Hunt v. Mezentco Solutions Inc., 2017 ONSC 2140

CITATION: Hunt v. Mezentco Solutions Inc., 2017 ONSC 2140

COURT FILE NO.: CV-13-19436

DATE: 20170407

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

Lisa Arlene Hunt, Ryan Wesley Hunt, Tina Marie Wells, Pamela Worts, Kevin Worts, The Estate of Cher-Lynn Boudreault and John Chesley Prince

Plaintiffs

– and –

Mezentco Solutions Inc. c.o.b. as Marchese Hospital Solutions, Mezentco Inc. c.o.b. as Marchese Health Care, Medbuy Corporation, Windsor Regional Hospital, London Health Sciences Centre, Lakeridge Health, Peterborough Regional Health Centre and Regional Health Authority B (Saint John Regional Hospital)

Defendants

COUNSEL:

Harvey T. Strosberg, Q.C., Sharon Strosberg, Michael Peerless and Sabrina Lombardi, for the Plaintiffs

Dominic Clarke, for the Defendants Mezentco Solutions Inc. c.o.b. as Marchese Hospital Solutions and Mezentco Inc. c.o.b. as Marchese Health Care

Eric R. Hoaken and Lisa S. Lutwak, for the Defendant Medbuy Corporation

Kate A. Crawford, for the Defendants Windsor Regional Hospital, Lakeridge Health, Peterborough Regional Health Centre and Regional Health Authority B (Saint John Regional Hospital)

Anita M. Varjacic, for the Defendant London Health Sciences Centre

HEARD: January 10, 2017

Proceeding under the Class Proceedings Act, 1992

RULING ON MOTION TO APPROVE SETTLEMENT OF CLASS PROCEEDING

verbeem J.:

Nature of the Motion

[1] By order dated October 18, 2016, this action was certified as a class proceeding, on consent, for the purpose of settlement.

[2] The plaintiffs allege that the defendants were negligent in preparing, combining, mixing, compounding, packaging, labelling, selling, purchasing and/or administering certain chemotherapy drugs during the period commencing February 6, 2012 and up to and including April 2, 2013 (the Class Period), which resulted in the representative plaintiffs and other members of the primary class receiving a concentration of chemotherapy medication that was less than the concentration that they were prescribed (“the Dosing Incident”).

[3] The primary Class Members have all been identified with specificity and include all persons, or their estates, who attended at the defendant hospitals (set out below) for treatment during the Class Period and were administered the affected chemotherapy drugs. A second class, defined as the “Family Class”, consists of the living partner, spouse, child, grandchild, parent, grandparent or sibling of a Class Member.

[4] The representative plaintiffs, Lisa Arlene Hunt, Ryan Wesley Hunt, Tina Marie Wells, Pamela Worts, Kevin Worts, The Estate of Cher-Lynn Boudreault and John Chesley Prince, now move pursuant to s. 29 of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (CPA), for an order approving a settlement of the action, which was reached in August 2016, because they say it is fair, reasonable and in the best interests of the members of the class.

[5] In a separate motion, Class Counsel move for an order approving their fees and disbursements, which are claimed in an amount that is less than the amount they would otherwise be entitled to receive, pursuant to the terms of contingency fee agreements that they entered into with the representative plaintiffs.

[6] Class Counsel is comprised of a team led jointly by two senior class action lawyers in the Province of Ontario, specifically, Mr. Harvey Strosberg, Q.C. of the Windsor, Ontario law firm Sutts, Strosberg LLP and Mr. Michael Peerless of the London, Ontario law firm McKenzie Lake Lawyers LLP (McKenzie Lake). Ms. Sharon Strosberg (a member of Sutts Strosberg LLP) and Ms. Sabrina Lombardi (a member of McKenzie Lake) are key members of the Class Counsel team.

[7] The motion to approve the settlement is supported by the defendants, Mezentco Solutions Inc. c.o.b. as Marchese Hospital Solutions (“Marchese”), Mezentco Inc. c.o.b. as Marchese Health Care, Medbuy Corporation (“Medbuy”), Windsor Regional Hospital, London Health Sciences Centre, Lakeridge Health, Peterborough Regional Health Centre and Regional Health Authority B (Saint John Regional Hospital).

[8] Both the Public Guardian and Trustee and the Office of the Children’s Lawyer have been provided with all of the materials filed in respect of the motion to approve the settlement. Neither takes a position with respect to the relief requested.

Factual Overview

[9] Before addressing the specific terms of the settlement, I will briefly detail the Dosing Incident and the ensuing litigation.

[10] Subsequent to the Dosing Incident’s discovery, the Legislative Assembly of Ontario - Standing Committee on Social Policy (the “Standing Committee”) moved to initiate a study and investigation of several aspects of the incident, including “any impact on the nearly 1,200 cancer patients in Ontario who received a flawed or diluted drug during their cancer treatments.”

[11] During its inquiry, the Standing Committee heard a substantial amount of testimony (which comprises over 20,000 pages of transcripts) during the months of April, May, June, September and October, 2013, including evidence from key members of the defendant organizations. It also received other evidence and submissions in writing, and commissioned a report from Dr. Jake J. Thiessen entitled “A Review of the Oncology Under-Dosing Incident” – a report to the Ontario Minister of Health and Long Term Care, dated July 12, 2013. In April 2014, the Standing Committee tabled its own report. The content of the Standing Committee’s report and the Thiessen report, which I will refer to in the course of these reasons, provide important context and background to the issue on this motion.

[12] The defendant, Medbuy, is a health care “group purchasing organization” (GPO). Among other things, Medbuy works under contract with its members, which include healthcare organizations, individual hospitals, groups of hospitals and shared service organizations, to facilitate the purchasing and procurement of goods and services required by its members. At the times material to the action, the hospital defendants were members of the Medbuy GPO.

[13] The plaintiffs allege that the Marchese defendants contracted with the hospital defendants, through Medbuy, to “admix” (“prepare for hospital use”) the active chemotherapeutic drugs gemcitabine and cyclophosphamide. Essentially, both drugs were received in a powder form, then mixed with saline and delivered to the hospital defendants in IV bags, to be administered to patients.

[14] The Standing Committee’s report indicates that in 2011, Medbuy issued a Request for Proposal for the sterile preparation of drugs (including cyclophosphamide and gemcitabine) for hospital use, and eventually, a list of specific services, including gemcitabine and cyclophosphamide admixing, went to tender. Three entities, including Marchese, made submissions in response. Ultimately, Marchese received the highest score through a comprehensive scoring system and was awarded the relevant contract, in the late fall of 2011, which was eventually executed in February 2012. The contract called for Marchese to provide Medbuy-members with 117 different products, including gemcitabine and cyclophosphamide, as admixed.

[15] Ultimately, gemcitabine and cyclophosphamide solutions, as admixed by Marchese, were provided to all of the hospital defendants, although the timing of when the individual hospitals first began to use those admixtures varies. Windsor Regional Hospital was first, starting in February 2012. Peterborough Regional Hospital, where the Dosing Incident was ultimately discovered, was last, starting on March 20, 2013.

[16] The Standing Committee report indicates that on March 20, 2013, a pharmacy technician at the Peterborough Regional Health Centre observed that labels on the IV bags containing the gemcitabine solution that were supplied by Marchese, did not clearly specify the final concentration of the drug in the solution. Conversely, that information had been specified on the labels affixed to the IV bags provided by the organization that supplied the hospitals with admixtures prior to Marchese. Shortly thereafter, it was determined that the labels on the cyclophosphamide admixture IV bags prepared and delivered by Marchese, also failed to clearly specify the final concentration of the drug in the saline solution.

[17] Further investigation revealed that both chemotherapy drugs were overly diluted with saline, when admixed. According to Dr. Michael Rieder, an expert in the field of pharmacology who was retained by the representative plaintiffs, Marchese used pre-filled saline bags to prepare gemcitabine and cyclophosphamide admixtures. Generally, bags containing saline are not water impervious, and over time a small amount of saline fluid transverses the exterior of the bag and evaporates. Accordingly, as a matter of course, manufacturers of pre-filled bags fill the bags with a greater volume of saline than is indicated on the label. However, Marchese admixed the gemcitabine and cyclophosphamide solutions on the basis that the volume stated on the labels was the precise volume in the bags, resulting in the preparation and administration of chemotherapy admixtures that were more dilute than disclosed by the labels on the bags they were contained in. In other words, patients received a lower concentration of the subject chemotherapy drugs, than prescribed.

[18] At the request of the Standing Committee, a comprehensive review of the Dosing Incident was undertaken by Dr. Jake Thiessen, Ph.D. and founding director of the University of Waterloo school of pharmacy. Dr. Thiessen was tasked to lead an independent review of “quality assurance in the province’s cancer drug supply chain”. In his report, Dr. Thiessen traces the timeline of relevant events, identifies the number of people affected by the Dosing Incident, and sets out his recommendations to prevent a similar incident from occurring in the future. In the context of this motion, all counsel rely on the Thiessen report. According to Dr. Thiessen, among other things:

a) The Dosing Incident occurred when Marchese Hospital Solutions employed a process in the preparation of the chemotherapy drugs that failed to adequately compensate for an “overflow factor” in the supplier’s normal saline bags. Dr. Thiessen estimates that the average actual cyclophosphamide concentration, supplied by Marchese and administered to patients, was 10 percent lower than stated on the label. For gemcitabine, the average actual concentration supplied by Marchese was estimated to be 7 percent lower than stated on the label.

b) One thousand two hundred and two (1,202) patients were affected by the Dosing Incident. Of those, 1,007 were under-dosed with cyclophosphamide, 191 were under-dosed with gemcitabine and four patients received both medications. Forty (40) of the patients were pediatric cases. All but 30 patients were being treated for cancer.

c) The affected patients were treated at Windsor Regional Hospital (290 total patients), London Health Sciences Centre (691 total patients), New Brunswick, Saint John Regional Hospital (183 total patients), Lakeridge Health (37 patients) and Peterborough Regional Health Centre (1 patient).

d) There is no evidence of any malicious or deliberate “drug sparing dilution” by Marchese, in preparing bags of cyclophosphamide or gemcitabine solutions.

e) Once alerted to the Dosing Incident, the hospitals quickly made personal contact with each of the affected patients, and the affected products were placed in quarantine. Back-up plans were put in place so that cyclophosphamide and gemcitabine could be obtained from alternative sources. No patients missed any of their scheduled doses of cyclophosphamide or gemcitabine. No changes were made by the hospitals to Class Members’ previously planned chemotherapy treatments. Oncologists at the hospitals generally did not plan any further, or more dose-intensive adult treatments, upon discovery of the Dosing Incident. Patients continued with their regular treatment program. [Emphasis added.]

[19] The evidence on this motion indicates that the total number of patients affected by the Dosing Incident is 1,194, not 1,202. The discrepancy arises from the London Health Sciences Centre initially double counting eight people, when it tallied the number of its patients affected by the Dosing Incident.

[20] With respect to the treatment implications for patients affected by the Dosing Incident, Dr. Thiessen states, at p. 20 of his report:

…Cancer Care Ontario’s record was reviewed regarding all its provisional treatment programs (including adjuvant, curative or palliative) involving these two drugs. Of those patients that commonly receive GEMCITABINE, 74% of their treatment plans include the addition of other drugs (combination therapy). For those commonly receiving CYCLOPHOSPHAMIDE, 96% of their treatment plans use a combination of drugs. Taken at face value, this implies that, in the majority of cases, the under-dosing impact does not rest exclusively upon one drug. The probability, therefore, in combination drug therapy, that a single drug factor, at the stated dosing shortfall, has had an overall serious effect is small, although one cannot establish unequivocally that the impact is completely without risk. For GEMCITABINE, the under-dosing bears the possibility of a greater impact in roughly 26% of the patients because it was the single therapy. Yet, for the two under-dosed drugs, GEMCITABINE’S under-dosing (7%) might be considered to lie within a tolerable margin of error ordinarily permitted in therapy (i.e., ±10%).

The above information about the relatively low degree of under-dosing, along with the prevalence of combination drug use, offers a perspective that is compatible with the oncology decisions at the hospitals. The evidence collected at each of the affected institutions showed that medical oncologists generally did not plan any further or more dose-intensive adult treatments upon discovery of the incident. Patients would simply continue with their regular treatment program.

[21] In its report, the Standing Committee generally endorsed Dr. Thiessen’s recommendations, and, consistent with his findings, the Standing Committee did not find that the Dosing Incident was the result of any deliberate acts, by any of the defendants.

The Litigation

[22] The representative plaintiffs, Lisa Hunt, Tina Wells and Pamela Worts received chemotherapy drugs affected by the Dosing Incident during the Class Period, as did Cher-Lynn Boudreault. Her estate trustee is also a representative plaintiff.

[23] Ryan Hunt is Lisa Hunt’s husband. Kevin Worts is Pamela Worts’ husband. John Prince was Cher-Lynn Boudreault’s common-law spouse. Each of them is a member of the Family Class.

[24] The statement of claim alleges that the negligence of Marchese and Medbuy caused, or contributed to, approximately 1,200 cancer patients in Ontario and New Brunswick (all of whom were receiving cancer treatment at one or more of the defendant hospitals) to receive lower than prescribed dosages of chemotherapy drugs during the Class Period, and that the lower dosages may have resulted in negative treatment outcomes. As a result, the representative plaintiffs claim compensatory damages, punitive damages and/or a restitutionary remedy.

[25] The defendants deny all of the allegations of negligence that are made against them. They have strenuously defended the action on the basis that there is no evidence demonstrating a clinical impact or physical harm to the Class Members, as a result of the administration of the diluted chemotherapy drugs. Further, they posit that the Class Members cannot meet the “significant evidentiary threshold” required for a court to award damages for “mental distress or upset”, resulting from the Dosing Incident.

[26] This action was certified for the purpose of settlement, on October 18, 2016 and notice was sent to the Class Members advising them of the general terms of the settlement agreement, their rights with respect to opting-out of the class proceeding, their rights to object to the proposed settlement and the date, time and location of the settlement approval hearing.

[27] The deadline to opt-out of the litigation and the deadline to submit objections to the approval of the settlement were both specified as December 7, 2016. A total of seven potential Class Members exercised their right to opt-out and one has since opted back in. A total of 49 objections were received by the Claims Administrator. One objection was withdrawn, before the approval motion. At the time they submitted their objections, each objector had the right to “opt-out” of the class proceeding. Had they done so, they would not be bound by the terms of the settlement, if approved. Approximately, 95 percent of the Class Members did not file an objection to the settlement or elect to “opt-out” of the proceeding.

The Terms of the Settlement Agreement

[28] In August 2015, a “memorandum of understanding” was reached between the parties and a “finalized settlement agreement” was executed on August 4, 2016. The essential terms of the settlement agreement provide:

• The defendants will pay the total amount of $1,800,000 for the benefit of the eligible Class Members.

• The total amount of $1,800,000 will be paid to eligible Class Members (those who have not opted-out of the litigation) on a pro-rata basis. The eligible Class Members are not required to complete a claims form or take any other positive action to receive payment. Instead, the Claims Administrator will forward settlement proceeds to each eligible Class Member, on a proactive basis.

• No amount is payable on behalf of the Family Class.

• The defendants will pay the sum of $100,000 for the benefit of the Ontario and New Brunswick health insurers.

• The defendants will pay the amount of $75,000 on account of “Notice and Claims Administration”.

• The defendants will pay the all-inclusive amount of $400,000 on account of Class Counsel fees, disbursements and applicable HST.

• In total, the defendants will pay the amount of $2,375,000.

• There is no reversion, of any portion of the settlement proceeds, to the defendants. In the event that any of the funds payable under the terms of the settlement are unclaimed at the end of the Claims Administration process, they will be paid out on a cy-pres basis, to a qualified charitable donee selected by the plaintiffs and approved by the court.

• Marchese will pay one half of the amounts set out above and Medbuy, on its own behalf and on behalf of the defendant hospitals, will pay the other half.

• Although the settlement is made without admissions of liability by any of the defendants, its terms compel Medbuy and Marchese to file statements with the court attesting to “internal reviews and improvements” they have undertaken as a result of the Dosing Incident. (Those statements were provided as part of the settlement approval motion record in the form of affidavits of representatives of Marchese and Medbuy respectively, which I will further address below.)

• The settlement agreement is subject to final approval of this court.

[29] On behalf of the representative plaintiffs, Class Counsel submit that: the settlement agreement is the product of extensive arms-length negotiations between experienced counsel; its terms are fair, reasonable and in the best interests of the class, as a whole; and Class Counsel recommend the settlement. Their recommendation arises from the available evidence; the law that applies to the claims of the Class Members; the likelihood of success or recovery; and the extensive burdens and expense of litigation, including the risks and uncertainty associated with protracted proceedings, trials and appeals. They are proud of the settlement and they submit that it is a fair, reasonable, cost effective and assured method of resolving the claims of eligible Class Members, in a manner that is consistent with the best interests of the class.

The Law Applicable to Approving Negotiated Settlements in Class Proceedings

[30] Pursuant to s. 29(2) of the CPA, in order for the settlement of a class proceeding to be binding on all parties, it must be approved by the court. In order to approve the settlement of a class proceeding, the court must be satisfied that in all of the circumstances, the settlement is fair, reasonable and in the best interests of the class. The parties seeking approval have the onus to demonstrate the proposed settlement meets the standard for approval: see Dabbs v. Sun Life Assurance Co. of Canada, [1998] O.J. No. 1598 (Gen. Div.), at paras. 9-10, aff’d (1998), 1998 CanLII 7165 (ON CA), 41 O.R. (3d) 97 (C.A.), at para. 99, leave to appeal refused, [1998] S.C.C.A. No. 372 (“Dabbs No. 1”); Lavier v. MyTravel Canada Holidays Inc., 2013 ONCA 92, 302 O.A.C. 194, at para. 9.

[31] In determining whether to approve or reject a proposed settlement, the court does not act as a mere “rubber stamp” of its terms. However, it is not the court’s function to substitute its judgment for that of the parties or to attempt to re-negotiate a proposed settlement: see Nunes v. Air Transat A.T. Inc., 2005 CanLII 21681 (ON SC), at para. 7. The court must approve or reject the settlement in its entirety. The court cannot “impose” different terms or re-draft the settlement to achieve a result it considers more desirable. While the court may identify areas of concern, which may act as a barrier to approval, it cannot mandate that the parties enter into “fresh negotiations” and produce a substantially different negotiated result.

[32] In determining whether to approve a settlement, the court, without making findings of fact on the merits of the litigation, must examine the settlement in the context of the record before it, including a review of the allegations underlying the claims, the defences advanced in response and any objections to the settlement, to determine whether the settlement is fair, reasonable and in the best interests of the class: see Baxter v. Canada (Attorney General), 2006 CanLII 41673 (ON SC), at para. 10.

[33] To be approved, a settlement does not have to achieve a “standard of perfection” but it must be “fair and reasonable”. The court encourages, and sound public policy favours, the resolution of complex litigation through compromise.

[34] There is a strong initial presumption of “fairness” when a proposed settlement that is negotiated at arm’s length by counsel for the class, is presented for court approval. The concept of “reasonableness” is an objective standard that allows for a range of possible resolutions. The reasonableness of any settlement depends on the factual matrix of the proceeding. A less than perfect settlement may be in the best interests of those affected by it, when it is compared to the alternative of the risks and costs of ongoing and uncertain litigation. Therefore, prior to approving a proposed settlement, the court must be satisfied that the parties seeking approval have demonstrated that its terms fall within the “zone or range of reasonableness”, in the circumstances of the particular case: see Parsons v. Canadian Red Cross Society (1999), 40 C.P.C. (4th) 151 (Ont. S.C.), at paras. 69-70 (“Parsons No. 1”); Dabbs v. Sun Life Assurance Co. of Canada (1998), 1998 CanLII 14855 (ON SC), 40 O.R. (3d) 429 (Gen. Div.), at pp. 339-340, aff’d (1998), 1998 CanLII 7165 (ON CA), 41 O.R. (3d) 97 (C.A.), leave to appeal refused, [1998] S.C.C.A. No. 372 (“Dabbs No. 2”); Nunes, at para. 7.

[35] The following factors are among those that a court may consider, together with any other relevant circumstances, when determining whether a settlement is “fair, reasonable and in the best interests of the class”:

• The likelihood of recovery or success;

• The amount and nature of discovery, evidence or investigation;

• The proposed settlement terms and conditions;

• The recommendation and experience of counsel;

• The future expense and likely duration of litigation;

• The recommendation of neutral parties, if any;

• The number of objectors and nature of objections;

• The presence of arm’s length bargaining and the absence of collusion;

• Information conveying to the court the dynamics of, and position taken by, parties during negotiations;

• The degree and nature of communications by counsel and the representative plaintiff with class members, during litigation.

See: Waldman v. Thomson Reuters Canada Limited, 2016 ONSC 2622, 131 O.R. (3d) 367 (Div. Ct.), at para. 22; Dabbs No. 1, at para. 13; Parsons No. 2, at paras. 71-72.

[36] The factors referred to above are not a “rigid set of criteria” that must be weighed equally in every instance. Instead, they serve as “guidelines” in evaluating the reasonableness of a proposed settlement. In the context of any particular case, it may be that some criteria are afforded more weight, some criteria are not satisfied, or there may be other relevant criteria: see Parsons No. 1, at para. 73.

[37] In the reasons that follow, I will apply the legal principles set out above, in the context of the terms of the proposed settlement and the balance of the relevant factors before me. In doing so, I will summarize certain portions of the evidence contained in the record on this motion. I will also refer to counsel’s submissions about the manner in which the available evidence informs: their recommendations; their views of the litigation risks faced by the plaintiffs; and the likelihood of recovery or success. I do so only for the purpose of examining the fairness and reasonableness of the proposed settlement and whether it is in the best interests of the class, as a whole, without making findings of fact on the merits of the litigation.

Reasons for Disposition

[38] In applying the principles set out above, I conclude that the relevant factors in this case strongly favour approving the settlement, as requested. As I will explain below, Class Counsel have identified “significant litigation risks” that confront the plaintiffs, arising from both the nature of the available evidence and the nature of the law that applies to their claims. In Class Counsel’s view, should the litigation continue, the plaintiffs’ likelihood of recovery is extremely low. As a result, they recommend the settlement, which was arrived at through a lengthy process of arm’s length bargaining.

[39] I am satisfied that the information and evidence available to Class Counsel was sufficient to permit them: to make an informed evaluation of the risks and likelihood of success of the litigation; to engage in informed settlement negotiations; and to provide informed recommendations about the settlement of the proceeding.

[40] Although formal discovery had not been conducted at the time the settlement was achieved, significant information about the Dosing Incident, and its impact on the treatment outcomes of the affected patients was available to, and considered by, Class Counsel including: the investigations, findings and opinions of Dr. Thiessen; over 20,000 pages of transcripts of the testimony given by several key players during the Standing Committee’s inquiry; publically available documentation produced during the inquiry; scientific literature; and the opinions of two exceptionally qualified experts, Dr. Michael Rieder (an expert in pharmacology) and Dr. Kathleen Pritchard (an expert in oncology).

[41] In addition, Class Counsel had the benefit of formal and informal consultations with other experts, the results of which are said to be consistent with Dr. Thiessen’s findings and the opinions of Drs. Rieder and Pritchard.

[42] I am also satisfied that Class Counsel has provided the court with sufficient evidence to permit an objective and independent assessment of the fairness of the settlement, in all of the circumstances.

[43] The terms of the settlement provide monetary benefits to the Class Members and non-monetary benefits designed to confirm and ensure that Medbuy and Marchese have modified their behaviour and practices, to avoid a future event similar to the Dosing Incident. The settlement provides for a very straightforward and expeditious method of distribution of the settlement proceeds to Class Members that does not require any action on their part. Any unclaimed settlement proceeds will be distributed, cy-pres, to a charitable organization. The settlement does not permit reversion of any of unclaimed settlement proceeds to the defendants.

[44] All of the representative plaintiffs support the settlement’s approval and express their belief that, based on the available evidence, the litigation will likely not succeed, if the action is tried. Both Class Counsel and the representative plaintiffs state that the proposed settlement delivers benefits to the Class Members that are otherwise not available to them. The representative plaintiffs believe the settlement is fair and in the best interests of the class and each of them has instructed Class Counsel to seek its approval.

[45] Notice of the settlement approval hearing was published in the National Post and Globe and Mail; posted on websites maintained by both Class Counsel and the notice/claims administrator; sent directly to Class Members for whom contact information was provided by the hospital defendants; and “e-mailed” to anyone who provided an e-mail address to Class Counsel. In total, more than 1,320 notices were e-mailed or mailed directly to Class Members.

[46] Since the publication of the notice of the settlement approval hearing, Class Counsel have communicated with over 460 Class Members, the majority of whom express appreciation and support for the proposed settlement.

[47] Originally, 49 objections to the settlement were filed, one objection has since been withdrawn. Although I will consider the objections, in detail, later in these reasons, I generally observe that each of the objectors holds an honest and sincere belief that the settlement is not fair, reasonable or in the best interests of the class. However, when they are considered together with all of the other relevant factors, which support approval, I do not find that the objections, either individually or cumulatively, provide an adequate basis for concluding that the settlement falls outside of the “zone of reasonableness”.

[48] Therefore, despite the objections, I am satisfied that, in weighing all of the circumstances and relevant considerations, the settlement falls within the operable zone of reasonableness and, accordingly, it will be approved.

[49] Below, I will explain the reasons for my finding and elaborate on the factors which are of most significance in determining this motion.

A. Risks Associated with Litigation and The Likelihood of Recovery/Success

[50] Class Counsel candidly submit that the plaintiffs face “very serious”, if not “insurmountable”, litigation risks in this proceeding. They say that success at trial is extremely doubtful and recovery, most unlikely. They submit that the available evidence and the applicable law will impair the plaintiffs’ ability to recover any damages, if the settlement is not approved. I will explain.

[51] In her affidavit, Ms. Lombardi opines that “without a doubt, to seek certification on a contested basis and then to move forward to a common issues trial and/or a summary judgment [motion], would take a great deal of time and would involve a great deal of risk”. She states that in arriving at that conclusion, Class Counsel have considered the procedural and litigation risks inherent in the action including:

a) the state of the common law respecting personal injury and negligence;

b) the risk that the court would not find in favour of the plaintiffs on one or more of the proposed common issues;

c) the risk that “individual issues” would be deemed to have materially contributed to the circumstances of individual Class Members;

d) the risk of success of the “learned intermediary” defence, based on the prescribing decisions made in the context of the individual patient’s unique “risk/benefit profile” and/or the failure of physicians to properly screen and monitor patients; and

e) even in the event that the plaintiffs were successful in all phases of the litigation, the plaintiffs were aware that the defendants could file appeals in respect of multiple issues, thus resulting in a considerable delay in compensation for Class Members.

[52] Ms. Lombardi also deposes:

Given the facts that emerged as a result of the [Standing Committee’s] inquiry, which have been confirmed by other experts, the reality is this litigation could not continue. Absent this Settlement Agreement, there is no other or better outcome for the Class Members in these circumstances.

[53] In his submissions, Mr. Peerless raised similar concerns. In his view, based on the available evidence, the Class Members face a “substantial litigation risk” arising, in part, from their inability to establish that they are entitled to compensatory damages, in law. Ominously, he submits that if the litigation continues, the proceeding is “doomed”. In part, that is because notwithstanding their formidable efforts to do so, Class Counsel have been unable to develop any expert pharmacological or oncological evidence that the diluted dosages of chemotherapy drugs that the Class Members received, had a provable clinical impact on the outcome of their respective treatment. He identifies the absence of such evidence as one of the factors that renders the plaintiffs’ likelihood of success, dubious.

[54] While I accept the validity of Mr. Peerless’ submission, the proposition that the administration of diluted chemotherapy medication, on multiple occasions, did not result in a provable clinical impact to the outcome of patients’ treatment seems, to a degree, to be counter-intuitive. After all, the Class Members were prescribed specific chemotherapy drugs at specific dosages by their treating oncologists. Presumably, those specific dosages were judged, by the prescribing physicians, to be “required for the optimal treatment” of the specific types and stages of cancer with which the individual Class Members presented.

[55] It is not difficult to understand how the patients affected by the Dosing Incident and others, can reason that if a dosage that was “7 to 10 percent less than the actual prescribed dosage” of a chemotherapy drug was sufficient for treatment purposes, then that lower dosage would have been prescribed, at first instance. Dilution of the chemotherapy drugs resulted in the patients receiving a smaller dosage than prescribed. Therefore, one can appreciate how the patients affected by the Dosing Incident and others, could intuitively arrive at a sincerely held subjective conclusion that the administration of diluted chemotherapy drugs, on a repeated basis, resulted in a negative impact on the outcome of their treatment, and how they may rhetorically question “How could the failure to receive the full dosage of medication, as prescribed, not result in a negative treatment outcome?” Many of the objections are premised, in part, on that type of intuitive reasoning.

[56] While such reasoning is understandable, it does not form the legal basis upon which the plaintiffs’ claims are to be determined, on the merits. Instead, in order to obtain an award of compensatory damages, the law compels the plaintiffs to prove, through evidence, that the Class Members suffered (or will suffer) a form of injury or loss that is compensable, in law, and caused by the failure of the defendants to act in accordance with a reasonable standard of care, in circumstances in which the defendants owed the plaintiffs a legal duty of care, to so act.

[57] As Class Counsel contend, there are very serious risks that the plaintiffs will not be able to discharge their burden of proof, in that regard, at trial, for at least two reasons. First, the absence of evidence establishing that the Dosing Incident resulted in a clinically provable impact on patient outcomes. Second, existing law does not favour recovery for compensatory damages for “psychological harm”, in the absence of proof of a “recognizable psychiatric illness”.

[58] I will address each of those concerns, in turn.

1. Absence of Evidence Establishing that the Dosing Incident Resulted in a Clinically Provable Impact on Patient Outcomes

[59] In their evidence and submissions on this motion, Class Counsel express their strongly held concern that as a result of the available evidence, the plaintiffs face a virtually insurmountable challenge in proving that the Dosing Incident clinically impacted the outcome of patients’ treatment.

[60] Mr. Peerless points to the findings set out in the Thiessen report (the relevant portions of which are reproduced above), as an illustration of the lack of scientific evidence causally associating the Dosing Incident with adverse consequences to patient outcomes. He indicates that although the content of the Thiessen report and the Standing Committee’s report impacted Class Counsel’s views on the likelihood of success of the action, their ongoing efforts to obtain expert evidence supporting the plaintiffs’ claims continued after the reports were released. In that regard, Mr. Peerless advises that he has personally consulted with a number of pharmacologists and oncologists across Canada, on both a formal and informal basis, without success.

[61] Further, Class Counsel have obtained reports on the medically expected result of the Dosing Incident on patient outcomes, from both Dr. Michael Rieder, an expert in pharmacology, and Dr. Kathleen Pritchard, an expert in oncology. In addition to their reports, both experts have provided affidavit evidence, which was filed on this motion. Dr. Rieder and Dr. Pritchard both present with lengthy and impressive credentials within their respective field of expertise. Their opinions exemplify the difficulty Class Counsel experienced in establishing an evidentiary record supporting the proposition that the Dosing Incident resulted in a provable clinical impact on patient outcomes. I shall address each opinion below.

(i) Dr. Rieder

[62] Together with his report and affidavit, I have had the benefit of reviewing Dr. Rieder’s 67-page Curriculum Vitae, which details his vast clinical and academic experience in the area of pharmacology. I will briefly describe his qualifications.

[63] Dr. Rieder holds a medical degree and a PhD in clinical pharmacology. He is a qualified clinical pharmacologist with an expertise focussed on “severe and life-threatening adverse drug reactions”. He is a professor in the Department of Pediatrics, Physiology, Pharmacology and Medicine at the University of Western Ontario and Professor and Chair of the Division of Pediatric Clinical Pharmacology at Children’s Hospital of Western Ontario. He is a member of the Division of Clinical Pharmacology and Toxicology at the University of Western Ontario. He is also a professor and chair of the Department of Pediatrics at the University of Western Ontario and Chief of Pediatrics at Children’s Hospital, London Health Sciences Centre.

[64] Dr. Rieder serves as a Scientist at the Robards Research Institute and as an “Associate Scientist” at the Child Health Research Institute. He was awarded the CIHR-GSK Chair in Pediatric Clinical Pharmacology at the University of Western Ontario, where he has also been named as a “Distinguished Professor”.

[65] In addition to his teaching and research responsibilities at the University of Western Ontario, Dr. Rieder is a consultant to Health Canada in the area of “adverse drug reactions”. He is the recipient of numerous awards recognizing both his work in clinical pharmacology and the content of his publications. He has authored four books, 32 book chapters and more than 230 peer-reviewed manuscripts, including a number of publications exploring the safety of chemotherapy.

[66] Class Counsel retained Dr. Rieder to provide an expert opinion with respect to the “clinical impact of dilution errors in the preparation of chemotherapy that were discovered in March of 2013 involving a cohort of 1,202 patients in New Brunswick and Ontario who were being treated with cyclophosphamide and gemcitabine”. In formulating his opinion, Dr. Rieder reviewed the Thiessen report, together with a number of relevant scientific publications in the areas of oncology and pharmacology.

[67] In his report, Dr. Rieder explains that “cyclophosphamide” is an “oxazaphosphorine alkylating agent”, commonly used in the treatment of cancer, which converts to the active form of the molecule (4-hydorxycyclophosphamide) once in the patient’s body. Gemcitabine is a pyrimidine antimetabolite nucleoside analogue. Both drugs are administered intravenously. Both drugs are supplied by their manufacturer as a dry powder that must be reconstituted, in saline, in order to be administered.

[68] In this case, the “dilution error” occurred when a bulk reconstituted solution was prepared using “pre-filled saline bags” rather than “empty bags”. An erroneous assumption was made that the volume of saline stated on the pre-filled bags was the precise volume actually in the bags, which was not the case. Saline filled bags are not entirely water impervious and, over time, a small amount of fluid transverses to the exterior of the bag and evaporates. Accordingly, to improve the “shelf-life” of the pre-filled bags, manufacturers routinely overfill the bags with a volume of saline that is greater than the stated volume on the bag’s label. “Overfill” is a widely known industry practice.

[69] In this instance, owing to a failure to account for saline overfill, when the bulk reconstituted solutions containing the chemotherapy agents were prepared, they were more “dilute” than labelled. As a result, the ultimate dosages that were administered to patients were 7 percent less than expected for gemcitabine, and 7 to 10 percent less than expected for cyclophosphamide.

[70] Dr. Rieder opines on the issue of “whether seven to ten percent under-dosing is likely to have a clinically relevant impact on the outcome of patients treated with the drugs in question” as follows:

“…it is my considered expert opinion that while the incident in question was preventable and without question caused distress and considerable anxiety among the patients impacted, it would not be associated with a clinically relevant impact on the outcome of cancer chemotherapy”. [Emphasis added.]

[71] In arriving at his opinion, Dr. Rieder considered that the majority of patients treated with the diluted dosages (and essentially all of the patients treated with cyclophosphamide) were treated with more than one chemotherapeutic agent. Therefore, he states that the under-dosing of one drug may have been, in part, compensated by the presence of other highly potent chemotherapy agents in the regimens administered to patients.

[72] In addition, Dr. Rieder indicates that current dosing regimens of chemotherapy agents are associated with considerable variability in “the amount of drug that is delivered to the target cancer”. He identifies a number of reasons for that variability, including: factors influencing the ultimate “tissue-specific distribution” of the drug, once administered intravenously (such as the drug’s own chemistry, protein binding within the patient’s body and drug transport systems within the body); variable factors associated with the action of the drug once it is distributed; and variable factors associated with clearance of the drug via the patient’s metabolism.

[73] After explaining the “considerable variability in the dosage of the drug, as administered, that is ultimately delivered to the target cancer”, Dr. Rieder opines that, “Given that the under-dosing was in the range of 7 to 10 percent this would be within the variability that is currently experienced in best practice cancer care with cyclophosphamide and gemcitabine.”

(ii) Dr. Pritchard

[74] Together with her report and affidavit, I have had the benefit of reviewing Dr. Pritchard’s 116-page Curriculum Vitae, which details her extensive clinical experience, academic and clinical investigation of, and research in, oncology related matters. I will provide a brief summary of her qualifications below.

[75] Dr. Pritchard is an academic medical oncologist specializing in the care of patients with breast cancer. She is currently a Member of the Active Medical Staff at Sunnybrook Hospital Centre and the Sunnybrook Odette Cancer Centre. She is a full Professor in the Department of Medicine at the University of Toronto. She has substantial training and practical experience in the fields of internal medicine and medical oncology.

[76] In the past, she practised as a general medical oncologist at the University of Toronto and served as the Head of the Breast Centre and Head of the Division of Medical Oncology and Hematology at Women’s College Hospital. She joined Sunnybrook Health Sciences Centre in 1987 as the Head of Medical Oncology and later Oncology and Hematology, where she was subsequently appointed as the Head of Clinical Trials. After serving as an Assistant and Associate Professor at the University of Toronto, she was appointed as a Full Professor in 1994.

[77] She has previously acted as Chair and Co-Chair of the Breast Cancer Site Group for the NCIC Clinical Trials Group. She remains active in that group as its Past Chair and as a Member of many ongoing Clinical Trial Committees. She is a Senior Scientist of the Sunnybrook Research Institute and Division of Clinical Epidemiology. She has chaired and co-chaired the Early Breast Cancer Trial Lists Collaborative Group, an international group that conducts “meta-analyses” of all trials of adjuvant breast cancer therapy. She also served as a member of the Board of Directors of the Canadian Breast Cancer Foundation – Ontario Division, of the American Society for Clinical Oncology and of the Canadian Breast Cancer Research Initiative.

[78] Since 1978 she has continuously held peer-reviewed grants as a principal and co-investigator. She has published more than 280 peer-reviewed papers. Since 2014, she has been recognized as “one of the one percent most cited researchers in Clinical Medicine, worldwide”. She has held a number of senior positions relating to “leadership and clinical trials in the care of breast cancer”. Most recently, she held positions as the Medical Oncology Department Divisional Director-Department of Medicine, University of Toronto and Medical Director of the Ontario Clinical Oncology Group (Ontario based clinical trials group).

[79] In arriving at her opinion with respect to “the likely impact on patient outcomes arising from receipt of diluted gemcitabine in the range of seven percent and cyclophosphamide in the range of ten percent”, Dr. Pritchard first explains that “in general, the way in which chemotherapy dosing is carried out is quite arbitrary”. Most dosing regimens are assigned on a “per metre squared body surface area” basis (height divided by weight squared), which is a “somewhat inaccurate calculation”. Additionally, “different chemotherapeutic drugs are distributed through different bodies in different ways”. The efficacy of various regimens is derived by averaging out those effects, overall, and, as a result “the exact dosing for regimens is a somewhat arbitrary process to begin with”.

[80] In her report, Dr. Pritchard indicates:

1. According to the Thiessen report, of the 1,162 adult patients affected by the dilutions, 1,007 were given cyclophosphamide (excluding the four patients who were prescribed both cyclophosphamide and gemcitabine).

2. According to the Thiessen report, 74% of the treatment plans for patients who received gemcitabine included other drugs (combination therapy) and “therefore the 7% reduction would be unlikely to be as serious as if gemcitabine was the only drug given”. Additionally, 96% of Cancer Care Ontario’s treatment plans that involve cyclophosphamide utilized that drug in combination with other chemotherapeutic drugs.

3. In her experience, virtually all patients being treated with gemcitabine are not being treated for “cure”. As a result, Dr. Pritchard states “it is hard for me to believe, then, that a reduction of 7% in doses of gemcitabine could affect their outcomes and I know of no data that would support such a concern”.

4. She believes that a significant percentage of the patients affected by the Dosing Incident and treated with cyclophosphamide, would have done so in the context of receiving adjuvant therapy of breast cancer. In the case of patients that presented with metastatic breast cancer, she opines “I doubt a 10% percent reduction in cyclophosphamide in any such patients would affect their ultimate outcome.”

5. At the point that cyclophosphamide is used in a regimen in adjuvant therapy of breast cancer, it is typically one of two or three drugs given in the first section of therapy, which is then followed by a high dose of a taxane. As a result, she opines “thus, it would seem that a 10% reduction in dose of cyclophosphamide would be unlikely to affect final outcomes”.

[81] Finally, she concludes:

It is difficult to comment on this whole issue more definitively without details of each of the patients, their diagnoses and the setting in which they were being treated but I could not stretch my imagination to a group of women with breast cancer where I would feel that one could clearly state that the reduction in dose by 10% of cyclophosphamide, or by 7% gemcitabine would affect their ultimate outcomes in any substantial way. Of course, were one to do a randomized controlled clinical trial of such a reduction in therapy the trial would have to be very large and to the best of my knowledge such trials have never been carried out.

There are likely also some patients in the cyclophosphamide treated group who would have received regimens such as CHOP (cyclophosphamide, doxorubicin, oncovin, and prednisone) rituxan for treatment of lymphoma. Some of these regimens would be palliative intent but for some intermediate grade lymphomas CHOP would be given with curative intent. However, I doubt that the reduction in cyclophosphamide only by 10% or less would have affected ultimate outcomes. Once again, I believe that trials that would compare such 10% reduction in one of 4 drugs to full dose therapy in these settings do not exist and that it would be very difficult to prove a definitive change in outcome based on this sort of reduction in dose.

[82] The opinions of Drs. Rieder and Pritchard are consistent with Ms. Lombardi’s evidence and Mr. Peerless’ submissions about Class Counsel’s difficulty in obtaining expert evidence supporting the position that patient outcomes were negatively influenced by their receipt of the diluted chemotherapy drugs. Other expert consultations are said to have yielded similar results. Further, Ms. Lombardi testifies that despite her efforts, she has not become aware of any scientific evidence indicating that the Dosing Incident impacted patient outcomes.

[83] Mr. Peerless observes that, apart from this action, the only other proceeding brought in relation to the Dosing Incident was commenced by the Estate of Bruce Davie. Mr. Davie received cyclophosphamide as part of his chemotherapy treatment at London Health Sciences Centre. Class Counsel advises, and the evidence establishes, that plaintiff’s counsel in the Davie action has confirmed that no evidence was developed, in the context of that action, indicating that the Dosing Incident affected the outcome of Mr. Davie’s treatment. Although Mr. Davie’s estate originally objected to the settlement of this proceeding, the objection was withdrawn before the approval motion.

[84] In the context of the foregoing, and without making findings on the merits, I am satisfied that Class Counsel hold a reasonable and well-founded concern about the litigation risks that arise from the lack of available evidence that the Dosing Incident resulted in a clinical impact on the outcomes of Class Members’ treatment.

2. The Law Respecting Recovery of Compensatory Damages for Psychological Harm

[85] Class Counsel posit that in the absence of evidence establishing that the Dosing Incident had a provable clinical impact on patient outcomes, the only potentially compensable injuries sustained by the Class Members are founded in the “psychological harm” they sustained as a result of receiving notification that they were affected by the Dosing Incident. In that regard, Class Counsel submit that there is a “very serious risk” that although the Class Members sustained psychological harm (in the form of distress and anxiety), on the available evidence, the type of psychological harm sustained by the “vast majority of the members of the class” is insufficient to meet the legal threshold to prove that they suffer from a “recognizable psychiatric illness”, which is necessary to recover damages for psychological harm. Counsel for the defendants echo that submission.

[86] Class Counsel refer to the result in Healey v. Lakeridge Health Corp., 2011 ONCA 55, 103 O.R. (3d) 402, to illustrate both the application of the “recognizable psychiatric illness” threshold in the context of a class proceeding, and the litigation risk that the threshold poses for the Class Members in this proceeding.

[87] Healey involved two class actions against the respondent Lakeridge Health Corporation and two physicians, arising from incidents in which a significant number of people were exposed to two Lakeridge patients afflicted with tuberculosis (TB). The plaintiffs in Healey did not allege that they contracted TB as a result of their exposure and, in fact, they all tested negative for the disease. Instead, they alleged that they suffered psychological harm in the form of “mental anxiety, suffering and distress” because they were notified by public health authorities that they had potentially been exposed to patients with TB. The plaintiffs admitted that the harm they suffered fell short of a “recognizable psychiatric illness”.

[88] The main issue on appeal, addressed whether the harm the plaintiffs suffered gave rise to a claim for legally compensable damages, in the context of a negligence action. In determining that it did not, the court held, at para. 64, that the evidence before it fell short of demonstrating that the plaintiffs “suffered harm of sufficient gravity and duration to qualify for compensation. The harm revealed by the evidence was not “serious trauma or illness” that amounted to more than “upset, disgust, anxiety, agitation or other mental states that fall short of injury” or that was “serious and prolonged and [rising] above the ordinary annoyances, anxieties and fears that people living in society routinely, if sometimes reluctantly, accept.”

[89] The standard for the recovery of damages for psychological harm referenced by the court in Healey is consistent with the standard articulated by the Supreme Court of Canada in Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, [2008] 2 S.C.R. 114.

[90] After observing that it was not foreclosing, “once and for all”, the possibility of a change in the formulation of the “recognizable psychiatric illness” threshold, the court in Healey held, at para. 65, “The law quite properly insists upon an objective threshold to screen such claims and to refuse compensation unless the injury is serious and prolonged.”

[91] Counsel also refer to this court’s decision in Farkas v. Sunnybrook & Women’s College Health Sciences Centre, 2009 CanLII 44271 (ON SC), where the uncertainty in the law concerning the recovery of damages for psychological harm was also considered in the context of a class proceeding.

[92] In that case, Sunnybrook discovered, through an internal audit of its infection control practices, that between December 1999 and August 2003, equipment used at its facility to perform trans-rectal ultrasound prostate biopsies, was not disinfected to the degree required. Sunnybrook opted to change its practices for future patients and gave notice to approximately 913 past patients that: the method used to clean the biopsy equipment may not have been adequate to eliminate the transmission of viruses such as hepatitis B and C and HIV; the risk of virus transmission was extremely low; no cases of infection had been reported; and they were being notified out of an abundance of caution. The patients were also offered expedited blood testing.

[93] A class action was commenced on behalf of the patients. With the possible exception of one individual, none of the class members were infected as a result of a biopsy procedure. Instead, class members’ claims were “based on the psychological distress associated with receiving the news that they might have been infected with a lethal virus and that they might have passed that virus on to their wives or partners”: see Farkas, at para. 19.

[94] Sunnybrook consented to certifying the action as a class proceeding, but not for the purpose of settlement. Instead, it defended the action on the basis that the representative plaintiff had not suffered a compensable loss because “in the absence of a diagnosed psychiatric injury”, anxiety, stress and worry are not compensable injuries, in tort.

[95] Ultimately the parties negotiated a settlement of the class proceeding on the basis of an all-inclusive payment of $1.2 million by the defendant, for which they sought court approval. In approving the proposed settlement, Perrell J. states, at paras. 48-49:

The affidavit material filed on the motion for settlement canvassed most of the factors that the court must consider in determining whether to approve or disapprove a settlement, and while I have considered all this material, to my mind among the more important factors are that the settlement agreement was reached by experienced counsel after vigorously contested proceedings in which both sides confronted reasonably strong cases and a difficult legal question about the scope of recovery for psychological harm from nervous shock and about the quantum of compensable damages, if any.

A motion for approval of a settlement is not the place to interpret or apply the law about the recovery for psychological harm and all that can or perhaps need be said is that the Supreme Court of Canada’s decision in Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, [2008] 2 S.C.R. 114 is grounds for debate about the law on compensation for psychological harm. This decision, which was released some years after the action was commenced, perhaps, presents more problems for the success of the class members’ case but both sides were confident in their cases and they have now reached a settlement without conceding the merits of their opponent’s position. [Emphasis added.]

[96] Counsel submit that the result in Healey, which was decided after Farkas, further solidifies the litigation risks associated with the Class Members’ claim for the recovery of compensatory damages for “psychological harm”, in this instance.

[97] I am mindful that the duration of the psychological harm potentially suffered by Class Members in this proceeding may be greater than the duration of the operable psychological harm in Healey or Farkas, where testing conclusively revealed no adverse physical consequences to the respective class members. As I will set out below, many of the objectors in this case indicate that they experience ongoing anxiety about the potential future impact of the Dosing Incident on their prognoses.

[98] Class Counsel submit that while that type of stress and anxiety is understandable, it remains that in the case of nearly every Class Member, there is no evidence that the Dosing Incident caused a “recognizable psychiatric illness”, and recovery is therefore, not attainable. In the context of this motion, the court’s role does not extend to determining that issue, on the merits.

[99] As Perrell J. observes, in Farkas, the court’s function on a motion to approve a settlement does not extend to the interpretation or application of the law concerning recovery for psychological harm, and I do not intend to do so. However, without making findings on the merits of the litigation, I am satisfied that Class Counsel’s concern about the litigation risk arising from the law relating to recovery of damages for psychological harm, is reasonable and well-founded, in the circumstances of this proceeding and the available evidence, as described by Class Counsel.

[100] Counsel for Marchese submits that the “issue of causation” constitutes an additional risk to the Class Members’ claim for damages for psychological harm, arising out of the Dosing Incident. Specifically, he submits that even if a particular Class Member was able to adduce evidence that she or he suffers from a “recognizable psychiatric illness”, the Class Member would still have to prove that that illness was specifically caused by the Dosing Incident itself, as opposed to other causes, including the understandable anxiety attributable to their diagnosis, in general, or anxiety associated with treatment. He submits that the anticipated difficulty that most, if not all, Class Members would face in establishing legal causation and the risk that individual trials, on the merits, would be required on the issue of causation, were identified, discussed and debated during settlement negotiations. Class Counsel did not take issue with his submissions in that regard.

[101] In addition, Class Counsel submit that in the event the settlement is not approved, there is a risk of decertification and a risk that the defendants will bring a motion for summary judgment to dismiss the proceeding, on its merits. They submit that even if the plaintiffs are successful in all phases of the litigation, appeals could be brought in relation to multiple issues, resulting in considerable delay and expense in reaching a final conclusion and the associated legal costs will be substantial. Given all of the operable risks, Class Counsel submit that the defendants’ payment of the amount mandated by the terms of the settlement is the most favourable outcome available to the Class Members.

[102] Counsel for the defendants candidly state that based on the risks that confront the plaintiffs, the settlement before the court represents the only terms with which the defendants are prepared to voluntarily agree, in order to resolve the litigation. The various defendants do not believe they are legally obligated to pay damages, but they remain willing to fund the settlement because of the extra-legal circumstances of the case, and as a matter of compromise. However, they say that if the settlement is not approved, a “better” offer will not be forthcoming.

[103] Overall, I am satisfied that the litigation and procedural risks facing the plaintiffs, as identified and explained by Class Counsel, and the anticipated future expense and likely duration of the litigation, if the settlement is not approved, all favour approval.

B. Recommendations and Experience of Class Counsel/Arm’s Length Bargaining/Position of the Representative Plaintiffs

[104] The recommendations of experienced class counsel can attract considerable weight in the court’s determination of whether a settlement falls within the zone of reasonableness, especially when the evidence indicates that settlement negotiations were conducted in good faith and at arm’s length, without any suspicion of collusion or a basis for class counsel seeking to advance their own interests at the expense of the interests of the class: see Stewart v. General Motors of Canada Ltd., 2008 CanLII 57167 (ON SC), at para. 24.

[105] On the materials before me, I am satisfied the evidence establishes that the settlement was negotiated in good faith, at arm’s length and by experienced counsel on both sides. Settlement discussions took place over a number of months through a combination of in-person meetings, conference calls and exchanges of electronic correspondence. The various defendant groups were represented by independent and experienced counsel, throughout the negotiations. Counsel engaged in detailed debate and negotiation over various aspects of the available evidence, the applicable law, and its corresponding impact on the plaintiffs’ likelihood of success. Based on the evidence and submissions before me, I am satisfied that Class Counsel arrived at their recommendation after considering all of the relevant and relative litigation risks faced by the Class Members, and those faced by the defendants.

[106] Some of the objectors question Class Counsel’s motivation and the extent of their efforts to develop further evidence to support the plaintiffs’ claims. I will address those concerns later in these reasons. However, in all of the circumstances, I do not harbour any apprehension that the proposed settlement results from an attempt by Class Counsel to place their own interests before the interests of the Class Members. Instead, I accept Ms. Lombardi’s evidence and Mr. Peerless' submission that the actions undertaken by Class Counsel throughout this proceeding, including their negotiation and recommendation of the proposed settlement accord with their professional judgment, with respect to the best interests of the class, as a whole.

[107] Class Counsel recommend and strongly endorse the proposed settlement as a compromise that clearly falls within the zone of reasonableness, based on the evidence developed and the information gathered with respect to the Dosing Incident and its impact on the members of the class, in the context of the applicable law.

[108] I have no hesitation accepting Ms. Lombardi’s evidence that the lead members of the Class Counsel team, Messrs. Strosberg and Peerless, are considered to be among the most experienced class action lawyers in Canada. They have both appeared as lead counsel in many of the decided authorities referenced by the parties on this motion. Clearly, they each have considerable experience in pharmaceutical class actions.

[109] In the circumstances, I am satisfied that the recommendations of Class Counsel should be afforded significant weight in assessing whether the settlement should be approved, and a strong initial presumption of fairness attaches to the settlement because it was negotiated by experienced class counsel in good faith and at arm’s length. All of the representative plaintiffs support approval of the settlement. All of these factors favour approval.

C. Opt-Outs and Objections

[110] The presence of, and input from, objectors is a relevant factor in evaluating whether the settlement is fair, reasonable and in the best interests of the class, as a whole. Objectors have the ability to bring to the court’s attention potentially relevant considerations and perspectives, distinct from those raised by the parties and counsel who seek approval of the proposed settlement terms.

[111] Class Members and Family Class Members had the opportunity to review the terms of the proposed settlement, and decide whether to opt-out before the settlement approval hearing. A total of seven Class Members opted-out before the deadline, one of whom has since opted back in, for the express purpose of receiving the monetary benefit provided by the settlement.

[112] Ms. Lombardi’s affidavit evidences that after the “notice of settlement approval hearing” was published, she, along with other Class Counsel, communicated with over 460 Class Members, the majority of whom are said to have expressed their appreciation for, and support of, the proposed settlement.

[113] Forty-nine written objections to the proposed settlement were received and one objection was subsequently withdrawn. The majority of objections were submitted by Class Members.

[114] I have had the benefit of reviewing the written objections and the benefit of listening to sincere, poignant and compelling oral submissions from several of the objectors, during the course of this motion. With the consent of all parties, I also received and reviewed additional written submissions from a very limited number of objectors, after the hearing was concluded.

[115] Both Class Counsel and counsel for the defendants understandably express great sympathy for the circumstances of the objectors. I concur in that expression, however, my sentiments do not end there. The level of commitment, thought, attention and heartfelt candour expressed throughout the content of the written objections is commendable, as is the courage, poise and eloquence exhibited by the objectors during the course of their oral submissions. Anyone who was present in the courtroom while the objectors spoke, was undoubtedly moved by what they heard.

[116] This court has the greatest respect for, and appreciation of, the concerns and submissions of the objectors and the efforts they have made to place them before the court. Their collective voice personalizes the events at issue in this proceeding far more than the sterilized context of an affidavit ever could. This action is not simply about “clinical issues” such as “overfill rates in the preparation of saline bags” or “medication dilution percentages”. At its core, this action is about people – cancer patients and their families; some of whom feel betrayed by the medical system they relied on; some of whom experience anxiety over their future outcome; and some of whom sincerely believe that their own condition has worsened or that they have lost a loved one, either sooner than they otherwise would have, or at all, because of the Dosing Incident.

[117] The objections to the settlement, which are all made by, or on behalf of, individuals who were directly affected by the Dosing Incident, command significant attention and careful deliberation.

[118] In considering the objections, it is also helpful to recall that the issue on this motion remains, whether the settlement is fair, reasonable and in the best interests of the class as a whole, and not necessarily any one particular member of the class.

[119] I will now address the content of the objections.

[120] The defendant Marchese submits that the objectors can be broadly organized into three categories:

(i) Those who claim their psychological injuries exceed the $1,500 settlement payment allocated for each Class Member;

(ii) Those who dispute that the Dosing Incident had no clinical impact on the individual’s chemotherapy treatment; and

(iii) Those who assert that the $1,500 settlement payment allocated for each Class Member is inadequate, generally, in compensating the Class Members.

[121] From Class Counsel’s perspective, after discussions with many of the objectors, they posit that the objections can be described in accordance with one or more of the following:

a) Objections with respect to the quantum of each Class Member’s recovery pursuant to the settlement;

b) Objections seeking compensation for matters beyond the scope of the litigation and, more generally, arising from a misunderstanding of the nature of the litigation and the limits of the law, generally;

c) Objections premised on a distrust of the scientific evidence relating to the impact (or lack thereof) of the Dosing Incident on patient outcomes;

d) Objections premised on a distrust of the independence of members of the Standing Committee on Social Policy and the results of the inquiry; and

e) Objections that misjudge the role and motives of Class Counsel.

[122] In considering the objections, I will organize the objector’s submissions into three categories: i) Quantum, Evidence and Risk; ii) No Admissions of Liability; and (iii) Fees and Motives of Class Counsel.

(i) Quantum, Evidence and Risk

[123] In my view, the characterizations of the nature of the objections that are offered by counsel, fail to include a ground that implicitly or expressly forms part of most of the objectors’ submissions. Namely, the objectors express a sincerely held belief that the terms of the proposed settlement do not correspond with a “just result”, and a corresponding concern that approval of the settlement will permanently foreclose their ability to secure access to justice with respect to the Dosing Incident, and the injuries and losses it has caused. Because of that, some objectors take issue with the amount of the proposed distribution ($1,500) to each Class Member, pursuant to the settlement. Some feel it is simply inadequate to compensate them for the harm done to them and their families. Others find the quantum to be highly offensive.

[124] Many of the objectors’ expressed views about the inadequacy of the compensation provided by the settlement, are founded in a subjective belief that the Dosing Incident directly caused a negative clinical treatment outcome that has already occurred, and/or a belief the incident has increased the risk that a negative outcome will manifest itself in the future. Those beliefs must be considered together with the materials before the court that inform Class Counsel’s position about the “serious litigation risks” faced by the class.

[125] As Mr. Peerless correctly indicates, when negotiating the terms of the settlement, Class Counsel were guided and confined by both the available evidence, including Dr. Thiessen’s conclusion that the possibility of the Dosing Incident resulting in a clinical impact on the outcome of Class Members’ treatment is “most unlikely”, and the applicable law.

[126] Of course, many of the objectors indicate that they do not accept Dr. Thiessen’s opinion, in that regard. Some objectors posit that Dr. Thiessen exceeded his mandate by opining on that issue. Some objectors observe that Dr. Thiessen is not an oncologist. Some objectors correctly observe that in his report Dr. Thiessen indicates that he requested an opinion from an out-of-province oncologist on the “Dosing Incident impact” on patient outcomes. They state that the report, if it has been received, has not been made public. That report does not form part of the record before me.

[127] I understand the frustration and suspicion that some of the objectors express because they have not had the opportunity to review that report. However, as I have previously concluded, I remain satisfied that Class Counsel had adequate evidence and information available to them, which allowed them to make an informed assessment of the risks of litigation and to arrive at an informed recommendation regarding settlement.

[128] In responding to the objectors’ concerns about Dr. Thiessen’s opinion, Mr. Peerless also reiterates that Dr. Rieder and Dr. Pritchard have also concluded that the possibility of a clinical impact on Class Members’ treatment is “most unlikely”, and Class Counsel’s consultations with other oncologists and pharmacologists have yielded similar information. While the specific information conveyed to Class Counsel during those consultations is not detailed in the materials, I also appreciate that there are constraints on the extent to which parties can be expected to make full disclosure of the strengths and weaknesses of their case, in situations where the litigation may continue if the settlement is not approved: see Dabbs No. 1, at para. 16.

[129] Finally, Mr. Peerless correctly observes that there is no evidence before the court that contradicts, or is otherwise inconsistent with, the opinions expressed by Drs. Rieder and Pritchard. Class Counsel advise that they are not aware of any evidence establishing the Dosing Incident resulted in a provable clinical impact on patient outcomes. In fact, some of the objectors disclose that they have been reassured by their own oncologists that the Dosing Incident is not likely to result in a negative outcome.

[130] Some of the objectors assert that Class Counsel have not engaged in adequate efforts to develop expert evidence confirming that the Dosing Incident has or will negatively impact patient outcomes. I do not share that view.

[131] I am unable to conclude that Class Counsel acted unreasonably, or in a manner that was inconsistent with the best interests of the Class Members, as a whole, at any time in the proceeding. Class Counsel have explained the serious litigation risks and challenges that confront the Class Members, which are supported by the record before me. I accept those risks exist despite Class Counsel’s exhaustive efforts to develop supportive evidence, which would otherwise serve to advance the Class Members’ claims.

[132] Some objectors submit that the results of the Standing Committee’s findings should be disregarded owing to an operable conflict of interest and bias, which results from the inquiry being conducted by the “provincial government”, an entity they feel should have been named as a defendant in this proceeding. While I do not doubt the sincerity with which such beliefs are held, there is nothing before me that establishes that the conduct of the inquiry was tainted in any respect, and I am unable to infer that it was.

[133] As a result of the foregoing, I am persuaded that the following objections do not constitute grounds to reject the settlement, when considered with the other factors relevant to approval: (a) distrust of, or disagreement with, the scientific and expert evidence about the clinical impact of the Dosing Incident; (b) distrust of, or disagreement with, the content of Dr. Thiessen’s report; and/or (c) the suggestion that the lack of available supportive evidence to the Class Members’ position results from an inadequate effort by Class Counsel to develop it.

[134] A majority of the objectors state that a payment of $1,500 is grossly inadequate as compensation for the stress, anxiety and fear experienced by the Class Members and members of their families, because of the Dosing Incident.

[135] As I previously observed, Class Counsel has correctly stated the law as it relates to recovery for compensatory damages on account of “psychological harm” and the requirement to demonstrate a “recognizable psychiatric illness”. Although the stress, anxiety and fear that many of the objectors describe and attribute to the Dosing Incident is understandable, only an extremely limited number of objectors assert that they suffer from a diagnosed psychiatric illness, as a result of the Dosing Incident, itself.

[136] In determining whether to approve the settlement, the focus is whether it is fair, reasonable and in the best interests of the class as a whole and not any particular individual Class Member. According to Class Counsel, it remains that in the case of nearly every Class Member, there is no evidence that the psychological harm they experience, as a result of the Dosing Incident, rises to the level of a “recognizable psychiatric illness”. All counsel agree that in such circumstances, those Class Members would not be entitled to compensation for psychological harm. Therefore, they suggest a payment of $1,500 to each Class Member affords a greater level of recovery than would likely be obtained at trial.

[137] The preferable course of action for those who assert they have suffered a “recognizable psychiatric illness” as a result of the Dosing Incident (and therefore, their circumstances differ from those of the balance of the Class Members) may have been to opt-out. Although I am mindful of some of the objectors’ submissions indicating that they do not have the means to fund an individual action, the focus remains on the interests of the Class Members as a whole, when determining approval.

[138] A small number of objectors accept the current state of the law does not favour recovery for psychological harm that falls short of a “recognizable psychiatric illness” but they suggest that through this proceeding, Class Counsel ought to attempt to change the law, in that regard.

[139] While it is true that the common law can and does evolve over the course of time, in my view, it cannot be said that the implementation of a legal strategy premised on changing the law through the circumstances of this proceeding, would decidedly be in the best interests of all of the Class Members.

[140] If successful, that approach might result in the Class Members recovering an amount that is greater than the settlement provides. However, litigation designed to change the basis upon which compensatory recovery may be achieved for psychological harm, would carry with it exceptional risk, and would invariably add extraordinary length and delay to the resolution of the proceeding at both the trial level and, presumptively, the appellate level.

[141] Finally, some of the objectors view the terms of the settlement as equating the value of their life (or the life of a family member) to $1,500. That is not the case. Indisputably, the value of “the life” of each Class Member is immeasurable. The terms of the settlement do not suggest otherwise, and they do not reflect an attempt to value “the worth” of any class member.

[142] Rather, the settlement is the negotiated result of arm’s length bargaining carried out in the context of the available scientific, expert and other evidence concerning the Dosing Incident, and its clinical effects on patient outcomes, the state of the applicable law and the relative litigation risks faced by all parties. It is the product of compromise.

(ii) No Admissions of Liability

[143] Some objectors have raised concerns that the relevant hospitals are not named defendants. However, the hospitals were added as defendants when the statement of claim was amended in October 2016. They will be bound by the terms of the settlement, if approved.

[144] Many of the objectors are dissatisfied with the terms of the settlement because they do not require or contain an admission of legal liability by any of the defendants. Related to that, some objectors contend that the defendants are “guilty of negligence” and as a result they “want them to pay the maximum penalty”. Others are concerned that the terms of the proposed settlement do not adequately “punish” the defendants.

[145] Those aspects of the objections are tempered by Class Counsel’s observation that the available evidence suggests that none of the defendants engaged in any intentional wrongdoing. Therefore, to the extent available in law, the role of damages in this proceeding is compensatory, and not as a tool to “punish” the alleged wrongdoers. Additionally, there is no indication that the defendants’ conduct is likely to result in an award of punitive damages, if the matter proceeds to trial.

[146] The objections to the settlement founded in the lack of an admission of liability on the part of the defendants are also contrasted by Class Counsel’s observation that compromise is necessary, in order to settle litigation.

[147] In this instance, the defendants strongly assert that they are not liable, in law, because the scientific evidence supports their conduct and it establishes the absence of “medical causation of a clinical impact on patient outcomes.” In Class Counsel’s view, it was in the best interests of the class to reach a practical resolution of the litigation, rather than to pursue an admission that the defendants were (and remain) unwilling to provide, voluntarily.

[148] The absence of an admission of liability on the part of a settling defendant is a typical component of any settlement, whether in the context of class proceedings or otherwise.

[149] Further, as various counsel for the defendants observe, although the defendants have not extended a formal admission of legal liability, the terms of the settlement and the actions that Marchese and Medbuy have undertaken since the Dosing Incident, evidence their “acceptance of responsibility” to ensure that a similar event does not occur in the future.

[150] The settlement compels Medbuy (on its own behalf and on behalf of the hospitals) and Marchese to fund, in equal proportions, the $2,375,000 settlement amount, without the possibility of reversion, in circumstances where the plaintiffs’ likelihood of recovery is relatively low. Further, it compels Medbuy and Marchese to file statements with the court attesting to internal reviews and improvements undertaken as a result of the Dosing Incident, which they have done. I will address those statements, below.

[151] Michael Blanchard, is Medbuy’s Vice-President of Pharmacy Services. In an affidavit filed on this motion, he acknowledges, among other things, the recommendations set out in the Thiessen report that are specific to Medbuy, as a GPO. He states that subsequent to the Dosing Incident, Medbuy withdrew from directly contracting for “admixing services”. It assigned its admixing agreement to members of the GPO, in an effort to create a “direct interface” between service providers and the members of Medbuy who chose to contract for admixing services, which, in turn, facilitates the flow of relevant information between them.

[152] Mr. Blanchard states that in response to the Dosing Incident, Medbuy has also taken several steps to improve “the rigour of its contracting process” to ensure that an event similar to the Dosing Incident is not repeated, including:

1. holding a series of “risk education sessions” designed to ensure that its staff and representative pharmacy members are informed and aware of the nature of the “risk assessments” currently required in “contracting processes” specific to clinical settings;

2. conducting a workshop with hospital representatives and the Institute for Safe Medication Practices, to develop recommendations for “risk identification” and “mitigation controls”, with an emphasis on patient safety, which can be integrated into Medbuy’s contracting processes;

3. conducting a workshop for all Medbuy members, including the hospitals, to review recognized standards for quality control surveillance strategy, testing procedures, risk containment and product and facility monitoring (as set out in the United States Pharmacopeia Chapter 797 (“USP<797>”), thereby ensuring that in-house pharmacists and technicians of the GPO’s members are aware of “the current universal standards for sterile admixing services”;

4. developing a risk-rating tool (or risk code) applicable to contracts related to “products and services meant for patient treatment”, to ensure that patient risk criteria are incorporated into the evaluation and selection of vendors;

5. subsequent to the Dosing Incident and prior to Medbuy’s assignment of its admixing agreement, Medbuy ensured that Marchese’s pharmacists and the Medbuy member pharmacists responsible for the preparation of sterile admixed drugs met, directly, to review and approve the specifications for products supplied by Marchese;

6. Medbuy introduced a pharmacy-specific “change management process” designed to ensure that Medbuy’s members are informed about all “vendor transitions” (i.e. when a contract, previously held by one vendor, is subsequently awarded to another) and any significant changes in the products or services, supplied. The procedure is said to ensure that the standard operating procedures and/or products of the new vendor are validated by the “Medbuy-member end-user”, prior to the actual supply of the subject product or service.

[153] Finally, Mr. Blanchard indicates that Dr. Thiessen’s recommendation to publish contract details regarding admixing services is not applicable to its current operation, because it does not currently contract for such services. However, if it does so in the future, Medbuy will publish the requisite vendor and product information, as recommended.

[154] Marita Zaffrio is the president of Mezentco Solutions (carrying on business as Marchese Hospital Solutions) and Mezentco Inc. (carrying on business as Marchese Health Care). In an affidavit filed on this motion, she references Dr. Thiessen’s specific recommendation concerning Marchese, which follow:

Recommendation number 5

Marchese Hospital Solutions (MHS) shall review and revise its product preparation processes to ensure that all its products meet the specifications required by professionals in treating patients effectively and safely.

MHS shall contact the end-users (e.g., oncology pharmacists) that employ its service products in treating patients; the product specifications shall be revised as needed to satisfy the requirements.

The product preparation process shall be modified, where needed, to meet the existing specifications.

Importantly, the changes shall eliminate any confusion or misunderstanding regarding products/services designed to deliver an entire prepared dose, a fraction of the product and/or a concentration; the use of automated delivery systems (based on a dose, concentration, volume) shall be accommodated with the changes.

[155] Ms. Zaffrio deposes that MHS had already implemented or observed the essence of most of the Thiessen recommendations on its own initiative, even before the report was released. After its release, Marchese implemented the balance of Dr. Thiessen’s recommendations. She also states that the events giving rise to the Dosing Incident were “unique” and that MHS did not experience any other problems with labelling, or otherwise, before or after the Dosing Incident. Finally, she observes that in 2015, MHS sold its Mississauga “admixtures supply business” to an unrelated corporate entity.

[156] I accept that the terms of the settlement provide for important non-monetary benefits by ensuring that the relevant parties have engaged in behaviour modification designed to prevent another event similar to the Dosing Incident.

[157] Further, the salutary effects of the modified behaviour undertaken in this instance, extend beyond changes to “procedures related to the admixing of chemotherapy medications” and “the contracting of such services”.

[158] The initiatives undertaken by the relevant defendants are designed: to facilitate much more direct communication between end-user members of the Medbuy GPO and their suppliers of products and services meant for patient treatment; to improve identification, rating and mitigation of risks to patient safety; and continuing education and communication about such risks between end-users and other entities in the supply chain, for all manner of products and services.

[159] Consistent with one of the objectives of the CPA, such measures provide a substantial degree of social utility, which must also be considered in the context of the objector’s concerns about the absence of liability admissions, as part of the settlement.

(iii) Fees and Motives of Class Counsel

[160] Some of the objectors take issue with the fees and/or disbursements sought by Class Counsel, which I will address, in determining the motion for fee approval. Some suggest that Class Counsel did not pursue or develop the claim vigorously because they were motivated to “turn a quick profit for themselves”. That suggestion is contrasted by Mr. Peerless’ accurate observation that Class Counsel have entered into contingency fee arrangements with all of the representative plaintiffs and, therefore, the quantum of Class Counsel’s compensation is a direct function of the amount of any settlement or award in favour of the plaintiffs. The greater the amount of recovery for the Class Members, the greater the amount of the fees payable to counsel. It follows that if evidence was available to support a claim for significant financial recovery on behalf of the class, it would be financially beneficial for Class Counsel to develop that evidence, and pursue a settlement on that basis.

[161] I will add this. While I accept that some of the objectors hold a sincere belief that Class Counsel are primarily motivated by their own financial interests, to recommend the settlement, I do not share that view. I accept Mr. Peerless’ submission that Class Counsel’s primary motivation has always been to secure the best result possible for the Class Members, based on the available evidence and the applicable law. There is nothing in the record before me, including the content of the objections, that serves to convincingly contradict that submission.

Conclusion on Objections

[162] In considering the substance of the various objections, it is helpful to recall that the court does not have the jurisdiction to amend the existing terms of the settlement, to add additional terms to the settlement, to compel the parties to resume negotiating to produce a new settlement, or to compel Class Counsel to engage in specified courses of conduct, as some of the objectors request. Rather, the objections must be considered together with all of the other relevant considerations, to determine if the settlement is fair, reasonable and in the best interests of all Class Members.

[163] In my view, a finding that the settlement falls outside the zone of reasonableness, on the basis of the objections, or otherwise, would not be in the best interests of the class, as a whole, as distinct from any particular individual objector.

[164] Again, for those objectors who differentiate their circumstances from the balance of the Class Members, and perhaps for those objectors who express a lack of confidence in Class Counsel or their recommendations, the more preferable course may have been to opt-out, so as not to be bound by the settlement, if approved.

Conclusion on Settlement Approval

[165] I am satisfied that, through their factum and submissions, together with the evidence on this motion, Class Counsel have adequately explained why the terms of the proposed settlement “fall within the zone of reasonableness”, in all the circumstances of the proceeding including: the nature of the claim; the nature of the defences; the litigation risks posed by the lack of available evidence to support that the Dosing Incident clinically impacted patient outcomes, together with the evidence that suggests that it did not; the litigation risks posed by the law applicable to the recovery of compensable damages for psychological harm; the likelihood of success or recovery; the recommendations of experienced Class Counsel; the arm’s length nature of the bargaining; the anticipated time and expense associated with further litigation, in the event that the settlement is not approved; and the nature and content of the objections. The proposed structure of the claims administration process is straightforward and efficient. Finally, the settlement ensures socially responsible behaviour modification by key defendants aimed at preventing similar incidents from occurring.

[166] For the foregoing reasons, I am therefore satisfied that the terms of the settlement are fair, reasonable and in the best interests of the Class Members, as a whole, and the settlement is, hereby approved.

[167] In reaching that conclusion, I remain mindful that 40 of the patients affected by the Dosing Incident were minors, at the time of their treatment. However, the Office of the Children’s Lawyer received all of the material filed on the settlement approval motion and it does not oppose the relief requested, including approval and I am otherwise satisfied by the materials and submissions before me, that settlement of the minor Class Members’ claims ought to be approved, for the same reasons set out above.

Fee Approval

[168] Class Counsel seek approval of the contingency fee retainer agreements they have entered into with the representative plaintiffs and they seek approval of Class Counsel’s legal fees, disbursements and applicable taxes, in the all-inclusive amount of $400,000, as contemplated by the terms of the settlement.

[169] The fairness and reasonableness of the fee awarded in respect of a class proceeding must be determined in light of the risk undertaken by counsel in conducting the litigation and the degree of success in the result achieved: see Serwaczek v. Medical Engineering Corp. (1996), 3 C.P.C. (4th) 386 (Ont. Gen. Div.); Parsons v. Canadian Red Cross Society, 2000 CanLII 22386 (ON SC), at para. 62.

[170] The factors that are relevant in assessing the reasonableness of Class Counsel’s fee include: the time expended by the solicitor; the legal complexity of the matters to be dealt with; the degree of responsibility assumed by the solicitor; the monetary value of the matters in issue; the importance of the matter to the client; the degree of skill and competence demonstrated by the solicitor; the results achieved and the contribution of counsel to the result; the ability of the client to pay; and the client’s expectation as to the amount of the fee: see Serwaczek, at para. 17.

[171] The representative plaintiffs have signed contingency fee agreements with Class Counsel and they all support the fees requested by Class Counsel on this motion. Further, the representative plaintiffs have all sworn affidavits in which they depose that “class counsel took on a significant financial risk and should be rewarded appropriately for their diligence and efforts” and they all reference “class counsel’s valuable work and commitment to pursuing the action and the settlement achieved for the Class”.

[172] The terms of the contingency fee agreements provide that fees and disbursements with respect to the common issues, would only be payable in the event of a successful judgment on the common issues, in favour of some or all of the Class Members, or a settlement that benefits one or more of the Class Members. Pursuant to the retainer agreements, Class Counsel are entitled to seek fees in an amount that is equivalent to 25 percent of the value of the settlement, plus reimbursement for the disbursements they expended in furtherance of the proceeding, together with applicable HST.

[173] The contingency fee agreements contain all the information required by s. 32(1) of the CPA, and are, therefore, approved.

[174] Significant time and money has been expended by Class Counsel in pursuing the litigation. McKenzie Lake has incurred a total of $322,833.47, including the fee value of time expended, disbursements and applicable taxes. Sutts Strosberg LLP has incurred a total of $199,361.44 including the fee value of time expended, disbursements and applicable taxes. Therefore, the total fee value of time and the disbursements, inclusive of taxes, expended by Class Counsel with respect to this proceeding is $522,194.91.

[175] Pursuant to the contingency fee agreements, Class Counsel are entitled to seek approval for fees totalling $593,750 (which is calculated as 25 percent of the value of the settlement) plus disbursements and applicable taxes. Instead, Class Counsel request approval of legal fees, inclusive of disbursements and taxes, in the amount of $400,000.

[176] In all the circumstances, I conclude that the fees requested by Class Counsel are fair and reasonable. The factual and legal issues in this proceeding shade above moderate in their complexity. Counsel expended considerable time reviewing voluminous documentary evidence and information including over 20,000 pages of testimony from the Standing Committee’s inquiry. Counsel consulted with numerous experts in oncology and pharmacology, in ongoing attempts to develop the necessary expert evidence to increase the likelihood of success for the class. When that evidence was not forthcoming, counsel turned to negotiating a settlement that provides a fair and efficient method for distributing compensation to the class. I have no hesitation in concluding that the professional services provided by Class Counsel were both competent and necessary, to ensure some degree of success in the proceeding.

[177] Class Counsel ultimately achieved a result that included a total payment by the defendants of $2,375,000, together with assurances that Marchese and Medbuy have, and will continue to, engage in the behaviour modification contemplated by the Thiessen report. The uncertainty in the law with respect to recovery of compensatory damages for psychological harm and the various defences raised by the defendants resulted in a very real and formidable risk that Class Counsel would not receive any compensation, under the terms of their retainers.

[178] The ultimate fee sought is substantially lower than the value of the time that Class Counsel expended in furtherance of the proceeding. It is substantially lower than what counsel is otherwise entitled to receive pursuant to the contingency fee agreements, which were fully understood and accepted by the representative plaintiffs at the time they were executed. The representative plaintiffs support Class Counsel’s fee request.

[179] Some of the objectors take issue with the amount of fees sought by Class Counsel. Those objections are, in my view, founded in a misapprehension of the effort and skill exhibited by Class Counsel in the course of the proceeding. Further, one cannot discount the financial risks assumed by Class Counsel in such proceedings and the reality that the goals of the CPA and access to justice and behaviour modification, in particular, “can only be achieved if incentives are provided for counsel to assume the risks and accept the financial burden of carrying litigation that, unfortunately, is very often protracted”: see Kranjec v. Ontario (2006), 33 C.P.C. (6th) 290 (Ont. S.C.), at para. 24. In my view, the objections do not present a sufficient justification for refusing to approve what I determine to be an extremely reasonable fee request, in all of the circumstances.

[180] For the reasons stated above, I find that the fee amount of $400,000 (inclusive of disbursements and applicable taxes) is reasonable and it is hereby approved.

Disposition

[181] As a result of the foregoing, judgment will go approving the settlement and Class Counsel’s fees, together with all necessary ancillary orders, in accordance with the draft judgment, as submitted and signed.

Original signed by Justice Gregory J. Verbeem

Gregory J. Verbeem

Justice

Released: April 7, 2017