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April 4, 2011

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Subscribe to Law Times And receive: • Unlimited access to the Law Times digital editions and to our digital edition archives...FREE • Canadian Legal Newswire, a weekly e-newsletter from the editors of Law Times and Canadian Lawyer...FREE Billions of dollars invested, not a penny lost. earlug.indd 1 $4.00 • Vol. 22, No. 12 11/10/09 11:20:32 AM Inside This Issue 3 Helping Hands Covering Ontario's Legal Scene ntitled-3 1 April 4, 2011 5/4/10 2:49:21 PM Firms denied fee boost Class counsel wanted $20M, appeal court gives $14.5M BY MICHAEL McKIERNAN Law Times 7 T Handcuffed Courts 8 Focus On ADR/Mediation Quote of the week "People do act on stories, seeing who the villains and victims are. The mediator looks for opportunities to shake that story with information that is an exception to their view." — Daryl Landau, president of Common Ground Organizational Solutions, See Advocates, page 9 he Ontario Court of Appeal has de- nied a request by four law fi rms to boost their legal fees for settling a class action lawsuit on behalf of payday loan customers who alleged they were charged criminal rates of interest. Class counsel at Sutts Strosberg LLP, Heenan Blaikie LLP, Stikeman Elliott LLP, and Paliare Roland Rosenberg Rothstein LLP originally asked for $27.5 million, the entire cash portion of the settlement reached with the defendants National Money Mart Co. and Dollar Finan- cial Group Inc. Th at demand was reduced to $20 million on appeal, but the three-member appeal court panel upheld the original judge's award of $14.5 million. Th e award included $1 million for dis- bursements and $650,000 for GST. Having docketed nearly $10 million worth of time, the fi rms argued the $3-million premium was unreasonably low considering the risk they had taken in advancing the case and the suc- cess they had achieved. "I'm disappointed with the result," says Ter- rence O'Sullivan of Lax O'Sullivan Scott Lisus LLP. He represented the fi rms in the appeal. A settlement resulted in 2009 follow- ing a mid-trial mediation. In addition to the $27.5-million cash payment, the defendants agreed to forgive $60 million in debts owed by the class. A further $30 million of transferable credits were awarded to reduce the future costs of class members using payday loan services. As it was "to spin a silk purse from a sow's ear to suggest that the result was excellent." Perell pointed out that class counsel them- selves would be unlikely to accept payment in payday loan credits that could be viewed as "a business promotion scheme" because they'd need to repeatedly use Money Mart services in order to exhaust them. Th ere was a cap on the credits at $5 per transaction. Th ose com- ments formed part of his arguments that the settlement wasn't such a great deal after all. Writing for the appeal court in its March 28 decision, Justice Russell Juriansz said Perell was within his rights to question the valuation and make his own determination. "Th e motion judge's determination was discretionary. Th e appellants have not established any basis for interfering with his determination that $14.5 million was a fair and reasonable fee for class counsel in this case." Th e court also upheld Perell's refusal to The original judge, Justice Paul Perell, disputed assertions that the settlement was excellent. well, the defendants promised to pay $3 mil- lion to the Law Foundation of Ontario's class proceedings fund. Class counsel valued the settlement at $120 million, but the original judge, Superior Court Justice Paul Perell, disputed that. Describing the result as "adequate or satisfactory," he said award key non-legal service providers a pre- mium for work they did on a contingency basis. In this case, class counsel retained Price- waterhouseCoopers, which docketed more than $800,000 in time and resources to study 400,000 fi nancial transactions. Perell decided to treat the dockets as disbursements for that amount rather than factoring in the premium counsel had agreed to pay them in the event the plaintiff s were successful. O'Sullivan says that aspect could have se- rious consequences for access to justice, a key plank of the Class Proceedings Act. "I think it's easy to predict that service providers will be See Contingencies, page 5 Associate sues Mathews Dinsdale for $1.3M BY MICHAEL McKIERNAN Law Times E mployment law boutique Mathews Dinsdale & Clark LLP is facing a $1.3-mil- lion wrongful dismissal suit from a former associate as the fallout con- tinues from a party more than two years ago and as the partner at the centre of it all leaves the fi rm. Adrian Jakibchuk launched the action just as former Mathews Dinsdale partner David Cowling agreed to drop his own defamation suit stemming from allegations of harassment and inappropriate sex- ual conduct at Toronto nightclub Cheval in 2009. Cowling resigned from the partnership last week. Jakibchuk, who was in his fourth year as an associate at Mathews Dinsdale, was a defendant in Cowling's defamation suit along with another associate, Sarah Diebel, a second-year lawyer. Cowling, a married father of three young children, sued them for $2.3 million in March 2010. He alleged intentional interference with economic relations when they spoke to partners about his behav- iour and claimed their statements were false and "maliciously and de- liberately designed to cause signifi - cant injury to the plaintiff 's profes- sional and personal reputation." Diebel left Mathews Dins- dale in June 2009. But Jakibchuk was served with the lawsuit at Mathews Dinsdale's offi ce, where he still worked. Two months later, Jakibchuk left the fi rm. In his statement of claim fi led last week, he alleges partners at the fi rm refused to as- sign him new work, retrieved some fi les already assigned to him, and stopped socializing with him after the launch of the defamation ac- tion, all of which created a "hostile and poisoned work environment." Both Jakibchuk and Diebel denied defaming Cowling. None of the allegations in Jakibchuk's lawsuit have been proven in court. "Th is has been an extremely dif- fi cult and stressful experience for my client to be sued by a partner in the fi rm," says Jakibchuk's law- yer, Paul Schabas of Blake Cassels & Graydon LLP. "He was then un- employed for a signifi cant period of time. It was a very diffi cult thing to have to go through, especially at an early stage of your career." Jakibchuk was unemployed until November 2010, when he joined Sherrard Kuzz LLP, another employment law fi rm with its own connection to Mathews Dinsdale. Co-founder Erin Kuzz left an asso- ciate position at Mathews Dinsdale to start the fi rm in 2001. Terrence O'Sullivan, who rep- resents Mathews Dinsdale, says the fi rm intends to defend against Jakibchuk's claim in the near fu- ture. "All I'm able to say at the present time is that the fi rm be- lieves totally and unequivocally that the claim is without merit," says O'Sullivan, a partner at Lax O'Sullivan Scott Lisus LLP. Th e saga dates back to January 2009 at the time of Mathews Dinsdale's annual labour See Jakibchuk, page 5 416-487-4447 • Gold Standard Mediators ADR-banner_LT_Apr4_11.indd 1 3/29/11 10:48:55 AM Arbitrators LT Digital version.indd 1 ADR Connect Find an ADR Professional 6/25/10 12:59:47 PM Click here to subscribe today to LAW TIMES Includes a FREE digital edition! Go to: w w w .d a r o n ta r i.a c o / fi n d a p r o .f cm File photo

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