COURT FILE NO.: 12-CV-453236CP DATE: 2018/10/31 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

THE TRUSTEES OF THE DRYWALL ACOUSTIC LATHING AND INSULATION LOCAL 675 PENSION FUND and 0793094 B.C. LTD. Plaintiffs – and – SNC-LAVALIN GROUP INC., IAN A. BOURNE, DAVID GOLDMAN, PATRICIA A. HAMMICK, PIERRE H. LESSARD, EDYTHE A. MARCOUX, LORNA R. MARSDEN, CLAUDE MONGEAU, GWYN MORGAN, MICHAEL D. PARKER, HUGH D. SEGAL, LAWRENCE N. STEVENSON, GILLES LARAMÉE, MICHAEL NOVAK, PIERRE DUHAIME, RIADH BEN AÏSSA and STÉPHANE ROY Defendants

Counsel: Michael Robb, Joel Rochon, Douglas M. Worndl, Ronald Podolny, and Peter R. Jervis for the Plaintiffs Linda Fuerst, Daniel Urquhart for the Defendants, SNC-Lavalin Group Inc., Ian A. Bourne, David Goldman, Patricia A. Hammick, Pierre H. Lessard, Edythe A. Marcoux, Lorna R. Marsden, Claude Mongeau, Gwyn Morgan, Michael D. Parker, Hugh D. Segal and Lawrence N. Stevenson Paul D. Guy for the Defendant, Riadh Ben Aïssa Steven I. Sofer and Scott Kugler for the Defendant, Pierre Duhaime Patricia D.S. Jackson for the Defendant Michael Novak Laura C. Young for the Defendant, Stéphane Roy Paul Fruitman for the Defendant Gilles Laramée

Proceeding under the Class Proceedings Act, 1992

HEARD: October 31, 2018

PERELL, J.

REASONS FOR DECISION

A. INTRODUCTION

[1] Pursuant to the Class Proceedings Act, 1992, [1] in 2012, the Plaintiffs, 0793094 B.C. Ltd. and The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund commenced proposed class actions. They advanced common law misrepresentation claims and also statutory causes of action under Part XXIII.1 of the Ontario Securities Act, [2] for misrepresentations in the secondary market.

[2] After numerous interlocutory motions, an appeal of an interlocutory order, voluminous documentary discovery, nearly 40 days of examinations for discovery, preparation for trial, and two rounds of mediation, the Plaintiffs and Class Counsel now bring motions for: (a) approval of a settlement of the action; (b) approval of the distribution plan; (b) payment of an honorarium to the Representative Plaintiffs; (d) approval of its Class Counsel’s counsel fee including disbursements.

[3] For the reasons that follow, the motions are granted.

B. FACTS

1. The Progress of the Class Action

[4] The Plaintiffs in the Action are 0793094 B.C. Ltd. (the family holding company of Brent Gray of British Columbia), and the Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund (a multi-employer pension plan).

[5] The Defendant, SNC-Lavalin Group Inc. (“SNC”), is a Montreal-based engineering, construction and infrastructure company with global operations. SNC is a reporting issuer within the meaning of Canadian securities legislation. Its shares trade on the TSX and on alternative trading platforms in Canada.

[6] The other Defendants are current or former officers and directors; namely Ian A. Bourne, David Goldman, Patricia A. Hammick, Pierre H. Lessard, Edythe A. Marcoux, Lorna R. Marsden, Claude Mongeau, Gwyn Morgan, Michael D. Parker, Hugh D. Segal, Lawrence N. Stevenson, Riadh Ben Aïssa, Pierre Duhaime, Michael Novak, and Stéphane Roy.

[7] The Plaintiffs purchased the shares of SNC during the period from November 6, 2009 to February 27, 2012. On November 6, 2009, the market capitalization of SNC was approximately $6.68 billion.

[8] On February 28, 2012, SNC issued a press release in which it announced the following:

SNC-Lavalin Group Inc. (TSX: SNC) announced today that its 2011 net income is expected to be approximately 18% (or approximately $80 million) below its previously announced 2011 outlook. Of this amount, the following items are expected to be recorded in the fourth quarter of 2011:

A loss of approximately $23 million from a revised position of the Company’s net financial exposure on its Libyan projects;

Unfavourable cost reforecasts on certain projects in its Infrastructure and Environment and Chemicals and Petroleum segments; and

Period expenses of approximately $35 million relating to certain payments made in the fourth quarter of 2011 that were documented to construction projects to which they did not relate and, consequently, had to be recorded as expenses in the quarter.

The Company’s Board of Directors initiated an independent investigation, led by its Audit Committee, of the facts and circumstances surrounding the $35 million of payments referred to above and certain other contracts. Independent legal counsel were retained in this connection. The investigation’s current findings support the Company’s accounting treatment of these payments. The Board of Directors is taking steps to implement changes and further appropriate actions arising from the investigation.

The Company is working with its external auditors and legal advisors to resolve all issues relating to the investigation to permit the auditors to deliver their audit report on a timely basis. The Company is working towards announcing and filing its 2011 fourth quarter and year-end financial results as soon as reasonably possible and in any event prior to March 30, 2012.

[9] Following the press release, the price of SNC’s shares declined from $48.37 on February 27, 2012, to $38.43 on February 28, 2012 and $37.40 on February 29, 2012, causing a drop in its market capitalization of hundreds of millions of dollars.

[10] On March 1, 2012, a proposed class action for secondary market misrepresentation was commenced in Québec styled Winder v. SNC-Lavalin Group Inc., et al. The Québec action was subsequently re-styled as Delaire v. SNC-Lavalin.

[11] On March 26, 2012, SNC released its MD&A for financial year ended December 31, 2011, which disclosed the results of the internal investigation announced in the press release. There was disclosure of a $56 million payment made under three agency agreements.

[12] On April 13, 2012, it was disclosed that the RCMP had conducted a search of SNC’s headquarters in Montreal. Several criminal proceedings were to follow.

[13] On May 9, 2012, an action styled Gray v SNC-Lavalin Group Inc., was commenced in Toronto with Rochon Genova LLP as counsel, and an action styled The Trustees of the Drywall Acoustic Lathing and Insulation Local 675 Pension Fund v SNC-Lavalin Group Inc., was commenced in Brampton with Siskinds LLP was counsel to the Plaintiffs. Both actions were proposed class actions for secondary market misrepresentations.

[14] Rochon Genova LLP and Siskinds LLP decided to form a consortium to prosecute their actions together.

[15] On June 25, 2012, it was disclosed that two former employees of SNC had been charged under the Corruption of Foreign Public Officials Act relating to SNC’s attempt to secure a contract for the construction of the Padma Bridge project in Bangladesh.

[16] On June 29, 2012, the two Ontario actions were consolidated, and the action was discontinued against certain defendants. The same day, the Plaintiffs served their motion record for certification under the Class Proceedings Act, 1992 and for leave to bring a statutory action under the Ontario Securities Act.

[17] On July 6, 2012, the Plaintiffs served a supplementary motion record.

[18] On August 3, 2012, SNC and the outside director Defendants served a responding motion record.

[19] Negotiations to resolve the certification and leave motion followed, and the parties agreed to an unopposed certification and leave Order except with respect to Mr. Ben Aïssa and Mr. Roy, who had not filed a notice of intent to defend and who did not appear on the motions having been served.

[20] Thus, on September 19, 2012, the Defendants did not oppose leave being granted for the Plaintiffs to commence statutory causes of action under Part XXIII.1 of the Ontario Securities Act, and the analogous provisions of the securities legislation of the other Canadian provinces and territories.

[21] The Defendants also consented to the certification of a class action under the Class Proceedings Act, 1992. The Plaintiffs then discontinued their common law negligence and oppression claims. [3]

[22] The class action was now solely an action under the securities legislation. As a factual matter, the litigation was very complex. As a legal matter, the litigation was very complex, and its complexities were augmented by the circumstance that Part XXIII.1 of the Ontario Securities Act is uncharted deep sea legal waters.

[23] On November 26, 2012, it was disclosed that Swiss authorities were investigating possible illegal or improper payments by SNC in the approximate amount of $139 million, in addition to the $56 million that had been disclosed on February 28, 2012 and March 26, 2012.

[24] On November 28, 2012, it was disclosed that SNC’s former Chief Executive Officer, Pierre Duhaime, had been arrested and charged with fraud and other criminal offences related to the contract awarded to SNC with respect to the construction and operation of the McGill University Health Centre hospital project in Montreal (“MUHC Project”).

[25] On January 24, 2013, the Québec Superior Court authorized the Québec action as a class proceeding. The Court appointed Jean-Paul Delaire as representative plaintiff and granted leave to the plaintiff to commence an action under the secondary market liability provisions of the Québec Securities Act. Following the granting of authorization by the Québec Court, the Québec action was not actively pursued separately from the action in Ontario. It was agreed by the parties that documentary and oral discovery conducted in the Ontario action would also be used in the Québec action. The Québec Court was provided with updates on the progress of the action from time to time.

[26] After the certification of the Ontario action, class Members were given an opportunity to opt-out of the action. The deadline to opt-out passed on May 8, 2013. There were 153 opt-outs.

[27] On July 3, 2013, it was disclosed that SNC had paid a secret $13.5 million commission linked to a froth treatment plant in Alberta, the construction of which had been awarded to SNC in 2011 (“CNRL Project”).

[28] During 2013 through 2015, a number of motions were argued regarding documentary production, the Plaintiffs’ pleadings and the proposed discovery plan. One of the pleadings motions resulted in a motion for leave to appeal, another pleadings motion in an appeal to the Court of Appeal. There was considerable motion activity with respect to the production of documents and obtaining documentary disclosure from the related criminal proceedings.

[29] Subsequently, in January 2016, SNC and the outside director Defendants delivered a motion for summary judgment that sought the dismissal of the action. The motion focused on the question of whether a “public correction” is a necessary element of the right of action under Part XXIII.1, and whether the Plaintiffs could satisfy that requirement. The matter of whether or not and when if more than once there was a corrective disclosure was a fundamentally important issue in the immediate case, because under the Ontario Securities Act, it was a constituent element for liability and also for the calculation of damages. The Defendants proposed summary judgment motion was an attempt to dispose of the Plaintiffs’ claims in their entirety, failing which they had other substantive defences and defences to reduce their exposure to liability.

[30] On June 30, 2016, the Plaintiffs delivered a responding motion record to the Defendants’ summary judgment motion, and the Plaintiffs brought a cross-motion for summary judgment on several of the certified common issues.

[31] In August of 2016, I heard a motion for directions to determine whether either or both of the motions for summary judgment should be heard and determined. I decided that both summary judgment motions should be stayed and ordered that the action proceed to examinations for discovery and trial.

[32] In December 2016, there was a two-day mediation session before The Honourable Warren Winkler. The mediation was unsuccessful.

[33] In January of 2017, Mr. Ben Aïssa, who had previously been noted in default, delivered a Statement of Defence and had his noting in default set aside. Mr. Ben Aïssa return to the civil field of battle stirred up a hornet’s nest of interlocutory motion issues that raised difficult matters of substantive law.

[34] The Plaintiffs delivered amended Replies. SNC and certain of the other Defendants moved to strike out portions of Mr. Ben Aïssa’s Statement of Defence and the Plaintiffs’ Replies. The Defendants were largely successful in striking the pleadings they sought to have struck, and the action rolled along.

[35] Between April and September of 2017, the parties conducted nearly 40 days of examinations for discovery in Toronto and Montreal.

[36] In April of 2018, the Plaintiffs delivered their trial record.

2. The Proposed Settlement

[37] In May 2018, there was another two-day mediation with the Honourable Mr. Winkler again as the mediator. This mediation session was successful, and the parties reached a settlement agreement in principle.

[38] The key terms of the Settlement Agreement are as follows:

a. the Settlement is conditional on the approval of the Courts in Ontario and Québec; b. the Settlement does not constitute an admission of liability by the Defendants; c. SNC will pay $88 million and shall cause the Defendants’ insurers to pay $22 million for a total of $110 million; d. the amount of $1.5 million shall be paid, within thirty days of execution of the Settlement Agreement, to Siskinds LLP to be deposited into an interest-bearing trust account from which funds shall be paid toward Administration Expenses incurred prior to the issuance of the Approval Orders. This payment was received by Siskinds LLP on September 11, 2018; e. the amount of $108 million shall be paid, within ten days of the issuance of the last Approval Order, to the Administrator to be held in an escrow account for the benefit of the Class Members and disbursed in accordance with the Settlement Agreement and the Approval Orders; f. on the Effective Date, all Defendants will receive a full and final release from all Class Members of all claims made against them in the actions; g. there is no provision for any reversion of the Settlement Amount to the Defendants or their insurers, unless the Settlement is not approved; h. if any remainder exists after the Net Settlement Amount is distributed pro rata in accordance with the Settlement Agreement and the Distribution Protocol, it will be distributed cy-près to one or more recipients to be approved by the Court. i. the Net Settlement Amount will be distributed to Class Members who file claims in accordance with the Distribution Protocol; and j. the approval of the Distribution Protocol and the request for Class Counsel Fees are not conditions of the approval of the Settlement itself.

[39] Notice of the settlement approval was disseminated. No objections have been received.

[40] The Plaintiffs and Class Counsel recommend the settlement as a substantial achievement and in the best interest of the Class.

3. The Risk and Damages Assessment and the Settlement Proceeds

[41] The Defendants had several substantive defences to liability which had the defences proven successful would have meant there was no damages recovery.

[42] The substantive defences raised complex evidentiary issues and complex matters of statutory interpretation and application of the Ontario Securities Act. The case specific risks, along with conventional risks associated with proving complex class actions, included:

a. the risk that the Court would find that there had been no misrepresentation made by the Defendants either because the alleged misstatements were not untrue or because they were not material; b. the risk that the Court would find that no public correction of the alleged misrepresentations had occurred, and relatedly that no damages flowed from the misrepresentations, which arguments were the basis for the Defendants’ summary judgment motion that was stayed without consideration of the merits; c. the risk that the Defendants would establish a “reasonable investigation” or due diligence defence pursuant to s.138.4(6) and (7) of the Ontario Securities Act;

[43] The assessment of damages also raised very complex legal and factual issues with considerable risk for both parties. The Plaintiffs pled that the alleged misrepresentations were publicly corrected in the news release issued by SNC on February 28, 2012 and through a number of subsequent corrective disclosures that did not emanate from SNC. The Defendants’ position was that none of the Plaintiffs’ pleaded corrective disclosures constituted public corrections of the pleaded misrepresentations as contemplated for damages under the Ontario Securities Act. If the Defendants were successful in arguing that the Plaintiffs’ alleged corrective disclosures did not constitute public corrections of the misrepresentations, the Defendants would have argued that damages should be assessed at zero under the legislative scheme.

[44] Further, the Defendants contended that Part XXIII.1 of the Ontario Securities Act does not provide for multiple corrective disclosures. If the Defendants had been successful in arguing that it is not possible to assert multiple corrective disclosures, the Plaintiffs would have been confined to arguing that the sole public correction was the SNC disclosure released on February 28, 2012 and the Defendants would have argued that the February 28, 2012 disclosure was not a valid corrective disclosure.

[45] Further, s. 138.5(3) of the Ontario Securities Act provided the Defendants with a mechanism to argue for a reduction in the amount of damages by establishing that news unrelated to the correction of the alleged misrepresentations negatively influenced share prices. In particular, it was anticipated that the Defendants would argue that the decline in the price of SNC shares in the period immediately after the February 28, 2012 disclosure was wholly or partly attributable to information that was unrelated to the alleged misrepresentations.

[46] The quantum of damages would also have been impacted by the determination of when the first misrepresentation was made. If the Court determined that a misrepresentation was not made in the disclosure document issued on the first day of the Class Period, but rather in a later document, that would contract the Class Period and reduce the quantum of damages.

[47] For the purposes of mediation, the Plaintiffs obtained a preliminary estimate of potential class-wide damages from Professor Joseph Weber from the MIT Sloan School of Management. Professor Weber assumed 100% participation by Class Members and based on certain other assumptions, he calculated damages under s. 138.5(3) of the Ontario Securities Act to be approximately $439.9 million using a single-trader proportional trading model and approximately $294.4 million using a multi-trader trading model.

[48] The Plaintiffs estimated that SNC’s liability limit under Part XXIII.1 was as low as $334 million and as high as $424 million, depending on the point in time during the Class Period used for the purposes of calculating SNC’s market capitalization, upon which SNC’s liability limit is calculated.

[49] If Professor Weber’s s. 138.5(3) damages approach was accepted, his higher estimate of damaged shares was accurate, all Class Members participated, and SNC’s proportionate liability was assessed at 100% (all of which was subject to doubt and risk), the Plaintiffs would not have been in a position to recover the full amount of the class-wide damages from SNC because of the capitalization limits on damages provided by Ontario Securities Act s. 138.7.

[50] A critical issue in the case was whether SNC could successfully rely on the proportionate liability provision in s. 138.6(1) of the Ontario Securities Act such that, if there was any liability on the part of SNC, it would be proportionately small relative to the greater liability of the senior executive management defendants. SNC argued that this statutory provision enabled it to lay most of any civil liability at the feet of these defendants who might not, on their own, have the financial means (nor available insurance) to satisfy a substantial damages award.

4. Honoraria

[51] Honoraria of $10,000 per plaintiff are requested for each of the Plaintiffs in recognition of the commitment, time and energy they gave in advancing this matter on behalf of the Class.

[52] The Representative Plaintiffs subjected their particular circumstances and business practices to significant scrutiny by way of documentary production and discovery. They were involved through pleadings, certification, examinations for discovery, preparation for trial and mediation. They were active participants throughout the litigation.

5. Distribution Protocol

[53] The Distribution Protocol creates a claims process for Class Members to seek compensation that employs a damage calculation formula analogous to the formulae set out in s.138.5(1) of the Ontario Securities Act. The Distribution Protocol incorporates expert evidence that became available during the course of the action.

[54] The approach taken in the Distribution Protocol mirrors the Plaintiffs’ damages theory that the value of SNC common shares was artificially inflated during the Class Period and that the artificial inflation was removed, to a significant degree, in the ten trading days after the February 28, 2012 corrective disclosure.

[55] The Distribution Protocol also seeks to reflect anticipated arguments that might have been made by the Defendants under s. 138.5(3) of the Ontario Securities Act. It was anticipated that the Defendants would argue that any drop in the share price prior to the first alleged corrective disclosure on February 28, 2012 was unrelated to the alleged corrective disclosure. As such, the Distribution Protocol uses a maximum purchase price of $48.37. That maximum purchase price is reflected in the definition of “Acquisition Expense” in the Distribution Protocol; and it was anticipated that the Defendants would argue that the alleged corrective disclosure on February 28, 2012 included negative information unrelated to the alleged misrepresentations and, therefore, some of the decline in the price of SNC shares on February 28, 2012 and February 29, 2012 was attributable to news unrelated to the pleaded misrepresentations. The Distribution Protocol utilizes a post-correction floor price of $41.69.

[56] The key elements of the Distribution Protocol are as follows are:

a. the objective of the Distribution Protocol is to equitably distribute the Net Settlement Amount among Authorized Claimants having regard to the issues in the Action; b. the Administrator will administer all claims pursuant to the terms of the Distribution Protocol; c. the Administrator, in the absence of reasonable grounds to the contrary, will assume Claimants to be acting honestly and in good faith; d. Claimants will have 120 days from the date of the publication of notice of approval of the Settlement within which to submit a claim to the Administrator; e. the Administrator will have discretion to correct minor omissions or errors in a Claim Form; f. in the event of a denial of a claim by the Administrator, there is a process whereby a Claimant can request that there be a reconsideration of the claim. Any decision of the Administrator after a reconsideration of the claim is final and binding and not subject to further review or appeal; g. this is a non-reversionary settlement and, as such, the Net Settlement Amount will be distributed to Authorized Claimants on pro rata basis pursuant to the terms of the Distribution Protocol; and, h. if any remainder exists after the Net Settlement Amount is distributed pro rata in accordance with the Settlement Agreement and the Distribution Protocol, it will be distributed cy-près to one or more recipients to be approved by the Court.

[57] Class Counsel believes that the Distribution Protocol will achieve its stated objective of equitably distributing the Net Settlement Amount among Authorized Claimants.

6. Fee Request

[58] At the outset of the litigation, the Plaintiffs entered into Retainer Agreements with Class Counsel which provided, among other things, as follows:

a. Class Counsel would undertake the litigation on a contingent fee basis, and would be paid only in the event of success as defined in the retainer agreements; b. Class Counsel would fund the disbursements incurred in advancing litigation, which would be recovered in the event of success from a settlement or judgment; and, c. Class Counsel would indemnify the Plaintiffs against any award of adverse costs made against them at any stage of the Action.

[59] The retainer agreements provided that Class Counsel would be paid on a percentage basis from any settlement or judgment obtained on behalf of the Class, with the applicable percentages varying depending on the circumstances when the case is resolved. The circumstances relevant to determining the percentages applicable under the retainer agreements are as follows:

a. The action continued on a contested basis for nearly six years after the Court granted leave and certification of the action. Accordingly, pursuant to section 7 of the Retainer Agreements, the operative base percentage is 27.5%; b. Pursuant to paragraph 11 of the Retainer Agreement, Class Counsel agreed to indemnify the Plaintiffs against any award of adverse costs made against them. Paragraph 12 specifies that in exchange for providing such indemnity, the Plaintiffs agree that the base percentage in the Retainer Agreements shall be increased by 5.0%, to 32.5%; c. Pursuant to paragraph 8 of the Retainer Agreements, the base percentage of 32.5% is applied to the first $20 million recovered; the applicable percentage is reduced by 5% to 27.5% for amounts between $20 million and $40 million; the applicable percentage is reduced by an additional 5% to 22.5% for amounts between $40 and $60 million; and the applicable percentage for amounts above $60 million is 17.5%. d. Accordingly, the Retainer Agreements provide for a fee calculated as follows: 32.5% on first $20 million = $6.5 million; 27.5% on next $20 million = 5.5 million; 22.5% on next $20 million = $4.5 million; 17.5% on amount above $60 million = $8.75 million. Total requested fees $25.25 million

[60] Siskinds LLP and Rochon Genova LLP have collectively docketed time which, applying standard hourly rates, equates to work in process of $9,114,909.50, exclusive of HST. They have financed disbursements of $2,393,423.69 and HST on those disbursements of C$256,006.24.

[61] Up to and including October 1, 2018, Siskinds LLP has docketed 15,655 hours equating to fees of $6,099,030.50 at standard hourly rates. HST on those fees would amount to $792,873.97. Up to and including September 19, 2018, Siskinds LLP has financed disbursements of C$1,752,641.58 and HST on those disbursements of $213,883.57.

[62] Since the commencement of the action up to September 24, 2018, Rochon Genova LLP has docketed fees of $3,015,879.00 and HST on those fees of C$392,064.27, and Rochon Genova LLP has financed disbursements of $640,782.11 and HST on those disbursements of $42,122.67.

[63] Class Counsel estimates that it will accrue approximately $150,000 in additional time before the work on this matter is completed.

[64] The global fee requested, including the fee to be sought in the Québec Action, is $25.25 million, which equates to 22.95% of the settlement. The fee in this action is $23.25 million plus disbursements and applicable taxes. This reflects a multiplier of approximately 2.54 on the time spent by Class Counsel. The fee requested in the Québec action, which was largely deferred in favour of the Ontario action, will be $2 million plus disbursements and applicable taxes.

[65] The Representative Plaintiffs support Class Counsel’s fee request.

C. ANALYSIS

1. Settlement Approval

[66] Section 29 of the Class Proceedings Act, 1992 requires court approval for the discontinuance, abandonment, or settlement of a class action. Section 29 states:

Discontinuance, abandonment and settlement

29.(1) A proceeding commenced under this Act and a proceeding certified as a class proceeding under this Act may be discontinued or abandoned only with the approval of the court, on such terms as the court considers appropriate.

Settlement without court approval not binding

(2) A settlement of a class proceeding is not binding unless approved by the court.

Effect of settlement

(3) A settlement of a class proceeding that is approved by the court binds all class members.

Notice: dismissal, discontinuance, abandonment or settlement

(4) In dismissing a proceeding for delay or in approving a discontinuance, abandonment or settlement, the court shall consider whether notice should be given under section 19 and whether any notice should include,

(a) an account of the conduct of the proceeding; (b) a statement of the result of the proceeding; and (c) a description of any plan for distributing settlement funds.

[67] Section 29(2) of the Class Proceedings Act, 1992, provides that a settlement of a class proceeding is not binding unless approved by the court. To approve a settlement of a class proceeding, the court must find that, in all the circumstances, the settlement is fair, reasonable, and in the best interests of the class. [4]

[68] In determining whether a settlement is reasonable and in the best interests of the class, the following factors may be considered: (a) the likelihood of recovery or likelihood of success; (b) the amount and nature of discovery, evidence or investigation; (c) the proposed settlement terms and conditions; (d) the recommendation and experience of counsel; (e) the future expense and likely duration of the litigation; (f) the number of objectors and nature of objections; (g) the presence of good faith, arm’s-length bargaining and the absence of collusion; (h) the information conveying to the court the dynamics of, and the positions taken by, the parties during the negotiations; and (i) the nature of communications by counsel and the representative plaintiff with Class Members during the litigation. [5]

[69] In determining whether to approve a settlement, the court, without making findings of fact on the merits of the litigation, examines the fairness and reasonableness of the proposed settlement and whether it is in the best interests of the class as a whole having regard to the claims and defences in the litigation and any objections raised to the settlement. [6] An objective and rational assessment of the pros and cons of the settlement is required. [7]

[70] In mandating that settlements are subject to court approval, the class action statutes place an onerous responsibility to ensure that the class members interests are not being sacrificed to the interests of Class Counsel who have typically taken on an enormous risk and who have a great deal to gain not only in removing that risk but in recovering an enormous reward from their contingency fee. The incentives and the interests of class counsel may not align with the best interests of the class members, and, thus, it falls on the court to seriously scrutinize the proposed settlement both in its making and in its substance. [8]

[71] The case law establishes that a settlement must fall within a zone of reasonableness. Reasonableness allows for a range of possible resolutions and is an objective standard that allows for variation depending upon the subject-matter of the litigation and the nature of the damages for which the settlement is to provide compensation. [9] A settlement does not have to be perfect, nor is it necessary for a settlement to treat everybody equally. [10]

[72] Generally speaking, the exercise of determining the fairness and reasonableness of a proposed settlement involves two analytical exercises. The first exercise is to use the factors and compare and contrast the settlement with what would likely be achieved at trial. The court obviously cannot make findings about the actual merits of the Class Members’ claims. Rather, the court makes an analysis of the desirability of the certainty and immediate availability of a settlement over the probabilities of failure or of a whole or partial success later at a trial. The court undertakes a risk analysis of the advantages and disadvantages of the settlement over a determination of the merits. The second exercise, which depends on the structure of the settlement, is to use the various factors to examine the fairness and reasonableness of the terms and the scheme of distribution under the proposed settlement. [11]

[73] In the case at bar, a case with which I am very familiar, I have no doubt that the settlement is a good settlement, and I approve it. The settlement is well within the zone of reasonableness. In all the circumstances, the settlement and the distribution plan is fair, reasonable, and in the best interests of the class. The Representative Plaintiffs deserve their honorarium and it too is approved.

2. Fee Approval

[74] The fairness and reasonableness of the fee awarded in respect of class proceedings is to be determined in light of the risk undertaken by the lawyer in conducting the litigation and the degree of success or result achieved. [12]

[75] Factors relevant in assessing the reasonableness of the fees of class counsel include: (a) the factual and legal complexities of the matters dealt with; (b) the risk undertaken, including the risk that the matter might not be certified; (c) the degree of responsibility assumed by class counsel; (d) the monetary value of the matters in issue; (e) the importance of the matter to the class; (f) the degree of skill and competence demonstrated by class counsel; (g) the results achieved; (h) the ability of the class to pay; (i) the expectations of the class as to the amount of the fees; and (j) the opportunity cost to class counsel in the expenditure of time in pursuit of the litigation and settlement. [13]

[76] The court must consider all the factors and then ask, as a matter of judgment, whether the fee fixed by the agreement is reasonable and maintains the integrity of the profession. [14]

[77] In my opinion, having regard to the various factors used to determine whether to approve Class Counsel’s fee request, Class Counsel’s fee request in the immediate case should be approved. Quite simply, they earned their fee.

D. CONCLUSION

[78] For the above reasons, the motions are granted.

Perell, J. Released: October 31, 2018