Law Times

lAw Times • April 11, 2011 FOCUS PAGE 23 Settlements not end of class matters Implementing agreements in lawsuits can take several years BY DARYL-LYNN CARLSON For Law Times to the individual plaintiff s in- volved as well as an undertak- ing by the company that it will abide by certain rules and im- plement corporate reforms to prevent further incidents that aff ected the class. Most class actions are in- A deed settled long before they go to trial simply because pro- ceedings can be prohibitively expensive for both parties. As well, it usually takes several years to reach the trial stage while the publicity surround- ing a class action lawsuit can detrimentally aff ect the defen- dant companies involved. Yet at the same time, the settlement proposed by the defendant in many cases is re- viewed by the courts and can take several years before it's implemented. For example, in the matter of Baker (Estate) v. Sony BMG Music (Canada) Inc., a pro- posed settlement of $45 mil- lion to be paid by Sony Music Entertainment Canada Inc., EMI Music Canada, Univer- sal Music Canada, and War- ner Music Canada was delayed late last month after the judge called an adjournment to ac- commodate a further review of the evidence. Th is comes as the case has languished for several years in the Ontario court. Lawyers note that it can in- deed take many months, even years, to have a proposed set- tlement approved by the court and implemented. "Any settlement in a class ac- tion is subject to the approval of settlement agreement in a class action can in- clude both a payment the court," notes Brian Shell of Shell Lawyers in Toronto. "In a class action, unlike a regular lawsuit, the lawyer is instructed by a class rep- resentative and is under the duty to consider the class as a whole. So before any settle- ment is reached, the judge wants to know why the class lawyer and representatives are recommending the settle- ment and hear from anyone opposing the settlement." Shell is currently repre- senting the 700 residents of an apartment building on Wellesley Street in Toronto who were displaced from their homes due to a fi re. Th e residents are pushing ahead with a class action that will move forward for certifi - cation in July. Shell says that while class actions are an eff ective re- course for plaintiff s to achieve an adequate compensatory pay- out, they often take some time. "Most people would say the process works, but it is very slow. If you've lost all of your possessions in a fi re and it takes 2 1/2 years to get compensa- tion, it is a long time to go without any money." As well, he says of the Welles- ley class action: "Th ere can be a certain frustration for those individuals who are fi nancially poor to begin with as the court is going at its own pace in the class action." Th e settlement agreement is also subject to revisions by both parties that can further prolong the process, he adds. Yet ultimately, most settle- ments are deemed to be fair and eff ective means of resolv- ing a class action lawsuit. Still, once a settlement is reached, the settlement in the event there's a national class. "Because all of the mem- bers of the class are provided notice, that takes some time, too," says Shell. "So it can be a long process." Dimitri Lascaris of Sis- kinds LLP in London, Ont., says that less than fi ve per cent of class actions reach the trial stage due to the oppor- tunity to settle. "It is extremely expensive, and by the time you get to trial, both sides will have in- vested many resources in the certifi cation process," he says. Most class actions are set- 'There are many good reasons to settle quickly,' says Dimitri Lascaris. there's another challenge in store: initiating contact with all of the prospective plaintiff s involved in a class action. Add- ing to that challenge is the fact that each province has diff er- ent laws that require plaintiff s to either opt in or opt out of tled before the certifi cation stage. Of course, if that doesn't happen, by the time the mat- ter surpasses the certifi cation stage, both parties have a solid idea of each other's position. "In that situation, the plaintiff s and lawyers would sit down and think very carefully about going to trial," Lascaris says. "I would say that most litigants opt not to roll the dice and choose certainty relative to the cost and would settle." He points to the Southwest- ern Resources Corp. matter, a class action initiated by his fi rm in 2007 that reached a settlement in 2009. Th e eff orts involved in implementing the settlement were signifi cant, he notes. For example, the fi rm had to publicize the settlement agree- ment and provide a claim form for plaintiff s to apply for their compensation or, alternatively, opt out of it. Any class action settlement also requires a court-approved administrator. In the case of the Southwestern matter, the administrator was Deloitte & Touche LLP. Lascaris says that in the Southwestern case, the company was strapped for cash and its di- rectors had very little errors and omissions insurance. As a result, it was important to facilitate the settlement expeditiously. As well, he notes that the age of the plaintiff group is also a consideration for counsel in terms of ensuring people can benefi t from the settlement. "Th ere are many good reasons to settle quickly," he says. TRUST you're putting your reputation on the line. It's all about trust well placed. ALEKS MLADENOVIC | RICHARD HALPERN | SLOAN MANDEL Since 1936 Thomson, Rogers has built a strong, trusting, and collegial relationship with hundreds of lawyers across the province. As a law firm specializing in civil litigation, we have a record of accomplishment second to none. With a group of 30 litigators and a support staff of over 100 people, we have the resources to achieve the best possible result for your client. Moreover, we are exceptionally fair when it comes to referral fees. We welcome the chance to speak or meet with you about any potential referral. We look forward to creating a solid relationship with you that will benefit the clients we serve. YOUR ADVANTAGE, in and out of the courtroom. TF: 1.888.223.0448 T: 416.868.3100 W: www.thomsonrogers.com Untitled-2 1www.lawtimesnews.com 4/6/11 2:31:49 PM

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