COURT FILE NO.: CV-16-70454CP
DATE: 2021/11/01
COURT OF ONTARIO,
SUPERIOR COURT OF JUSTICE
Action Pursuant to the Class Proceedings Act, 1992[^1]
RE: Davina Dixon, Daniel Dixon and Rebecca Dixon, Plaintiffs
AND:
Dr. Norman Barwin, Defendant
BEFORE: Regional Senior Justice Calum MacLeod
COUNSEL: Peter J.E. Cronyn, Frances Shapiro Munn & Jessica Fullerton, for the Plaintiffs
Karen Hamway & Scott Kugler, for the Defendant
HEARD: November 1, 2021
DECISION AND REASONS
[1] This was a motion to approve the settlement of this class action and to approve the fees and expenses of class counsel.
Background
[2] The litigation against Dr. Norman Barwin stems from his decades of work in the field of artificial insemination. In many cases, women were inseminated, and children were conceived, using genetic material that was not that of the correct father. In a number of cases, Dr. Barwin is said to have used his own genetic material.
[3] The representative plaintiffs are the members of an affected family. Davina Dixon and her husband Daniel had consulted Dr. Barwin for help with conception. Davina was artificially inseminated with what was supposed to be semen obtained from Daniel. Rebecca is the child born as the result of the procedure. In 2016, it was determined that Daniel is not Rebecca’s biological father and it has subsequently been determined that she is a genetic match with Dr. Barwin and various other half siblings who were conceived in the same manner. The plaintiffs brought the action on behalf of all affected children and their parents and sought to have it certified as a class proceeding.
[4] This litigation was started in 2016, but as it progressed, the situation became more complex and the size of the problem became larger than originally anticipated. The complexity of the factual background and the various individuals who could assert potential claims proved a challenge to the crafting of an appropriate class proceeding and to the definition of acceptable classes. Ultimately, however, the parties arrived at a proposed settlement including class definitions and common issues. I certified the action for settlement purposes in a motion heard on July 28, 2021.
[5] The classes described in the certification order were as follows:
a) Mothers Class: All patients of the defendant who were administered artificial insemination (AI) in Canada during the Class Period by either (i) the Defendant, or (ii) at another fertility clinic, with semen originally entrusted to the Defendant, from which AI they conceived and gave birth to a child whose biological father does not accord with the consent given by these patients in regard to the semen;
b) Spouse/Partner/Former Patient Class:
a. All persons who were a partner or spouse of a Mothers Class Member when the AI was administered and who agreed to have their own semen or specified donor semen used for the AI of a Mothers Class Member, but where the biological father of the child born of the AI does not accord with their said agreement; and
b. All patients of the defendant in Canada who entrusted their semen to the defendant for storage, safe-keeping or specific purpose but which semen was used in the course of AI performed by the defendant during the Class Period that resulted in the birth of one or more children who do not accord genetically with the consent these patients gave in regard to the storage and/or use of their semen;
c) Children Class: All persons conceived and born by Mother Class Members as a result of AI performed by the defendant during the Class Period with semen entrusted to the defendant whose biological father does not accord with the consent given by their biological mother for the AI.
[6] The common issues were certified as follows:
a. Did the Defendant owe the members of the Mothers Class a duty of care? If so, did the Defendant breach the duty resulting in compensable damages?
b. Did the Defendant owe the members of the Spouse/Partner Class a duty of care? If so, did the defendant breach the duty resulting in compensable damages?
c. Do the Children Class members have a cause of action arising from negligence or, in the alternative, pursuant to s. 61 of the Family Law Act, R.S.O 1990, c. F.3 resulting in compensable damages?
[7] Pursuant to the certification order, notice of the proposed settlement was circulated and this date advertised pursuant to s. 19 of the Class Proceedings Act. Members of the classes were given an opportunity to opt out of the settlement pursuant to s. 9 and also an opportunity to file an objection to the proposed settlement and to appear and be heard. No members of any of the classes chose to opt out and no member of any of the classes objected to the proposed settlement. Several class members attended the hearing but none of them asked to opt out or to object.
[8] For clarity, it is important for members of the classes to understand that if they did not opt out of the class proceeding then the members of each class are bound by the outcome of the class proceeding including an approved settlement. A class member who opts out will not share in the benefit of the class proceeding but retains the right to sue on his or her own behalf.
[9] On the other hand, a class member who files an objection remains a member of the class but is asking the court not to approve the settlement or is seeking a change or alteration before such approval is granted. The difference is that a party that objects but did not opt out remains bound by the outcome once the court has ruled on the matter.
[10] In this case, since there were neither opt outs nor objections, this indicates a very high level of approval and satisfaction with the outcome negotiated by class counsel. A significant number of class members attended at the hearing. None wished to object or to be heard.
Approval of the Settlement
[11] The proposed settlement involves the defendant paying a significant sum for the benefit of all class members without admission of legal liability. The proposed settlement is for an all-inclusive sum of $13,375.000.00. Taxes, administration, legal fees and other costs will have to come out of this amount, but there will still be significant benefits for each member of each class.
[12] As submitted by class counsel, the settlement is for aggregate damages and a plan of allocation that provides recovery for all class members without having to make individual legal arguments about whether or not the defendant owed a duty to that class member. There will be a claims process that is quick, efficient and straightforward. There will be no need for class members to testify or to be cross examined concerning the impact on the individual or his or her family.
[13] I have no doubt whatsoever that the settlement is in the best interests of each of these classes. Closure is a benefit for families who have endured the shock, trauma and sense of betrayal of discovering that their genetic heritage or that of their children has been misrepresented and altered. By contrast, continuation of a legal proceeding with an uncertain outcome would have prolonged and exacerbated the family trauma in the glare of a public hearing. Finally, the legal difficulties that would have existed for some or all of the class members in establishing both liability and damages should not be underestimated. This settlement, which is substantial and not merely a nominal settlement, is in the best interests of the plaintiffs and all class members.[^2]
[14] In terms of the value of the settlement, it is difficult to assess the fairness of the settlement amount in absolute terms. The fact situation underlying this litigation is not common and so there is no standard against which individual damages can easily be assessed. Tort damages are designed to compensate for losses.
[15] How can the damages suffered by a child who discovers such a situation be measured? After all, had there been a different genetic origin, that particular child would not have existed. Legally, in Ontario under the current state of the law, it is extremely difficult to establish that a physician owes any duty to a yet unborn children when treating the child’s mother.[^3] Proving compensable damages might be difficult, but a child in the position of Rebecca has had her entire life turned upside down by a discovery which profoundly alters her sense of self.
[16] What is the liability of the defendant to husbands of women who believed their child to have been conceived using their own semen or semen from a donor they had selected together? How can the damages be measured for women who were so profoundly betrayed and whose consent to such an intimate medical procedure was vitiated?
[17] I am indebted to class counsel for the comprehensive review of the difficulties in the law and the potential range of damages set out in paragraphs 63 – 67 and 78 - 81 of the factum. This case was a novel case with significant challenges to establishing legal liability and a right to compensation. Had the matter gone to trial, it would have required new inroads into the law in this area. Novel cases are almost always subject to appeal. A settlement ends the possibility of more protracted and expensive litigation.
[18] Under the proposed settlement, all members of a class are entitled to compensation without having to prove individual liability or damages, but they give up the right to seek individual compensation other than that they will receive under the settlement. In an aggregate damages award, such as that proposed here, the precise amount awarded to each class member will depend on the number of claimants. In this case, the claimants under each of the classes have been further subdivided by “harm category”.
[19] Harm category 1 involves families who consulted Dr. Barwin intending that the male partner’s semen would be used for artificial insemination and in which the child conceived through that process can be shown not to be the biological child of the father.
[20] Harm category 2 involves families who consulted Dr. Barwin intending to conceive by use of donated sperm and the child or children conceived by that process do not match the selected donor. This category is further subdivided into a category where the children conceived are the biological children of Dr. Barwin and a category where the biological father is someone else or is unidentified.
[21] Harm category 3 is a category of sperm donors who entrusted Dr. Barwin with storage and safe keeping of their semen and whose stored semen was used without consent to conceive a child.
[22] The proposed settlement includes payments of up to $50,000.00 for each parent in Harm Category 1 in either the mother class or the Spouse/Partner/Former Patient Class, up to $40,000.00 for each of those individuals in Harm Category 2A and $30,000.00 for those in Harm Category 2B. For those in Harm Category 3 there are payments of up to $25,000.00 and there are provisions to increase the payments if more than one child was conceived. The children in Harm Category 1 or in Harm Category 2 will each qualify for up to $40,000.00 or up to $30,000.00 respectively.
[23] In addition to the individual compensation summarized above, there will be a sum set aside for Orchid PRO-DNA Laboratories to set up and operate a DNA database for class members who wish to do so to obtain DNA testing during the claims period.
[24] I note that many of the class members have already been able to avail themselves of DNA testing. Prior to July that testing was funded by the defendant and since that time it has been funded by class counsel. The former is an expense outside the terms of the settlement and the latter will be reimbursed as part of the counsel compensation. This additional DNA testing will facilitate class members in making claims, but also can provide them with important genetic information.
[25] In my view the settlement is fair, is in the best interests of the members of the classes, and in addition the settlement is in the interests of justice.[^4] The fact that none of the class members opted out and that none of the class members either objected to the settlement nor asked to be heard at the hearing reinforces that view.
[26] An order will issue approving the proposed settlement, including the notice plan and the claims process in accordance with the draft order submitted for approval. Counsel for the defendant supports the motion by class counsel.
Approval of Class Counsel Compensation
[27] The purpose of class proceedings pursuant to the Act is to provide efficient access to justice in cases of liability to multiple plaintiffs particularly in situations where individual actions would not be practical. It is important that this objective is realized and that class proceeding litigation is not viewed simply as a tool for the enrichment of lawyers. Simply launching a class proceeding and signing a contingency fee agreement is not a blank cheque and the court is required to carefully scrutinize the proposed fees at the time of approving a settlement. Approval is not automatic.
[28] On the other hand, the Act and the jurisprudence recognize that in order for class proceedings to achieve their intended purpose, there must be sufficient incentive for skilled lawyers to act as class counsel. Under the legislative scheme, class counsel are entitled to reasonable compensation including an incentive to shoulder the time, expense and risk of a class proceeding. The Act also permits the reviewing court to consider whether a proceeding was “a test case, raised a novel point of law or involved a matter of public interest”.[^5] I have already commented on the novelty of this case. It is also a matter of public interest insofar as it involves the obligations of physicians working in fertility clinics. It has been the subject of much media attention.
[29] Not all class proceedings are successful, and counsel cannot know when launching a class proceeding how long it will take, how bitterly it will be fought and the chances of ultimate success. The Act recognizes that one mechanism for achieving these results is a multiplier of normal hourly rates. Another mechanism is a contingency fee agreement. These potential rewards permitted by the legislation balance the risk of recovering nothing should the class proceeding be unsuccessful.
[30] In this case counsel had signed a contingency fee agreement with the representative plaintiffs. Under that agreement, counsel had contracted for a contingency fee of 25 percent subject to court approval. This is in the mid-range of contingency fees that are common in class proceedings.[^6] In my view it is amply justified by the application of the factors set out in the legislation and the caselaw.
[31] To protect the members of the class and to ensure that the compensation is reasonable, the Act requires the court to approve both the contingency fee agreement and the proposed fee. It follows that while an agreement may be reasonable at the time it is signed, the court must also be satisfied that it is reasonable in its result. It is in the nature of contingency fee agreements that the risk of recovering nothing is balanced by the prospect of recovering a generous fee if matters go well. But as I observed above, it is not a blank cheque. That said, the agreed upon percentage is a starting point in the court’s analysis. The question for the court is, now that the outcome of the litigation is known, is the proposed fee reasonable and fair to the members of the class in all of the circumstances.
[32] The factors to be applied to that analysis include factual and legal complexities (addressed above), the risk undertaken by counsel including the risk that the proceeding might not be certified, the degree of responsibility assumed by class counsel, the monetary amount in issue, the importance of the matter to the class, the degree of skill and competence demonstrated by class counsel, the results achieved, the ability of the class to pay, the expectations of the class, and the opportunity cost to counsel of undertaking the work.[^7]
[33] As the affidavits of the representative plaintiffs indicate, this amount was agreed to and appears to them to be fair in light of the extensive work undertaken, costs incurred, time invested and the result obtained by class counsel. That position by the representative plaintiffs is not conclusive, but it carries weight along with the fact that none of the class members who were provided with notice or attended the hearing had any objection. [^8]
[34] In this case I am satisfied that class counsel undertook an extraordinary effort in relatively uncharted territory sometimes under intense media scrutiny. It was necessary to establish the facts, craft an appropriate class proceeding, identify and locate class members and engage in complex negotiation with the defendant’s counsel.
[35] I note that the defendant was willing to recognize from an early stage that a class proceeding was likely the most appropriate and efficient method of ensuring that appropriate compensation was provided to the women who were patients of Dr. Barwin and to the members of the other classes. Indeed, I commend counsel on both sides for bringing this matter to a negotiated resolution without the need for continued public exposition of intimate medical and other details of patients and other members of the classes. Nevertheless, the action itself was complex, it took place against a complex legal and factual background and the negotiations were strenuous.
[36] A significant amount of the time of the principal lawyers responsible for the matter was involved. A significant proportion of the resources of the Nelligan law firm were harnessed for the purpose. The docketed time on the file exceeds $1.85 million at normal hourly rates. This was a very significant investment of time by highly competent lawyers. There can be no doubt that without this effort, the members of the classes would not have obtained the result that I have been able to approve today.
[37] The amount sought by counsel is the amount generated by the contingency fee agreement or $3,343,750.00 plus HST and the disbursements. While the court will not slavishly enforce contingency agreements in all cases, in this case it would represent a multiplier of less than two times the ordinary hourly rates of the counsel involved. Counsel achieved a significant and meaningful result for all class members under circumstances in which it is very unlikely many of them would have obtained compensation through individual lawsuits.
[38] For all of the reasons above, the contingency agreement is approved, and the requested fee is granted. An order will go accordingly.
Regional Senior Justice C. MacLeod
Date: November 1, 2021
COURT FILE NO.: 16-70454CP
DATE: 2021/11/02
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Dixon et al v. Barwin
BEFORE: Regional Senior Justice Calum MacLeod
COUNSEL: Peter J.E. Cronyn, Frances Shapiro Munn & Jessica Fullerton, for the Plaintiffs
Karen Hamway & Scott Kugler, for the Defendant
DeCISION AND REASONS
Regional Senior Justice C. MacLeod
Date: November 2, 2021
[^1]: Class Proceedings Act, 1992, S.O. 1992, c.6, as amended [^2]: See the analysis in McKillop and Bechard v. HMQ, 2014 ONSC 1282 [^3]: See Florence v. Benzaquen, 2021 ONCA 523 @ para. 90 although there is a powerful dissent by Fairburn ACJO [^4]: The factors to be considered in approving a settlement and the evidence to support those findings are now codified in s. 27.1 of the Act. [^5]: See s. 31 of the Act [^6]: See Baker (Estate) v. Sony BMG Music (Canada) Inc., 2011 ONSC 7105 [^7]: See Smith Estate v. National Money Mart Co., 2011 ONCA 233 and Welsh v. Ontario, 2019 ONCA 41 [^8]: See Johnston v. The Sheila Morrison Schools, 2013 ONSC 1528