Law Times

LaW TIMeS • NOVeMBeR 30, 2015 Page 3 www.lawtimesnews.com class actions in Alberta and Sas- katchewan," but it did not serve the best interests of the class mem- bers and undermines the integrity of the class action regime. In pointed words, he said it was time to "stop blaming the Canadi- an Constitution, which creates a federation of jurisdictions, for the so-called jurisdictional problems of national class actions. "There are already in place the legal tools necessary to stop the multi-jurisdictional tactics of law firms that get in the way of access to justice, behaviour modifica- tion, and judicial economy for Canadian citizens." Strosberg says the decision has the potential to create a huge im- pact in terms of how class counsel deals with similar fee arrange- ments and carriage battles. "This is not something Camp Matthews should be criticized for," he says. "These types of ar- rangements have been entered into by virtually every class coun- sel firm in the country, but the ruling is a great excuse why we can't do it anymore. Justice Per- ell is giving us the ammunition we need in order to confront the problem of multi-jurisdictional filings in the same case." In Kutlu, Perell was dealing with an interlocutory motion in which the plaintiff counsel, Kim Orr Barristers, sought a manda- tory injunction with respect to activities by Trilogy Class Action Services, which was appointed ad- ministrator in Alberta's Kohler v. Laboratorios Léon Farma SA. The motion also sought an injunction against MLG, class counsel in Kohler, and against the defendant Laboratorios, a defendant in both the certified Alberta Kohler ac- tion and the Ontario Kutlu action. The courts in Alberta certi- fied an expanded definition of the class in Alberta and extended an opt-out period to Nov. 30. It allowed class members who had opted out to revoke that choice and re-enter the claim process. Perell dismissed the motions and said the Alberta court's de- cision to revoke opt-outs was a source of "grief, bad optics, and acrimony between the law firms acting for the parties in the On- tario [Kutlu] action." Perell explained in his ruling that the grief came about when Trilogy vetted a letter to class members with MLG and with the lawyers acting for Laborato- rios. That letter, drafted by Casey Churko of MLG, was to provide notice of class action certifica- tion and settlement to the mem- bers and contained a passage that stated Trilogy had received enclosed opt-out forms, and if the members were unaware that the opt-out form was submitted on their behalf, to contact Trilogy immediately. Perell said the passage about opt-out forms ". . . suggests to the recipient of the letter that his or her lawyer was acting without in- structions or improperly in deliv- ering the enclosed opt-out notice. "Further, in the now-known circumstances of the drafting of this letter, there is a smell of am- bulance chasing by the Merchant Law Group to preserve the class size of the Alberta action and to defeat its rival Kim Orr. And for any defendant to have a substan- tive role in the opt-out process has bad optics," Perell wrote. In the absence of a national re- gime, Strosberg says there are two ways defendants can assist with the process in order to achieve some sort of efficiency. First, defendants can attempt to co-ordinate with the plaintiffs the prosecution of the actions in multiple jurisdictions with over- sight of the judges in each juris- diction. Second, he says that, when appropriate, the defence should settle its matters with a singular, well-versed class counsel who has pushed the case forward in one province, then combine with class counsel to move for competing actions in other provincial juris- dictions to be dismissed once the settlement is approved. In the Sony matter, MLG suc- cessfully argued on behalf of a group of about 400 customers who had purchased PlayStation 4 video game controllers that de- teriorated prematurely. Belobaba ruled each member would share in an $8,000 settlement and he or- dered Sony to pay MLG $30,000 in legal costs. In awarding the fees, however, Belobaba chided MLG for its ar- rangements with the class mem- bers. He said, much to his sur- prise, there was no written retain- er agreement, the class was not obliged to pay fees or costs what- soever, and that MLG intended to recover legal fees from Sony. "MLG said it currently has similar arrangements in 'many' of their class actions," Perell wrote. "I must confess that I was somewhat shocked to hear this." He said that type of settle- ment-driven fee arrangement is "fundamentally and profoundly unacceptable" because it discour- ages maximum commitment on behalf of the class. "The MLG arrangement will no doubt work for the defendant who is shrewd enough to nego- tiate a small settlement amount coupled with an attractive legal fees payment to class counsel, and still come out ahead," Perell wrote in his decision. "Their legal counsel is not only motivated to negotiate a settlement in almost any amount, his or her very in- volvement in the negotiation with the defendant creates a glaring conf lict of interest because every dollar that can be deducted from the class members' settlement amount is a dollar that can poten- tially be added to class counsel's legal fees amount." Robert Gain, of Koskie Min- sky LLP, says judges are right to be concerned when any firm or law- yer has a practice of not entering into written retainer agreements, or is involved in "any other con- duct that calls into question where a class counsel's interests truly lie." "Transparency with the rep- resentative plaintiff, transpar- ency with the court on these is- sues are not best practices, they are requirements and hallmarks that must be unscrupulously en- dorsed," Gain says. Although they did not return requests for comment by press time, MLG's Churko was quoted as saying in a Nov. 17 article by the Financial Post: "On the Sony PlayStation class action, Merchant Law Group LLP incurred fees in excess of $200,000. We got the class 100 per cent of their money back, and didn't ask for a single dime from them to do it. Whether we recovered $8,000, $8 million or 8 cents, that's the price of jus- tice, and it's still cheaper than the societal costs of leaving people who were wronged without a remedy." LT preservation of evidence that has nothing whatsoev- er to do with the suspect's identifying characteristics," wrote McGuire. Both the Alberta and Ontario Crowns also com- pare the issue to the Supreme Court's decision last year in R. v. Fearon, where the majority found that a warrant is not always required to search a suspect's smartphone incident to arrest. "Balanced against the significant bodily privacy in penis swabbing cases is a strong law enforcement interest in obtaining real evidence of serious crime," wrote Ontario Crown at- torneys Susan Magotiaux and Melissa Adams. Edmonton defence lawyer Peter Royal, who is representing Saeed, is asking the Supreme Court to find that a warrant is required and its decision in R. v. Stillman is the governing authority for penile swabs. "What matters is the body part that is being searched and not necessarily what is being searched for," wrote Royal. Julian Roy, a Toronto lawyer who represented one of the interveners at the Supreme Court in Golden, says that if the Crown's position is correct, then there is a higher legal test to swab the inside of an individu- al's cheek than there is for a genital swab. "The problem with common law powers [for police] is they lack the level of definition that is re- quired," says Roy, a lawyer at Falconers LLP, who has represented clients in numerous civil proceedings and inquests involving alleged state misconduct. The Supreme Court tried to set out ground rules in Golden, yet since its decision in that case, "strip searches have become more and more routine," Roy points out. A non-consensual genital swab "is highly intrusive" and he says it could also become much more common if the Supreme Court does not im- pose restrictions. "Giving police these powers would likely have a disproportionate impact on racialized groups," sug- gests Roy, given the past examples of racial profiling in the province and other parts of Canada. Whether this is a necessary tool to preserve evi- dence without attempting to obtain a warrant is something that should be decided by Parliament, adds Roy, who agrees with the position of the Crimi- nal Lawyers' Association (CLA). "Courts should not be ad-libbing," without a full evidentiary record, he says. The defence lawyers' organization is also an inter- vener in Saeed and it argues that "respect for Charter values" is just one of a number of reasons why this should not be recognized as a common law police power. "The issue here is not when police should be permitted to forcibly swab a detainee's genitals but whether that power should exist at all," wrote How- ard Krongold, a partner at Abergel Goldstein & Part- ners LLP and Vanessa MacDonnell, a law professor at the University of Ottawa, on behalf of the CLA. "Courts should not pre-empt the democratic pro- cess by making significant changes to the law that Parliament might not find to be justified," they wrote. The lawyers' organization also warns that there may be "third-party" privacy interests at stake, de- pending on what DNA evidence is obtained, and that the court should consider this in its analysis. LT NEWS New Edition Ontario Municipal Law: A User's Manual 2016 George Rust-D'Eye, Ophir Bar-Moshe, and Andrew James For many years, Ontario municipalities, municipal officers and lawyers have relied on annual editions of Ontario Municipal Law: A User's Manual for answers to complex issues. 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