Law Times

Law Times • January 12, 2015 Page 5 www.lawtimesnews.com Class action lawyers hoping for clarity on carriage Barrick Gold ruling headed to Divisional Court after losing firms granted leave By MiChAel McKierNAN For Law Times lass action lawyers are hoping the Division- al Court will bring some much-needed clarity to carriage motions af- ter it agreed to a hearing on the tightly contested battle to lead the multibillion-dollar claim against Barrick Gold Corp. On Dec. 11, Ontario Superior Court Justice Edward Belobaba awarded carriage of the Barrick class action to a group of law firms led by Toronto's Rochon Genova LLP and also including Rosen Naster LLP and Saskatchewan- based Merchant Law Group. However, just 12 days later on Dec. 23, Ontario Superior Court Justice Ian Nordheimer granted the losing coalition of law firms leave to appeal Belobaba's deci- sion at the Divisional Court. That group consists of four more class action heavyweights: Koskie Minsky LLP, Sutts Strosberg LLP, Siskinds LLP, and Groia & Co. Barrick faced a host of claims in the United States and Canada after publicly announcing lo- cal courts had suspended its Pascua-Lama mining project in Chile in April 2013, a move that precipitated a dramatic drop in the company's share price. In his ruling, Belobaba said it "was not a difficult decision" to award carriage to the Rochon Genova group, noting it "clearly and decisively came out ahead" over its opponents in terms of both its theory of the case and its state of preparation. By pleading additional claims over the Koskie Minsky group, which opted for a more stream- lined case focused on environ- mental violations, Belobaba con- cluded the Rochon Genova group better favoured the interests of the class by not putting "all its eggs in" one basket. The judge also looked favourably on the advanced level of preparation by the Rochon Genova group that included a trip to Chile for meetings with poten- tial witnesses as well as govern- mental and legal officials. Within weeks, Nordheimer had granted the Koskie Minsky group leave to appeal after it con- vinced him there were "good rea- sons to doubt the correctness" of Belobaba's decision. In his decision, Nordheimer said Belobaba had "set up" an "as- serted conf lict" in previous case law centred on a judge's ability to assess a claim's likelihood of suc- cess when deciding a carriage mo- tion. "Assuming that this conf lict exists, it is important that it be resolved by the Divisional Court," wrote Nordheimer. He also raised concerns about the weight Belobaba gave to the relative experience of counsel in making his decision since it ac- knowledged the losing Koskie Minsky group had more experi- ence in securities class actions than the successful Rochon Genova team. Jim Orr, a co-founder of plain- tiff class action firm Kim Orr Barristers PC, says he's happy the Divisional Court will get a chance to f lesh out the rules for carriage motions considering the dearth of existing case law in the area. Hav- ing won and lost major carriage battles, he finds the unpredict- ability of the process frustrating. "From the perspective of coun- sel, I couldn't tell you who's going to win carriage, even in a case I have intimate knowledge of, un- til you tell me who the judge is. Some like a broader, more inclu- sive case and some like a more focused case. I have a great deal of sympathy for the judges because it puts them in a very difficult posi- tion where they're trying to assess things that courts don't normally want to get into, such as the com- petence of counsel and the mer- its of the claim. It's impossible to determine with any degree of ac- curacy which is the better case at a point when there is virtually no discovery or anything." David Klein, head of the class action group at Klein Lyons, agrees it's important to have a "clear understanding" of the fac- tors at play in a carriage motion "so we can govern ourselves ac- cordingly." "When you look at the amount of money the Rochon Genova group must have spent without even knowing if they have car- riage, that concerns me from an access to justice point of view. There are already very few plain- tiff class action firms because the barriers to entry are so high, and this certainly raises them even further," says Klein. Brian Radnoff, a partner in the Toronto office of Lerners LLP, says the trend of experienced class action law firms teaming up on specific claims makes appellate guidance all the more urgent. "Both sides really know what they are doing, which makes it very difficult to say that either one lacks expertise," he says. "These carriage battles are getting more common, so I'd say the more direction the courts can give, the better." Orr says he would like to see Canada look south to the United States for guidance on settling carriage of class actions. Courts there have developed a system for securities class actions in which they presumptively award carriage to the law firm acting for the representative plaintiff with the largest losses. "It doesn't have to be ironclad but generally it allows the market- place to decide who gets carriage rather than the judge," says Orr. A hearing has yet to be set for the Barrick carriage appeal, but Nordheimer suggested the pro- cess should move forward quick- ly. David Rosenfeld, a lawyer with Koskie Minsky involved in the case, says the firm was happy to get a full hearing for the appeal. "We certainly think there should be greater appellate direc- tion because there hasn't been a lot," he says. LT NEWS The 2015 Innovatio Awards is the pre-eminent award program recognizing innovation by members of the in-house bar within the Canadian legal market. These awards celebrate in-house counsel, both individuals and teams, who have found ways to show leadership by becoming more efficient, innovative and creative in meeting the needs of their organizations. The Innovatio awards program draws on a panel of in-house counsel judges to determine the winners, based on a range of criteria. For more information, please contact Jennifer Brown Email: jen.brown@thomsonreuters.com | Phone: 416-649-8867 THE SEARCH IS ON FOR CANADA'S MOST INNOVATIVE IN-HOUSE COUNSEL CANADIAN LAWYER INHOUSE INNOVATIO AWARD CATEGORIES: • Law department management • Diversity • Best practices in compliance systems • In-house M&A/Dealmakers • Working with external counsel • Litigation management • Risk management • Tomorrow's leader NOMINATIONS CLOSE FEBRUARY 16, 2015 To nominate in the categories listed below visit www.innovatio-awards.com Untitled-3 1 2015-01-06 9:01 AM C 'These carriage battles are getting more common, so I'd say the more direction the courts can give, the better,' says Brian Radnoff.

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