Law Times

PAGE 14 FOCUS OctOber 6/13, 2008 • Law times he tale of Joseph Fantl v. Transamerica Life Canada — that has policyholders looking for their money back — has taken an- other twist, as the company has announced the appointment of a new president and CEO. In what AEGON, the parent company of the insurer and in- vestment provider, refers to as a "strategic refocus of its Canadian business," Douglas W. Brooks has been named the successor to Paul Reaburn. Reaburn has been relo- cated to work with developing the company's Asian-Pacific market. Reaburn's reign over the com- pany saw the beginnings of liti- gation; a proposed class action lawsuit alleging excess manage- ment fees to policyholders, over and above those permitted by their contracts or originally rep- resented by the company. Is Transamerica litigation ending in settlement? T BY JEFFREY WAUGH Law Times Last month the company ad- mitted to the overcharges and reached an agreement in principle to settle the matter. In a statement issued at the time, Reaburn, who was then president, said, "We look forward to completing our ne- gotiation with REO [Roy Elliott O'Connor LLP], obtaining court approval of our settlement, and to seeing our policyholders compen- sated fairly for any past overcharges which we regret occurred." The affected policyholders are still waiting to see their man- agement fees reset to the con- tractually permitted levels. The company is anticipating making the change in mid-November. One highlight of the proposed settlement is that Transamerica has agreed to pay the legal fees and dis- bursements, meaning the money issued to policyholders will not be reduced by having to pay the legal bill. At this point there is no word on what individual policyholders, of which there are over 100,000 across the country, will receive. As for when the settlement and restitution to policyholders will actually happen, court approval is still necessary. The final part of the proceedings — the fairness hear- ing — is tentatively scheduled for the end of April 2009. This won't be the first time the matter has seen the inside of a courtroom though. In April, Joseph Fantl, who represents the plaintiffs in the pro- posed class, served notice that he was changing solicitors. The re- sponse from the outgoing firm in- volved what Justice Paul M. Perell described in his judgment as, "The rarest oddity of a lawyer moving to disqualify his own client as a party on procedural grounds." Originally, Fantl was represent- ed by Roy Elliott Kim O'Connor LLP. Won Kim was the supervising lawyer on the matter, and Peter Roy was a close friend of their client, Fantl. The firm disbanded, put- ting the two lawyers into separate firms — Roy Elliott O'Connor LLP, and Kim Orr Barristers PC. Not surprisingly, Fantl quickly served notice to have the matter transferred to his friend's new firm. Kim Orr Barristers responded with a motion to set aside the notice and have Fantl replaced by two new po- tential class representatives. The resulting judgment pro- vides insight into the role plaintiffs and litigators proposing to repre- sent a class must keep in mind. Class action litigation differs from a typical action in that there's a risk to the absent class members being represented, said the court. The representative plaintiff has the added responsibility of acting in a fashion that properly reflects the status of other claimants. The original firm submitted the change would be to the detri- ment of the class, suggesting Fantl switched firms solely on the basis of his friendship with counsel. Perell gave the relationship little weight in deciding the mat- ter though, commenting that Mr. Fantl's attendance as best man at Mr. Roy's wedding "is an example of an irrelevant fact that ultimately only adds some colour and interest to the factual background." The court said the test for set- ting aside such a motion would be difficult to pass. But it was agreed "the adequacy of the representa- tion of the representative plaintiff is directly connected to his or her choice of counsel," it did not follow that the lawyer selected must be in some way superior to the other. Fantl's selection may have re- sulted in having his friend for representation, but the facts didn't make out that such a choice would pass the test for setting aside the notice. Only when it can be shown the lawyer selected is inad- equate will the motion be consid- ered, said the ruling, on a standard of competency and adequacy. Transamerica itself is still open to challenging the competency of the plaintiff's lawyer through s. 5 of the Class Proceedings Act, as the certification process has not yet been finalized. It will be part of the preliminary court proceed- ings tentatively scheduled for late November in Toronto. But such a challenge would be unlikely, given the company's admission and the willingness of both sides to have the proposed settlement reach a final ending. Fantl expressed his desire to have the matter finalized, saying, "I am pleased that Transamerica is endeavouring to resolve this claim without the need for a trial." LT ThorntonGroutFinnigan LLP ("TGF") is pleased to announce that Michael E. Barrack has joined the fi rm as a partner in its litigation practice effective October 1, 2008. Recognized across Canada and internationally as a top litigator, Mr. Barrack enjoys a broad and successful practice. The 2008 Canadian Legal Lexpert Directory lists Michael in eight litigation categories – Corporate Commercial, Securities, Class Actions, Insolvency and Financial Restructuring, Directors and Offi cers Liability, International Commercial Arbitration, Corporate Tax and Medical Negligence. He has appeared in a full range of matters throughout Canada, including trials, arbitrations, mediations and appeals before both federal and provincial courts across the country including the Supreme Court of Canada. In addition, he has appeared in England at the London Court of International Arbitration. Recently he acted as lead counsel to Stelco during its contentious restructuring proceedings that involved over 60 court appearances. Mr. Barrack is past president of The Advocates' Society, a former founding director of Pro Bono Law Ontario and a member of the Supreme Court Institute. He received a B.Comm from the University of Toronto in 1977, his LLB from Osgoode Hall Law School in 1980 and was called to the Ontario bar in 1982. Mr. Barrack joins TGF from McCarthy Tétrault where he was a partner in the Toronto offi ce and a prominent member of the litigation group. ThorntonGroutFinnigan is celebrating its 10th anniversary. Firmly established as a leading restructuring fi rm, including major mandates in matters such as Air Canada, Stelco and Hollinger, the litigators at the fi rm have also played leading roles in many recent cutting edge and high profi le cases including representing a successful group of bondholders in the Calpine restructuring, representing the Receivers in the Portus and Norshield hedge fund scandals and most recently, representing a blue chip group of institutional bondholders before three levels of Court including the Supreme Court of Canada in the BCE privatization proceeding. Thornton_LT_Oct6_08.indd 1 THE RESTRUCTURING & LITIGATION BOUTIQUE www.lawtimesnews.com www.tgf.ca 10/1/08 5:18:57 PM

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