COURT FILE AND PARTIES

COURT FILE NO.: CV-09-378905CP
DATE: 20131113

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lylene Roveredo and Sahodra Premsukh / Plaintiffs

AND:

Bard Canada Inc., C.R. Bard Inc. and Davol Inc. / Defendants

Proceeding under the Class Proceedings Act, 1992

BEFORE: Justice Edward Belobaba

COUNSEL: Harvin Pitch and Colin Stevenson for the Plaintiffs

Michael Eizenga and Christiaan Jordaan for the Defendants

HEARD: November 8, 2013

ENDORSEMENT

[1] The parties have settled this proposed class action. The plaintiffs now bring this motion for certification of the action as a class proceeding (on consent), approval of the settlement agreement and approval of class counsel fees.

[2] For the reasons set out below, I am satisfied that the matter should be certified as a class proceeding and that the settlement is fair and reasonable and in the best interests of the class. I am also satisfied that the legal fees proposal, minus the taxes, should be approved.

Background

[3] This medical-devices class action was commenced on behalf of individuals who had been implanted with certain surgical mesh products (“the Covered Products”) used to repair ventral or abdominal hernias. The plaintiffs allege that the defendants failed to warn Canadian patients of the Covered Products’ risk of failure which allegedly could result in serious injuries and even death.

[4] Most of the Covered Products were made of one layer of expanded polytetrafluoroethylene attached to two layers of monofilament polypropylene mesh that surrounded a flexible “memory recoil ring” (“Ring”) made of polyethylene terephthalate. The plaintiffs have alleged that as a result of improper design, the Ring had inadequate weld strength and could break (“Ring Break”) causing serious bodily injury or even death; or fold into an abnormal configuration (“Buckle”) causing less serious but still significant injuries.

[5] In addition to this action, three other proposed class proceedings were launched - in B.C., Alberta and Quebec.[^1] A national settlement has now been achieved and is conditional on this court’s approval. Under the settlement agreement, the defendants will pay $1.375 million into a settlement fund. After deducting legal fees, notice and administration costs, and a 10% payment to the Class Proceedings Fund, the balance will be paid out to class members. As it turns out, there will likely be no more than 12 to 15 eligible class members who on average will probably receive a payment in the range of $15,000 to $40,000 from the settlement fund.

[6] The $1.375 million settlement is a far cry from the $300 million that was initially claimed in the statement of claim. The modest settlement amount herein reflects a harsh reality of class action litigation: unpredictability. Plaintiffs’ counsel had reasonably assumed that because some 300 surgical mesh patients in the U.S. had experienced Ring Breaks (resulting in damage awards often exceeding $1 million per patient) that at least 30 or 40 similar patients would be found in Canada. Unfortunately for class counsel, who spent many thousands of dollars on an extensive advertising campaign, not a single Ring Break patient was located north of the border. Class counsel did find about twelve patients in Canada who had experienced the Buckle problem but these awards will be much more modest, in the $15,000 to $40,000 range. Hence, the $1.375 million settlement.

Certification

[7] Under s. 5(1) of the Class Proceedings Act, 1992,[^2] (“CPA”) the court shall certify a proceeding as a class proceeding if: (a) the pleadings disclose a cause of action; (b) there is an identifiable class; (c) the claims or defenses of the class members raise common issues of fact or law; (d) a class proceeding would be the preferable procedure; and (e) there is a representative plaintiff or defendant who would adequately represent the interests of the class without conflict of interest and there is a workable litigation plan.

[8] Where certification is sought for the purposes of settlement, all the criteria for certification must still be met: Baxter v. Canada (Attorney General) (2006), 2006 41673 (ON SC), 83 O.R. (3d) 481 (S.C.J.) at para. 22. However, compliance with the certification criteria is not as strictly required because of the different circumstances associated with settlements: Bellaire v. Daya, [2007] O.J. No. 4819 (S.C.J.) at para. 16.

[9] The proposed class includes “all residents in Canada who were implanted with any of the Covered Products, being the following hernia repair products that were researched, developed, tested, manufactured, marketed, distributed or sold by one or more of the Defendants: Kugel Mesh, Kugel Composix, Modified Kugel or Ventralex.” The claim asserts viable causes of action for negligent design and failure to warn. There is an identifiable class of two or more persons.[^3] The proposed “breach of a duty of care” common issue will definitely advance the litigation. The class proceeding is the preferable procedure and there is no doubt but that the plaintiff has fairly and adequately represented the interests of the class to date and will continue to do so until the matter is completed.

[10] In sum, I find that all of the criteria for certification as set out in s. 5 of the CPA have been satisfied.

Settlement approval

[11] Under s. 29(2) of the CPA, a settlement of a class proceeding must be approved by the court to be binding on the parties. To approve the settlement, the court must find that in all the circumstances the settlement is fair, reasonable, and in the best interests of those affected by it: Dabbs v. Sun Life Assurance, [1998] O.J. No. 1598 (Gen. Div.) at para. 9.

[12] As class counsel explained in their written submissions, even if the claim was certified, the common issues trial was successful, and the defendants were found liable in negligence or for failure to warn, the individual class members would still have to prove, on an individual basis, that the failure of the Covered Product resulted from inadequate design and was not due to other factors for which the defendants were not responsible. Class counsel have reviewed hundreds of implant and explant records provided by class members and in all but twelve, they found no evidence that the Covered Product had buckled, notwithstanding that the class members had to have the Covered Product removed. In short, the ongoing litigation risks were substantial.

[13] Although nowhere near the initial $300 million claim, the $1.375 million settlement, even after legal fees, will provide the 12 to 15 Buckle patients with a significant compensation payment. The size of the class is modest but the recovery for each member is significant.

[14] The plaintiff submits that in all the circumstances, the settlement is fair and reasonable and in the best interests of the (very small) class. I agree with the plaintiff. The settlement agreement is approved.

Legal fees approval

[15] Class counsel’s retainer agreement provided for counsel fees of 30% on the first $20 million (subject to court approval) and the payment of all disbursements. I note that there was no mention of taxes.

[16] Most judges, myself included, are prepared to approve contingency fees in the range of 20% to 25%. If more is being sought, such as the 30% herein, class counsel are typically required to make further submissions justifying these additional five percentage points. Here, however, I am satisfied that the full 30%, as requested, should be approved.

[17] Here, as already noted, the initial $300 million claim, unexpectedly collapsed and class counsel realized that only about a dozen class members would actually qualify for compensation and that the recovery per claimant would be much smaller. Yet, the legal work that had to be done on behalf of the entire (potential) class was done and the dozen or so claimants that will receive compensation will receive, what is for each of them, a significant amount of compensation. Success was achieved, at least for the handful of eligible class members who will be properly compensated. It would therefore be unfair in the extreme to deny class counsel a contingency fee award that, by any measure, is a fraction of the legal costs that were actually and legitimately incurred.

[18] The requested 30% contingency fee amount of $412,500 is therefore approved. The $184,125 in disbursements are also approved. The total award is therefore $596,625. If counsel wish to pay the representative plaintiffs an honorarium, that is up to them.

Disposition

[19] The proposed class action is certified and the settlement agreement and legal fees are approved. Order to go accordingly.

Date: November 13, 2013 Belobaba J.

[^1]: The Quebec action has been discontinued; the B.C. and Alberta actions will be dismissed if this settlement is approved. The B.C., Alberta and Quebec class members will be added to the Ontario national class.

[^2]: S.O. 1992, c. 6.

[^3]: The representative co-plaintiff, Sahodra Premsukh, unfortunately died in 2013 for reasons unrelated to any products at issue in this action. Lylene Roveredo asks to be appointed the sole representative plaintiff. I have no difficult doing this given the uncontroverted evidence that there are at least 12 other class members.