COURT FILE NO.: CV-15-536174

DATE: 2020/11/26

ONTARIO

SUPERIOR COURT OF JUSTICE.

BETWEEN:

JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES

Plaintiffs

– and –

ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)

Defendants

Louis Sokolov, Daniel E. H. Bach, and Andy Seretis for the Plaintiffs

Caroline Humphrey for the Defendants, Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, Credit Suisse AG and Credit Suisse Securities (Canada), Inc.

Caitlin Sainsbury and Pierre Gemson for the Defendant Deutche Bank AG

Robert Carson for the Defendants Royal Bank of Canada and RBC Capital Markets LLC

Stephen Aylward for the Defendants Toronto Dominion Bank, TD Bank, N.A., TD Group US Holdings, LLC, TD Bank USA, N.A. and TD Securities Limited

Samantha Gordon for the Defendants Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., Royal Bank of Scotland PLC

Chris Kinnear Hunter for the Defendants Société Générale S.A., Société Générale (Canada), Société Générale

Zev Smith for the Defendants, UBS AG, UBS Securities LLC, UBS Bank (Canada)

Proceeding under the Class Proceedings Act, 1992

HEARD: November 26, 2020

PERELL, J.

REASONS FOR DECISION

[1] This is a counsel fee approval motion in this on-going competition law class action under the Class Proceedings Act, 1992[^1].

[2] 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.[^2] 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.[^3]

[3] These risks of a class proceeding include all of liability risk, recovery risk, and the risk that the action will not be certified as a class proceeding.[^4]

[4] Fair and reasonable compensation must be sufficient to provide a real economic incentive to lawyers to take on a class proceeding and to do it well.[^5]

[5] Accepting that Class Counsel should be rewarded for taking on the risk of achieving access to justice for the Class Members, they are not to be rewarded simply for taking on risk divorced of what they actually achieved.[^6] Placing importance on providing fair and reasonable compensation to Class Counsel and providing incentives to lawyers to undertake class actions does not mean that the court should ignore the other factors that are relevant to the determination of a reasonable fee.[^7] 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.[^8]

[6] In an action commenced on September 11, 2015, the Plaintiffs[^9] sued 18 groups of financial institutions for $1.0 billion.[^10]

[7] The Plaintiffs allege that the Defendants conspired with each other to fix prices in the futures exchange market (the “FX Market”). It is alleged that through the use of multiple chat rooms with names such as “The Cartel,” “The Bandits’ Club,” and “The Mafia,” the Defendants communicated directly with each other to coordinate their: (a) fixing of spot prices; (b) control and manipulation of FX benchmark rates; and (c) exchange of key confidential customer information to trigger client stop loss orders and limit orders. The Plaintiffs allege that the Defendants’ conspiracy impacted all manner of FX instruments, including those trading both over-the-counter and on exchanges.

[8] The Plaintiffs have settled with fourteen groups of Defendants. The Defendants, RBC, Credit Suisse, Deutsche Bank, and TD have not settled. The action was certified as against these Defendants in April 2020.[^11]

[9] The process for distribution of the settlement funds to Canadian Class Members is approaching completion, and the action against the non-settling defendants continues. Class Counsel requests approval of a further instalment of fees in respect of the settlements.

[10] Class Counsel requests payment of $6,325,000 in addition to the interim fee awards that were made in 2018. If approved, the total amount of fees relating to the settlements will amount to 17.6% of the settlements, which is a multiplier of 2.5 of Class Counsel’s docketed time.

[11] In addition, Class Counsel requests approval to be paid the costs award of $140,000 (inclusive of taxes) from the motion to add BMO and TD as defendants, and Class Counsel requests that the Court approve payment of disbursements totaling $27,164.22 (inclusive of taxes).

[12] Class Counsel has entered into retainer agreements with the representative plaintiffs, which were approved in the context of the earlier fee approval orders. The agreements provide for a sliding scale of payment depending on the stage of the action in which a settlement is obtained. Settlements reached before certification provide for a counsel fee of 25% plus applicable taxes and disbursements. The retainer agreements also permit Class Counsel to be paid any amounts received as costs.

[13] Pursuant to the retainer agreements, Class Counsel agreed to provide indemnities to the Plaintiffs for any adverse costs awards. There has been no indemnification in this case by the Class Proceedings Fund, or any third-party funder. As a result, there will be no deduction from the settlement fund to repay the CPF or a third-party funder. As noted by the Court on the first motion to approve fees in this case, if indemnification from the CPF had been sought, a 10% levy would have been payable out of the settlements to the CPF.

[14] The Court has previously made six orders for the payment of fees and/or disbursements. The Court has approved interim fees in the amount of $13,050,000 pursuant to the following orders: (a) $3,987,500 plus applicable taxes on November 9, 2016; (b) $2.0 million plus applicable taxes on April 20, 2017; (c) $7.0 million plus applicable taxes on July 5, 2018; and (d) $62,500 plus applicable taxes on July 16, 2020.

[15] The certification motion resulted in a costs award that included $700,000, all-inclusive, for fees.

[16] Since the July 2018 fee approval order, the work of Class Counsel has included, among other things, the following: (a) preparing for and arguing the certification motion against the then five non-settling defendants; (b) preparing Administration and Distribution Protocols for the distribution of settlement funds which were approved in July 2018 and revised with court approval in August 2019; (c) working with the claims administrator to facilitate the distribution plans; (d) retaining an independent, internationally-recognized data science firm, Velador Associates Ltd. to review Direct Claimants’ claims for any deficiencies and to calculate their entitlements; and (e) preparing a discovery plan for the continuing action against the non-settling defendants.

[17] Since the July 2018 fee approval order, Class Counsel also successfully appealed with respect to the joinder of BMO and TD as party defendants.

[18] Class Counsel continues its factual investigation into the alleged conspiracy, including monitoring any regulatory findings, guilty pleas and U.S. settlements. To date, the settling defendants, collectively, have provided over 350,000 documents, including thousands of chat transcripts. Class Counsel continues its review of those documents with the assistance of industry experts in the interpretation of the coded language used in the chat transcripts.

[19] Class Counsel continues to communicate with its consulting experts who have expertise and industry knowledge of the FX market, both for the purposes of assisting in settlement discussions, as well as assisting in the prosecution of this action against the non-settling defendants.

[20] Since the outset of the action, Class Counsel has incurred approximately $7.75 million in docketed time. Since June 1, 2018 (the cut-off date of the July, 2018 fee approval), Class Counsel has incurred approximately $2.5 million in docketed time.

[21] 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. The class action has been challenging and vigorously contested with considerable litigation risk, and the action is continuing. Class Counsel has achieved settlements with all but four groups of Defendants, and all of the settlements have been approved by the court.

[22] I, therefore, grant and approve Class Counsel’s request for fees including the costs from the motion to add BMO and TD as defendants. I approve Class Counsel’s request for payment of disbursements.

[23] Order accordingly.

Perell, J.

Released: November 26, 2020

COURT FILE NO.: CV-15-536174

DATE: 2020/11/26

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

JOSEPH S. MANCINELLI, CARMEN PRINCIPATO, DOUGLAS SERROUL, LUIGI CARROZZI, MANUEL BASTOS and JACK OLIVEIRA in their capacity as THE TRUSTEES OF THE LABOURERS’ PENSION FUND OF CENTRAL AND EASTERN CANADA, and CHRISTOPHER STAINES

Plaintiffs

– and –

ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANK OF AMERICA CANADA, BANK OF AMERICA NATIONAL ASSOCIATION, THE BANK OF TOKYO MITSUBISHI UFJ LTD., BANK OF TOKYO-MITSUBISHI UFJ (CANADA), BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., BARCLAYS CAPITAL CANADA INC., BNP PARIBAS GROUP, BNP PARIBAS NORTH AMERICA INC., BNP PARIBAS (CANADA), BNP PARIBAS, CITIGROUP, INC., CITIBANK, N.A., CITIBANK CANADA, CITIGROUP GLOBAL MARKETS CANADA INC., CREDIT SUISSE GROUP AG, CREDIT SUISSE SECURITIES (USA) LLC, CREDIT SUISSE AG, CREDIT SUISSE SECURITIES (CANADA), INC., DEUTSCHE BANK AG, THE GOLDMAN SACHS GROUP, INC., GOLDMAN, SACHS & CO., GOLDMAN SACHS CANADA INC., HSBC HOLDINGS PLC, HSBC BANK PLC, HSBC NORTH AMERICA HOLDINGS INC., HSBC BANK USA, N.A., HSBC BANK CANADA, JPMORGAN CHASE & CO., J.P.MORGAN BANK CANADA, J.P.MORGAN CANADA, JPMORGAN CHASE BANK NATIONAL ASSOCIATION, MORGAN STANLEY, MORGAN STANLEY CANADA LIMITED, ROYAL BANK OF SCOTLAND GROUP PLC, RBS SECURITIES, INC., ROYAL BANK OF SCOTLAND N.V., ROYAL BANK OF SCOTLAND PLC, SOCIÉTÉ GÉNÉRALE S.A., SOCIÉTÉ GÉNÉRALE (CANADA), SOCIÉTÉ GÉNÉRALE, STANDARD CHARTERED PLC, UBS AG, UBS SECURITIES LLC and UBS BANK (CANADA)

Defendants

REASONS FOR DECISION

PERELL J.

Released: November 26, 2020.

[^1]: S.O. 1992, c. 6. [^2]: Parsons v. Canadian Red Cross Society, 2000 CanLII 22386 (ON SC), [2000] O.J. No. 2374 at para. 13 (S.C.J.); Smith v. National Money Mart, 2010 ONSC 1334 at paras. 19-20, varied 2011 ONCA 233; Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 at para. 25 (S.C.J.). [^3]: Smith v. National Money Mart, 2010 ONSC 1334, varied 2011 ONCA 233; Fischer v. I.G. Investment Management Ltd., [2010] O.J. No. 5649 at para. 28 (S.C.J.). [^4]: Gagne v. Silcorp Ltd., 1998 CanLII 1584 (ON CA), [1998] O.J. No. 4182 t para. 17 (C.A.); Endean v. Canadian Red Cross Society, 2000 BCSC 971 at paras. 28 and 35. [^5]: Gagne v. Silcorp Ltd. (1998), 1998 CanLII 1584 (ON CA), 41 O.R. (3d) 417 (C.A.); Parsons v. Canadian Red Cross Society (2000), 2000 CanLII 22386 (ON SC), 49 O.R. (3d) 281 (S.C.J.); Vitapharm Canada Ltd. v. F. Hoffmann-La Roche Ltd., [2005] O.J. No. 1117 at paras. 59-61(S.C.J.); Sayers v. Shaw Cablesystems Ltd., 2011 ONSC 962 at para. 37. [^6]: Welsh v. Ontario, 2018 ONSC 3217 at para. 103. [^7]: Smith Estate v. National Money Mart Co., 2011 ONCA 233 at para. 92. [^8]: Commonwealth Investors Syndicate Ltd. v. Laxton, [1994] B.C.J. No. 1690 at para. 47 (B.C.C.A.). [^9]: The Plaintiffs are Christopher Staines and Joseph S. Mancinelli, Carmen Principato, Douglas Serroul, Luigi Carrozzi, Manuel Bastos, and Jack Oliveira, in their capacity as The Trustees of the Labourers’ Pension Fund of Central and Eastern Canada. [^10]: The Defendants are: (1) Royal Bank of Canada, RBC Capital Markets LLC; (2) Bank of America Corporation, Bank of America, N.A., Bank of America Canada, Bank of America National Association; (3) The Bank of Tokyo Mitsubishi UFJ Ltd., Bank of Tokyo-Mitsubishi UFJ (Canada); (4) Barclays Bank PLC, Barclays Capital Inc., Barclays Capital Canada Inc.; (5) BNP Paribas, BNP Paribas (Canada), BNP Paribas Group, BNP Paribas North America Inc.; (6) Citibank, N.A., Citibank Canada, Citigroup Global Markets Canada Inc., Citigroup, Inc.; (7) Credit Suisse Group AG, Credit Suisse Securities (USA) LLC, Credit Suisse AG, Credit Suisse Securities (Canada), Inc.; (8) Deutsche Bank AG; (9) The Goldman Sachs Group, Inc., Goldman, Sachs & Co., Goldman Sachs Canada Inc.; (10) HSBC Holdings PLC, HSBC Bank PLC, HSBC North America Holdings Inc., HSBC Bank USA, N.A., HSBC Bank Canada; (11) J.P. Morgan Canada, JPMorgan Chase Bank National Association, JPMorgan Chase & Co., J.P. Morgan Bank Canada; (12) Morgan Stanley, Morgan Stanley Canada Limited; (13) Royal Bank of Scotland Group PLC, RBS Securities, Inc., Royal Bank of Scotland N.V., Royal Bank of Scotland PLC; (14) Société Générale S.A., Société Générale (Canada), Société Générale; (15) Standard Chartered PLC; and (16) UBS AG, UBS Securities LLC and UBS Bank (Canada); (17) Bank of Montreal, BMO Financial Corp., BMO Harris Bank N.A., BMO Capital Markets Limited; and (18) Toronto Dominion Bank, TD Bank, N.A., TD Group Holdings, LLC, TD Bank USA, N.A. and TD Securities Limited. [^11]: Mancinelli v. Royal Bank of Canada, 2020 ONSC 1646.