Law Times

lAw Times • April 6/13, 2009 FOCUS No deep freeze in Ontario Financing class actions and costs awards BY GRETCHEN DRUMMIE Law Times button on unnecessary steps in class action litigation, says a law- yer who works in the fi eld. And, while some have pre- dicted large costs awards could create a "chilling eff ect" on access to justice, there's no sign of a deep freeze in this province, says Adri- an Lang, a partner with the litiga- tion department in the Toronto offi ce of Stikeman Elliott LLP. In fact, instead she says there's been an increase in the speed with which class proceedings are commenced, and "the sophisti- cation of the plaintiff s' counsel syndicates which get formed." Whether it's because most H plaintiff s' counsel now routine- ly "indemnify representative plaintiff s from costs liability, or because the presence of the Class Proceedings Fund, class proceedings continue to fl our- ish despite the risk of a large costs award," says Lang. "If costs awards have a moderating eff ect on the general tempera- ture of class actions litigation, this is a welcome trend." Even though costs can be onerous — especially if the case is on a contingency basis — they're actually under control and not getting wildly out of whack, Lang tells Law Times. "I think probably the most recent developments in costs re- ally stem from the Kerr v. Danier Leather Inc. case, but for costs in class actions in general in Ontar- io, I don't think there's an increase in costs awards and I don't think there's a decrease," says Lang. "I think what we're seeing is that while in the early days there was more of an emphasis on the fact that this was a new breed of case that warranted special cost considerations, the courts are now willing to take a harder look at the underlying motions them- selves for which costs are sought and say, 'Is this an unusual mo- tion, forget that it's in the con- text of a class proceeding.' And if it's not, there are going to be the same costs consequences as any other kind of case." It's the "right approach," adds Lang who is defence counsel. "I think that we have a costs regime that is a loser pays regime and I do think that causes peo- ple to think before they start any litigation," she says. Lawyers counsel clients that they can start a proceeding, but tell them that, "'You have to keep in mind that if we bring a mo- tion that's unnecessary, or take an unnecessary step, you will have to pay not only your own costs you'll have to pay the other side's legal costs.' I wouldn't call it a chilling eff ect but I'd call it a sober second thought and I think that's a good thing in our system." Lang says the concern in ju- risdictions with a no-costs regime for class actions would be that you would have people "taking fl iers on cases knowing that they won't have to pay for costs for un- necessary steps in litigation so you www.lawtimesnews.com MacDonald_cross border litigation (LT 1-4x3).indd 1 4/1/09 10:11:40 AM aving a so-called loser pays costs system in On- tario has held the pause his or her own liability for costs and signifi cantly limit the likeli- hood that those with valid claims will stay home for fear of risking an adverse costs award." Meanwhile, Lang says, "if GEAR U P , DD LT QtrD-01 PrmoGlf ad 3/24/09 12:00 PM Page 1 costs awards have a moderating eff ect on the general temperature of class actions litigation, this is a welcome trend." In fact, she adds that the courts should con- tinue to make adverse cost awards against unsuccessful representa- tive plaintiff s as they have not re- sulted in a chilling eff ect and "do not defeat the objectives of the Class Proceedings Act, but rather refl ect the risks involved in pur- LT G OLF SEA S ON IS dyedurham.ca 'If costs awards have a mod- erating effect on the general temperature of class actions litigation, this is a welcome trend,' says Adrian Lang. would be faced with an increase in both unnecessary actions and steps in actions. . . . Now whether that's actually borne out or not, I don't know, but I believe that in Ontario certainly the costs regime has created more of a pause on unnecessary steps on both sides of the case both defence and plain- tiff s." As for access to justice, Lang doesn't think the prospect of costs is aff ecting the issue, mainly because "we have a very healthy plaintiff s' counsel bar here and so we don't see a lot of really frivo- lous actions here. I think plain- tiff s' counsel think quite carefully about the cases that they do bring because they are often doing them on contingency and they've usually indemnifi ed the plaintiff s and so they themselves are careful about the cases they bring." She notes that access to jus- tice is also paved in this prov- ince with the Class Proceedings Fund. Under the fund, a rep- resentative plaintiff can apply for funding for disbursements to insulate themselves from an adverse costs award, she says. When the application is ac- cepted, the defendant's claim for costs is against the fund rather than the representative plaintiff . In exchange, the recipients must repay amounts received and give the fund a 10-per-cent share of an award or settlement. Because the fund indemnifi es the plaintiff s' counsel entirely for the disbursements, they are protected. Lang says indemnifi cation against potential adverse awards removes a barrier, and a favourable result allows a plaintiff to "predict Phone: 1-888-393-3874 Fax: 1-800-263-2772 DESCRIPTION TITLEIST PROV1* TITLEIST PROV1X* TITLEIST NXT EXTREME PINNACLE LADY WHITE 15'S CALLAWAY HX TOUR I/IX NIKE ONE TOUR/TOUR D WILSON HOPE - CLEAR DOZEN WILSON ULTIMATE DISTANCE 15 PK 2 009 G O LF B ALL P R I C E LI ST 12-47 dz $59.25 $59.25 $33.35 $24.10 $56.60 $59.05 $18.50 $17.15 48-95 dz $56.80 $56.80 $30.85 $20.40 $55.40 $58.75 $18.10 $16.75 96-143 dz H ER E! PAGE 11 144+ dz $51.60 $55.70 $16.45 $15.60 $49.45 $53.50 Gear up with the perfect promotional item this season! Visit dyedurham.ca for complete details. 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• Cover
• Family Court Warning
• The Dirt
• Focus On Class Actions