Court Information

COURT FILE NO.: CV-15-53262500-CP DATE: 20240104 ONTARIO SUPERIOR COURT OF JUSTICE SUPERIOR COURT (Class Action Division) CANADA PROVINCE OF QUÉBEC DISTRICT OF MONTRÉAL No.: 500-06-000781-167

Between: CHRISTOPHER BRAZEAU and DAVID KIFT Plaintiffs - and - ATTORNEY GENERAL OF CANADA Defendant Proceeding under the Class Proceedings Act, 1992

Between: ARLENE GALLONE Plaintiff c. PROCUREUR GÉNÉRAL DU CANADA Defendant

And Between: COURT FILE NO.: CV-17-570771-00CP JULLIAN JORDEA REDDOCK Plaintiff - and - ATTORNEY GENERAL OF CANADA Defendant Proceeding under the Class Proceeding Act, 1992

Date hearing/d'audience: In writing

Counsel

Counsel: James Sayce, Gerry Antman, and Karine Bédard for the Plaintiffs in Brazeau and Kift v. Attorney General of Canada H. Michael Rosenberg, Jacob Klugsberg and Adam H. Kanji for the Plaintiff in Reddock v. Attorney General of Canada André Lespérance and Clara Poissant-Lespérance for the Demanderesse in Gallone c. Procureur Général du Canada Negar Hashemi, Éric Lafrenière, Susan Gans, Richard J. Campbell, and Lindy Rouillard-Labbé for the Defendant ou Défenderesse in: (a) Brazeau and Kift v. Attorney General of Canada; (b) Reddock v. Attorney General of Canada; and (c) Gallone c. Procureur Général du Canada

Reasons for Decision/Jugement – Part 10

MASSE, J. and PERELL, J.

[1] Pursuant to the Class Proceedings Act, 1992 [1], Justice Paul Perell of the Ontario Superior Court of Justice is case managing the Ontario class actions, Brazeau v. Canada (Attorney General) and Reddock v. Canada (Attorney General).

[2] Pursuant to the Québec Code of Civil Procedure [2], Justice Chantal Masse, of the Superior Court of Québec is case managing the Québec class action, Gallone c. Canada (Attorney General). [3]

[3] This is Part 10 of our jointly written decision or judgment in Brazeau, Reddock, and Gallone. While it is a jointly written decision, it may and should be read as separate decisions of the Ontario Superior Court of Justice and of the Superior Court of Québec.

[4] In Part 1, we prepared a Draft Distribution and Individual Issues Protocol (“DIIP”). The Protocol was a provisional decision. We invited the parties to make submissions in writing. In Part 2, we approved the DIIP. After the release of our Part 2 decision, the parties had further consultations about the Protocol, including discussions with the administrator. Those further consultations resulted in further revisions to the DIIP, which we made in Parts 3, 4, 5, 6, 7, 8, and 9. Most of the revisions to the Protocol were made on consent motions. There were also several consent or unopposed motions for which we issued Orders but for which we did not prepare Reasons for Decision.

[5] On this motion, Class Counsel request several further revisions to the Protocol. They request:

a. an Order that s. 10.46 of the DIIP shall be amended by replacing "$6,000" to "$12,000" and to allow the parties to seek costs above $12,000 in particular circumstances;

b. an Order that s. 1.8 of the DIIP shall be amended by adding the underlined:

1.8 Nothing in this Protocol precludes the parties from settling a claim proceeding on Tracks 2 or 3 of the Protocol. Rule 49 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, applies to a claim proceeding on Tracks 2 or 3 of the Protocol.

c. an Order that ordinary costs rules, pursuant to the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, apply on a contested motion for confirmation for Track 2 claimants.

[6] The second and third requests are unopposed. They are useful revisions to the DIIP. We approve these revisions.

[7] However, we do not approve the request to remove the $6,000 cap on the costs for Track 2 claims.

[8] The DIIP establishes three tracks for claims for compensation. Track 2 was designed to “[s]treamline the Track 2 process in a manner that: benefits class members by stipulating their damages award in a fair and efficient manner; reduces the fees incurred by Class Counsel and the Attorney General of Canada; [and] reduces the burden placed on the Managers/Experts in adjudicating Track 2 claims.”

[9] Section 7.31 of the DIIP provides that where a claimant elects to proceed in Track 2, he or she may advance claims as set out in a Damages Grid. The Damages Grid provides for awards up to but not exceeding $40,000 for Reddock and Gallone Class Members and not exceeding $50,000 for Brazeau Class Members.

[10] Section 2.4 of the DIIP states:

2.4 Subject to the Court’s approval, if a Claimant selects Track 2, Class Counsel or the lawyer retained to act for the Claimant may charge a fee for services with respect to the Track 2 claim, with such fee not to exceed 15% of the damages awarded plus reasonable disbursements, and any award of costs made in favour of the Claimant.

[11] Section 7.39 of the DIIP states:

7.39 Where a Claimant selects Track 2 and is proceeding before the Ontario Superior Court of Justice, the Court may award costs not to exceed $6,000, plus reasonable disbursements. Where a Claimant selects Track 2 and is proceeding before the Québec Superior Court of Justice, there will be no award of costs for either party.

[12] With court approval, the costs awards for the Track 2 claims are Class Counsel’s additional fee for prosecuting the claim for the Claimant in the Ontario Courts. It is worth noting that given the no-costs regime in Québec, Class Counsel in Québec complete the same work without any costs at all. Québec Class Counsel undertake this work based on the 15% fee they will receive for each successful claim as well as the $1.8 million counsel fee they already received from the common issues judgment.

[13] Generally speaking, the costs of litigation should correspond to or be in a reasonable proportionate relationship to the amount in issue. Section 7.39 was designed with this thought in mind and to encourage efficient and economical proceedings. The $6,000 cost cap is proportionate because the maximum award of a Track 2 claim is $50,000 for Brazeau Class Members. Increasing the costs cap to $12,000 would authorize costs worth 24% of the maximum award and 48% of the midpoint of $25,000, which are not proportionate costs awards. The $6,000 costs cap is proportionate because the maximum award of a Track 2 claim is $40,000 for Reddock and Gallone Class Members. Increasing the costs cap to $12,000 would authorize costs worth 30% of the maximum award and 60% of the midpoint of $20,000, which are not proportionate costs awards.

[14] In the Part 1 decision, we concluded that a $6,000 cap was appropriate and proportionate. Since that time, because of revisions to the DIIP, it has become or it should have become less labour intensive. In our Part 5 decision, the Track 2 claims process was streamlined to reduce materials that can be filed, to include presumptions of causation, the Box 1 amount, the Box 2 automatic payments, and the amendments to Box 3. These revisions improved the DIIP and should have simplified Class Counsel’s work.

[15] Class Counsel, however, submits that now that the DIIP has become operational, it has become apparent that the $6,000 costs cap should be removed to ensure the viability of the DIIP. Class Counsel relate that in practice, the Track 2 process requires far more time and work from legal professionals than was originally contemplated. Class Counsel submits that for the process to remain workable, an increase in adverse costs is necessary and that such an adjustment will disincentivize re-litigation, overlitigation, or unnecessary steps by both sides.

[16] Class Counsel says that the $6,000 "cap" ceiling has proven to be a drastic undervaluation of the value of legal work that Class Counsel must undertake to advance Track 2 claims. Class Counsel blames Canada’s for the increased cost and alleges that Canada has failed to comply with its disclosure obligations under the DIIP.

[17] Assuming that it is true that Canada is responsible for the undervaluation of the work of Class Counsel, nevertheless, it does not follow that increasing the costs cap to $12,000 for all of the Track 2 claims is the remedy for the problem, which may be a temporary problem in any event. If Canada is not complying with its obligations under the DIIP, the remedy for the problem is to bring a motion to require Canada to fulfill its disclosure obligation as required by the DIIP.

[18] In any event, costs awards are not the means to design an effective and economic procedure for the Track 2 claims. The solution is to design a procedure that accords with and is proportionate to the value of the claims. The solution is to simplify the procedure as necessary to make it affordable. In our opinion, the way to make the Track 2 process workable as efficient economic litigation is to design it so that it is efficient and economic from the outset. That was the purpose of our Part 5 decision and several other decisions where revisions were made to the DIIP.

[19] As reflected by the Small Claims Court procedure or the simplified procedure or by Track 2 for that matter, the solution for litigation that is too expensive is to make it less expensive. In the immediate case, further revisions may be made to the design of the procedure for Track 2 claims and that is preferable to an across the board increase in the costs awards.

[20] Further, although Class Counsel’s recent experience with the early stages of Track 2 claims has proven more time consuming than anticipated, that experience may be transitional. In other words, the economies of scale, are yet to be achieved to justify the $6,000 cap on costs.

[21] In the immediate case, Class Counsel attempted to justify the increase to the costs for the Track 2 claims by reference to the time spent with Class Members who upon taking instructions are found to be ineligible to make any Track 2 claims. That circumstance is, however, a cost of doing business, and the costs awards for eligible claimants are not a subsidy for Class Counsel for other clients.

[22] For these reasons, while we approve two requests for revisions to the DIIP, we do not approve the request to remove the $6,000 cap on the costs for Track 2 claims.

Order

[23] Order accordingly.

Masse, J. Perell, J.

Released: January 4, 2024

Footnotes

[1] S.O. 1992, c. 6. [2] CQLR, c. C-25.01. [3] C.S.Q Court File No.: 500-06-000781-167.