class action arising from the acquisition of London Life by Great-West Life.

The class alleged that participating policy account (PAR) transactions violated the Insurance Companies Act.

The trial judge found breaches and awarded class counsel fees of $16.4 million with a first charge over the $56.43 million returned to PAR accounts, awarded $4 million in partial indemnity costs to the class, and imposed a levy in favour of the Law Foundation of Ontario.

The appellants challenged the class counsel fees, costs award, and levy.

The majority upheld all trial judge decisions, while the dissent argued that no monetary award was made to the class and therefore no charge could attach to the PAR accounts.

The plaintiffs moved under Rule 59.06(2)(c) to enforce a prior trial judgment's prohibition against the defendants debiting defence costs from participating accounts.

The defendants had allocated 50% of legal costs to these accounts prior to the judgment without seeking leave.

The court found that the prohibition order, which enjoined the defendants from debiting "any costs or expenses incurred... in the defence of these actions" applied retrospectively to all costs, whenever incurred, and was not merely prospective.

The court rejected the defendants' functus officio argument, affirming its jurisdiction under Rule 59.06(2)(c) to carry its orders into operation.

The defendants were ordered to move for leave to charge the previously allocated legal costs.

This endorsement addresses the approval of class counsel fees, plaintiffs' costs, defendants' costs, and the Law Foundation of Ontario's levy following a decade-long class action concerning the legality of Par account transactions (PATs) by London Life and Great-West Life.

The court approved class counsel fees of $16.4 million, found the plaintiffs entitled to $4 million in partial indemnity costs from the defendants, and denied the defendants' claim for costs.

It also determined that the Law Foundation of Ontario was entitled to a levy of $1,520,346.50 (repayment of disbursements) plus 10% of the net monetary award ($4,030,000), totaling $5,550,346.50, to be paid from the participating accounts.

The court clarified that a "monetary award" for the purposes of the Class Proceedings Act and the Law Society Act includes funds paid to the benefit of class members through participating accounts, even if not directly distributed to individuals.