Law Times

lAw Times • April 16, 2012 Early resolution a developing area for class actions Mary Carter, Pierringer agreements among options for tackling the issues FOCUS A BY JULIUS MELNITZER For Law Times early resolution becomes more effective as a cost- and time-sav- ing alternative. "The stakes are so high in many s Canadian class actions mature and their stra- tegic focus shifts from certification to trial, gation partner at Osler Hoskin & Harcourt LLP. "But in some cases, thinking that way passes up an opportunity for early settlement." A recent ruling by Ontario " says Sonia Bjorkquist, a liti- Superior Court Justice Paul Perell that required the delivery of pre- liminary defence pleadings before certification compounds the prob- lem. "Delivering pleadings before certification may remove some of the complexities of certification but it loads up the costs at the front end and may require even more litiga- tion before the certification motion than we have today, able added value by understand- ing what a case is worth, what the plaintiffs are looking for, and using creativity to achieve results earlier rather than later. "Counsel can provide consider- to trial and appeal, the uncertain- ties of an all-out battle mount. "Take, for example, the Inco As well, with more cases going " environmental litigation where the plaintiffs had a huge victory at trial and a total loss on appeal, says Bjorkquist. "That's the type of " thing that makes it incumbent on counsel to take a good hard look at settlement." The current focus of defence counsel tends to be on narrowing the class and the issues and defeat- ing certification at the expense of settlement efforts. "Part of that is because counsel " says Bjorkquist. allel litigation happening in other jurisdictions. "Internal claims resolu- especially when there's par- of these cases that people think the only resolution is an all-out battle, tion procedures are particu- larly important in terms of litigation readiness and also because they are ways of avoiding lawsuits by dealing with issues early on, perhaps by way of product replace- ment or a recall program." Timing can also be criti- cal in planning early resolu- tion strategies because there are certain points in class action proceedings where costs increase and can drive counsel' generally anticipate that class counsel will have to ramp up their investment before haps production, before com- mon issues discoveries, and before trial, certification, per- before document Gomery of Norton Rose Canada LLP, counsel need to be more cre- ative about the way in which they test the viability of certain claims. " According to Sally " says Bjorkquist. Arbitration or neutral evaluation might work in the same way they do in individual actions," she says. One of the difficulties with is early settlement techniques, such as mediation, have little precedent in the class action context. "Mediating class actions is not that certain be more difficult dealing with a representative plaintiff, there' no good reason why mediation shouldn't work. don't want to give good arguments away or because they don't feel they have enough information, but there are ways around these issues, like arranging for an early exchange of documents," Bjorkquist notes. At same time, using good out spending a lot of money on motions doesn't mean that they won't remain relevant if resolution efforts fail. As Bjorkquist sees it, the defence bar's considerations should include arguments counsel intended to bring up in court in order to get an acceptable settlement with- internal claims resolution; the opportunity for alternative dispute mechanisms; options for claims- based settlements; non-cash con- siderations such as product or coupons; and managing the tim- ing and implications of settlement, parties can also change track and try to resolve the scope of the cer- tification hearing. "We're operating in an environment where everyone knows that certain cases will be certified and in such cases it' If mediating a settlement fails, " ter to move on to narrowing the issues," says Bjorkquist. "So instead of launching into a s bet- motion to strike where settlement efforts fail, it might be better to try to agree with class counsel on dropping weaker causes of action and refining viable causes." Gomery is of similar mind. "The principles of certification Apart from the fact that it may s "Defence counsel can s decision-making. but the possibility of early settlement," she says. Early settlement can particularly advanta- be geous in cases with multiple defendants, especially when their "There's a lot of value for a risk profiles differ. defendant in getting finality and knowing what the com- pany will have to contribute instead of being tied up for years," says Bjorkquist. Bjorkquist more creative uses of Mary Carter and Pierringer agree- ments in class actions could facilitate settlement. In the case of Mary agreements, a suggests Carter 'Mediating class actions is not yet within lawyers' comfort zone, but we are trying it in a couple of cases,' says Sonia Bjorkquist. from the moment they first meet with clients. "At the earliest possible defendant pays the plain- tiff a sum of money, which is plaintiff agrees to limit the exposure of a particu- lar defendant and contin- ue the action against the other parties. The settling moment, clients should explore not only the extent of the exposure of the outcome at trial. The set- tling defendant remains a party to the action and in some cases may even become an active proponent the maximum amount it'll have to pay regardless of the plaintiff 's case. proportionate-share agreement. Unlike in a Mary Carter scenario, the settling party under a Pierringer agreement withdraws from the liti- gation and leaves the remaining defendants responsible only for the loss they actually caused with no joint liability. "Each of these agreements has A Pierringer settlement is a innumerable complexities, but the point is that creative options are available that could result in cli- ents settling for more predictable amounts and perhaps even getting an early exit from the litigation," Bjorkquist says. "My sense is, however, that they have been used fairly sparingly in Ontario class actions to date. One is er, Deutsche Lufthansa AG and Swiss International Air Lines Ltd. approved by Superior Court Justice Lynne Leitch in the 2009 settlement in Nutech Brands Inc. v. Air Canada. The settlement agree- ment obliged Lufthansa to pro- vide assistance to the plaintiffs in the ongoing litigation against the remaining defendants. the agreement between exception, howev- " LT PAGE 9 TRUST yet within lawyers' comfort zone, but we are trying it in a couple of cases," Bjorkquist says. " you're putting your reputation on the line. It's all about trust well placed. DESMOND DIXON | DAVID NEILL | ALAN FARRER have been enunciated to the point that experienced counsel will have some idea of whether the plaintiffs can succeed, and frequently the key questions are the scope of the class and the viability of certain causes of action," she says. As Gomery sees it, early settle- ment should be in counsel's mind 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 ThomsonRogers_LT_Apr16_12.indd 1 www.lawtimesnews.com 12-04-11 9:29 AM

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