Law Times

Page 8 April 16, 2018 • lAw Times www.lawtimesnews.com Call for revamp of carriage motions BY MICHAEL MCKIERNAN For Law Times D efendants should be completely excluded from carriage motions as part of a broader overhaul to the process for se- lecting class counsel, according to one of the lawyers on the los- ing side of the recent bruising battle to prosecute a price ma- nipulation claim against a num- ber of German automakers. In Quenneville v. Audi AG, Ontario Superior Court Justice Paul Perell pointed out that one of the problems with carriage motions "is that defendants feast off them, and Class Counsel make arguments that at the cer- tification motion they will sub- mit are out of bounds." "That dysfunctional phe- nomena occurred in the case at bar," Perell added as he award- ed carriage to Harrison Pensa LLP and Strosberg Sasso Sutts LLP, shutting out a partnership among Koskie Minsky LLP, Pa- liare Roland Rosenberg Roth- stein LLP and Siskinds LLP in a "photo-finish" that the judge said left little to choose between the two proposed sets of class counsel. But Perell also lamented the current practice on carriage mo- tions, which he said turns them "into a blood sport of lawyer- bashing," as "gross and not help- ful." "Unfortunately, it has become conventional in a carriage mo- tion for the rival Class Counsel to extol their own virtues and to badmouth their rival," he added in his decision. "I think it would make sense to change the process for assign- ing carriage, whether it's done judicially or via a legislated fix," says Ren Bucholz, a lawyer with Toronto-based Paliare Roland Rosenberg Rothstein, who ap- peared on the motion. "One of the things we should consider is whether carriage mo- tions should be held in camera. I'm sure defendants would say it's a violation of the open court principle," he says. David Wingfield, a Toronto- based partner with Strosberg Sasso Sutts, who argued the case for the victorious consortium, agrees that carriage motions put prospective class counsel in an awkward position due to the presence of defendants. "If you have a motion that in- volves different views of the best approach, it's hard not to devel- op those arguments fully, but it has to be done in their full view," he says, adding that some defen- dants even like to participate in the carriage motion. For example, in the recent motion to decide carriage of the alleged bread price-fixing class action, also won by a group in- cluding Strosberg Sasso Sutts, the defendants expressed a pref- erence for the losing consortium, prompting Justice Ed Morgan to remark in David v. Loblaw; Breckon v. Loblaw that a "more cynical person might think that the Defendants simply prefer the more passive of the two compet- ing class counsel groups over the more proactive group." Wingfield says he would also welcome a reformulation of the test for awarding carriage, with a smaller number of factors fo- cused on the desire of counsel to advance the class action and the sophistication of their case theory. "I would certainly support the concept that the 16-part test should be reduced to something far more limited and objective, and I think this decision points in exactly that direction," agrees his co-counsel in Quenneville, Jonathan Foreman, a partner with London, Ont. firm Harri- son Pensa. In his decision, Perell sug- gests a number of the 16 factors have become "dysfunctional" and could effectively be dis- pensed with. For instance, he said the factor of the "quality of proposed class counsel" threat- ens to instigate a "beauty pag- eant or a cockfight" and should only rarely be a significant con- sideration in awarding carriage. In addition, he suggested that law firms seeking carriage in the future should hire independent counsel to argue the motion. But James Orr, a class action lawyer with Aff leck Greene Mc- Murtry LLP, says he's not so sure about the idea. "Unless the goal is full em- ployment for Toronto lawyers, I would disagree," says Orr, who notes that the courtroom for his last carriage motion could barely accommodate all the lawyers in- volved. "There were probably 20 or 30 gowned." The competing counsel in Quenneville launched their ac- tions within a week of one anoth- er following a July 2017 report in a German magazine alleging that Audi, BMW, Daimler, Porsche and Volkswagen had all engaged in an anti-competitive scheme to gain an advantage over non- German competitors between 1990 and 2016. The article claims they col- laborated on the design, de- velopment, engineering and marketing of luxury vehicles, characterizing the alleged ar- rangement as monopoly-like rather than a direct conspiracy to fix prices. After trying and failing to come to a consortium agree- ment, the two groups moved to- ward a carriage motion to settle the issue. However, at the same time, the team led by Harrison Pensa and Strosberg Sasso Sutts delivered a motion record for certification, including an ex- pert report. Perell described the move as "ill-advised" considering car- riage had not yet been settled, but he also criticized the deci- sion of the competing team of counsel to attack alleged defi- ciencies in the expert report in front of the defence. Ultimately, Perell concluded that case theory was the "most- weighty factor for determining who should have carriage" and plumped for the "more creative and more developable case the- ory" proposed by Wingfield and his team. LT David Wingfield says that carriage motions put pro- spective class counsel in an awkward position due to the presence of defendants. FOCUS FOCUS ON Class Action Law This is more than a phone book. 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