Law Times - sample

Law Times • march 19, 2018 Page 3 www.lawtimesnews.com Judge calls for independent counsel in carriage fights BY ALEX ROBINSON Law Times A n Ontario judge has called for law firms competing for car- riage of class action lawsuits to hire independent counsel to argue their case in or- der to do away with a practice he calls the "blood sport of lawyer- bashing." In Quenneville v. Audi AG, Ontario Superior Court Justice Paul Perell awarded carriage to Strosberg Sasso Sutts LLP and Harrison Pensa LLP in a pro- posed class action against Ger- man car manufacturers, which allegedly collaborated like a mo- nopoly on a number of aspects including design and marketing so that they could charge higher prices. Perell took the opportunity in his decision to comment on how carriage battles can ref lect poorly on the public's perception of the class action plaintiff bar and offered a number of sugges- tions on how such motions can be made better — starting with the retaining of independent counsel. "Unfortunately, it has be- come conventional in a carriage motion for the rival class counsel to extol their virtues and to bad- mouth their rival," he said in the decision. ". . . In the future, I sug- gest that a law firm seeking car- riage should hire independent counsel to argue the motion and thus introduce an element or at least the appearance of some ob- jectivity." Lawyers say Perell's commen- tary raises an important point about how detrimental carriage battles can be to the public's view of class actions. Shantona Chaudhury, a part- ner with Pape Barristers PC, says carriage fights can get fairly ugly, as lawyers are put in the position of having to prove they are better than competing counsel. Things can get particularly nasty if they represent themselves, she says. "They essentially turn into self-represented litigants, which makes it very difficult to argue objectively and it makes it an un- pleasant exercise for the court," says Chaudhury, who was not involved in the case. Counsel representing them- selves in carriage battles will laud their own virtues and criti- cize competing counsel, which Chaudhury says is generally something lawyers should avoid in litigation. Conversely, lawyers say it makes sense for class counsel to argue such motions, as they have done all the preparation work and have developed the case theory. Peter Jervis, senior coun- sel with Rochon Genova LLP, says that independent counsel should be hired if there is a ques- tion of appropriateness of class counsel, but if the factors at issue solely concern the theory of the case, it is not practical to bring in external counsel. "The idea that you're going to have to hire an independent counsel to stand up and articu- late that, who isn't going to have done all that work and simply isn't the best person to describe it, I don't agree," says Jervis, who was not involved in the case. In the case at hand, two com- peting sets of lawyers sought carriage over the matter. One side, called the Quenneville action, was made up of Harrison Pensa LLP and Strosberg Sasso Sutts. The other proposed class counsel — for the Stibbe action — were Koskie Minsky LLP, Paliare Roland Rosenberg Roth- stein LLP and Siskinds LLP. As the lawyers failed to reach a consortium agreement, both filed a carriage motion and nei- ther hired independent counsel. Jay Strosberg of Strosberg Sasso Sutts LLP says his firm has retained external counsel in the past to argue such motions, but it did not think it would be necessary in the Quenneville matter. He says his firm was very careful not to criticize its com- petitors. Perell found that both actions presented viable case theories and litigation plans and that neither counsel had scored a "knockout blow" on any of the factors considered in such a mo- tion but that the Quenneville action's litigation plan and case theory were slightly better. Perell said the factor of case theory is critical in determining who should win carriage, but he pointed out that it is nearly pos- sible for competing counsel to be objective in their submissions on this. He noted that competing counsel "refuse to listen to one another, else listening be seen as a sign of weakness." The class counsel for the Stib- be action argued the case theory for the Quenneville action was "unfocused, speculative, untest- ed, expensive and risky." They also said the action "becomes unhinged" by the allegations that the car manufacturers oper- ated as one company and collud- ed on development, managing market share and brand prices. Stibbe class counsel con- tended that part of the Quenne- ville claim was also not "legally or factually viable." The Quenneville class coun- sel responded to this by "quite sarcastically" describing their counterpart's case theory as "just conventional price-fixing theory that totally misses the target and does not fit the factual footprint of the actual events." Stibbe class counsel in turn said this criti- cism was mistaken and ignorant and that their case theory was demonstrably superior. Perell found that both case theories were more than ad- equate and that determining the winner on this point was a "photo finish" but that the Quenneville action was more creative and developed. The judge declined to con- sider the qualifications and the differences in experience of competing class counsel, saying that the factor has become dys- functional. "A carriage motion is not to be a 'beauty pageant,' and usual- ly the resources and experience of counsel will be neutral and unhelpful to the carriage de- termination because any of the law firms could represent class members in the proposed class action," he wrote. Perell found that this should not be made an issue in future carriage motions and that the court should not be put in the position of grading lawyers. He suggested that counsel include the law firm's brochure and the "short curriculums vitae" of the lawyers involved but nothing else unless the lawyers' qualifi- cations are challenged. "The court just doesn't want to hear these self-serving state- ments about how great all the lawyers are," says Strosberg. "Instead, the focus should be on your legal theory and what work you have done to advance the case in the class' interest." Perell noted that there are exceptions, such as in Agnew-Americano v. Equifax Canada, in which the court found there really was a dis- crepancy. Perell found that such a difference should not be ig- nored, but this would be the ex- ception rather than the rule. Perell also found that carriage motions are sometimes neces- sary and that they should not be discouraged, but that they should be argued on a narrow set of factors. This is because carriage bat- tles are often beneficial to de- fendants as they expose plaintiff counsel's strategy, lawyers say. So they should be kept as narrow as possible so that they will not jeopardize the plaintiff 's case going forward by giving defend- ants an unfair advantage. Chaudhury says there have been two competing approach- es as to whether the case theory should be narrow as to make it easily certifiable or whether it should be broadened and in- clude more claims that might complicate the litigation. In this case, Perell chose the broader and more complex action. The Quenneville action included a claim concerning s. 52 of the Competition Act, which bars the use of a product for the purpose of "promoting, directly or indirectly, any busi- ness interest" to the public that is false or misleading. Perell determined that the action provides an opportun- ity to test the extent to which s. 52 is relevant to a case about the movement from innocent co-operation to culpable con- spiracy. Regardless of whether this part of the claim fails, Perell said it would add to the case law in the competition class law area. Charles Wright, a partner at Siskinds LLP, says carriage mo- tions are an unfortunate use of resources, in which plaintiffs are effectively litigating against each other instead of the defendants. But he says that having large consortiums of law firms work- ing together on cases just be- cause they have all filed actions is also not the most efficient dy- namic. "Until somebody comes up with some better solution, I think we're going to keep seeing carriage battles," he says. Wright adds that the list of factors judges can consider in carriage battles is lengthy, and that different judges focus on different points. This has led to great uncertainty in how dif- ferent judges will approach car- riage motions, he says. Lawyers from Paliare Roland Rosenberg Rothstein LLP and Koskie Minsky LLP were not available to comment at press time. LT NEWS Shantona Chaudhury says carriage battles can get fairly ugly, as lawyers are put in the position of having to prove they are better than competing counsel. ONTARIO LAWYER'S PHONE BOOK 2018 Ontario Lawyer's Phone Book is your best connection to legal services in Ontario with more than 1,400 pages of essential legal references. You can depend on the accuracy of this trusted directory that includes the most up-to-date names, phone numbers, mailing addresses and emails so you don't have to search anywhere else. 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