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October 3, 2011

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PAGE 12 FOCUS Money Mart decision members should be indepen- dently represented on fee ap- proval hearings. Indeed, the court went even further than that by inviting intervention from the Law Society of Up- per Canada on matters related to the interpretation of the relevant Rules of Professional Conduct. The issue arose in Smith v. Sutts Strosberg LLP, also known as Money Mart, in which class Eyebrows raised at ruling on fee representation E BY JULIUS MELNITZER For Law Times arlier this year, the On- tario Court of Appeal suggested that class counsel received only $14.5 million in fees and disburse- ments after having asked for $27.5 million from the mo- tions judge and $20 million from the Court of Appeal. Not everyone is happy about the prospect of independent representation for class mem- bers on fee approval hearings. "The settlement approval judges have demonstrated that they're very much up to the task of approving class coun- sel fees," says Barry Glaspell of Borden Ladner Gervais LLP, who practises class action law on the defence side. "While I agree that fee approval is a difficult task when there's an adversarial void in the absence of class representation, the ap- pointment of amicus curiae would add a new layer of con- flict to the proceedings and re- duce the award to the class be- cause the settlement guardian's fees would have to come out of the settlement." The Court of Appeal's judg- ment, the lawyer says, also leaves open the risk of under- mining the role of the class ac- tion judge and raises the issue of improper delegation. "The Class Proceedings Act is clear that the judge must approve the settlement," Glaspell says. Recruiting? Post your position on GREAT RATES. GREAT REACH. GREAT RESULTS. Contact Sandy Shutt at sandra.shutt@thomsonreuters.com for details. JobsInLaw 1/8 pg 3X.indd 1 2/15/11 4:22:11 PM "I can see where the judge might appoint someone to think about the true value of the settlement if that evidence isn't sufficiently forthcoming from counsel, or even to review the dockets, but if the appoint- ment goes beyond that, we could get into improper del- egation issues." Indeed, Glaspell believes these issues require a "more ful- some discussion" than the one emanating from Money Mart. Plaintiff lawyer Dimitri Las- caris of London, Ont.-based Siskinds LLP is somewhat more enthusiastic about the idea of separate representation for the class in fee-approval matters. "It's a sound idea if done with restraint," he says. "There have been concerns raised elsewhere, particularly in the U.S., about the real value of coupon settlements, especially where the cash com- ponent of the settlement goes largely to counsel." As Lascaris reads Money Mart, the Court of Appeal in- tended for the use of amicus curiae only in cases where the structure of the settlement de- manded more assurance than usual that it respected the in- terests of the class. "Money Mart involved a coupon settle- ment where a substantial por- tion of the settlement is paid in Independent representation for the class on fees is 'a sound idea if done with restraint,' says Dimitri Lascaris. transaction credits that reduce the cost of class members using the defendants' services in the future," he says. In the case of a pure cash arrangement where it's easy to calculate the fee's proportion to the settlement and there's an effective notice program, there's no reason to burden liti- gants with an additional layer of scrutiny, Lascaris argues. "The difficulty is that the lower courts may take a more expansive view," he says. "And that could lead to unnecessary expenditure of parties' and ju- dicial resources." 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