ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 05-CV-300187CP
DATE: March 13, 2012
BETWEEN:
Suzanne Lavier
Plaintiff
- and -
MyTravel Canada Holidays Inc.
Defendant
COUNSEL:
• Joel P. Rochon and Sakie Tambakos for the Plaintiff
• Sally Gomery for the Defendant
HEARING DATE: March 7, 2012
PERELL, J.
REASONS FOR DECISION
A. INTRODUCTION AND OVERVIEW
[ 1 ] Pursuant to the Class Proceedings Act , S.O. 1992, c. 6 , I approved a settlement under which Class Counsel, Rochon Genova LLP, received an initial fee of $600,000, inclusive of taxes and disbursements. The law firm now seeks court approval of an additional fee of $395,500. The defendant MyTravel Canada Holidays (“MyTravel”) opposes the motion.
[ 2 ] Under the Settlement Agreement, MyTravel funded a settlement fund of $2.25 million for a Class of approximately 4,000 members. After the take-up of the settlement, Class Counsel was entitled to apply for approval of an additional fee, and after Class Counsel’s additional fee, if any, was paid, the residue in the fund was to be refunded to MyTravel.
[ 3 ] The settlement was administered, and $333,306.79 was paid to the 352 Class Members who submitted eligible claims. The take-up rate is 8.85% of the Class Members and 16.7% of the settlement fund. If the additional fee is approved, then Class Counsel will have received a total fee of approximately $1.0 million, which is more than twice the value of the time recorded by Class Counsel and three times the amount of claims actually paid to Class Members.
[ 4 ] MyTravel opposes the approval of the additional fee. It submits that Rochon Genova’s Counsel’s fee cannot be justified. My Travel submits that Class Counsel’s fee must be fair and reasonable, taking into account such elements as the degree of success achieved and proportionality between the total amount paid to Class Members and the fees. It submits that the additional fee can be justified only on the basis of the risk undertaken by Class Counsel, but MyTravel submits risk alone would not and should not justify this additional fee. MyTravel submits that the fee when compared to the take-up is disproportionate and cannot be considered fair and reasonable.
[ 5 ] MyTravel submits that approval would bring into question the extent to which the settlement operated for the benefit of the Class. It submits that the actual take-up reveals that the success achieved by the class action was modest. It submits that the take-up rate either indicates that the action grossly exaggerated the problem or that the means negotiated by Class Counsel to notify Class Members of the settlement were inadequate.
[ 6 ] MyTravel submits that the initial counsel fee was adequate compensation and the additional fees are excessive and, if approved, would create the perception that the lawyers, rather than the Class Members, are the predominate beneficiaries of the settlement. It submits that the low take-up rate shows that the action was not important to the Class as a whole and leaves the impression that Class Counsel negotiated the settlement with its own better interest in mind, a perception that would be exacerbated if any additional fee were approved. MyTravel submits that the optics are bad, and the Court ought not to approve of a counsel fee so disproportionate to the actual take-up by the Class.
[ 7 ] Not surprisingly, Rochon Genova submits that having regard to the risks undertaken, the success achieved, the other criteria for determining whether a counsel fee should be approved, and what it submits is an acceptable take-up for a personal injury class action, the Court should approve its additional fee request. It submits that the initial fee fails to provide an economic incentive for Class Counsel to assume the risks that lead to access to justice for Class Members.
[ 8 ] For the reasons that follow, I approve Rochon Genova’s request for the additional counsel fee. In my opinion, when properly perceived, there are no bad optics and Rochon Geneva’s fee is fair and reasonable. As I will explain, MyTravel’s argument based on the allegedly poor take-up of the settlement fund by the Class over-employs the take-up rate as a factor in determining whether a counsel fee should be approved. In my opinion, in determining whether to approve a counsel fee, both for the immediate case and as a general policy matter, the take-up rate is not always an appropriate measure of whether a fee is fair and reasonable.
B. FACTUAL BACKGROUND
[Text continues exactly as in source…]
Perell, J.
Released: March 13, 2012
COURT FILE NO.: 05-CV-300187CP
DATE: March 13, 2012
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Suzanne Lavier
Plaintiff
‑ and ‑
MyTravel Canada Holidays Inc.
Defendants
REASONS FOR DECISION
Perell, J.
Released: March 13, 2012.