Doucet v The Royal Winnipeg Ballet: Closing the Curtain on Honouraria for Representative Plaintiffs and Class Member Witnesses?

• 
  Chelsea Smith
  Lawyer

Of the divergent approaches to representative plaintiff honouraria across Canada’s class action regimes, Ontario’s has become one of the least permissive. Although different judges of the Ontario Superior Court of Justice have different approaches to honouraria,[1] generally, Ontario class actions law permits honouraria only in exceptional circumstances (i.e., where there is evidence that the representative plaintiff made an exceptional and necessary contribution to the preparation or presentation of the case and that this contribution resulted in success for the class).[2] Over the last few years, Ontario class actions law has become even more resistant to honouraria as more and more Ontario class action judges have trended towards (1) heightened scrutiny of evidence filed in support of honourarium requests; and, (2) avoidance of real or perceived conflicts of interest, including by reducing the requested honourarium amount.[3] This trend of rising judicial skepticism towards honouraria recently culminated in Doucet v The Royal Winnipeg Ballet,[4] a February 11, 2022 decision of Perell J of the Ontario Superior Court of Justice concluding that the practice of granting honouraria is wrong and should be stopped altogether as a matter of legal principle.[5]

This article examines the impact or possible impact of Doucet on the practice of granting honouraria at the Ontario Superior Court of Justice, namely whether the curtain has closed on this practice altogether.

Doucet

Doucet[6] is a settlement and class counsel fees approval decision in the context of a certified institutional abuse class action brought on behalf of former students of the defendant ballet school and their family members. The class action alleged, inter alia, that an employee of the defendant ballet school took intimate photos of the ballet school’s students in private settings and that the defendant ballet school was negligent and vicariously liable for the defendant employee’s misconduct.[7]

Within weeks of the common issues trial, after years of on-and-off settlement negotiations, the class action settled. The plaintiffs moved for settlement approval as well as approval of class counsel fees and honouraria for the two representative plaintiffs and three class member witnesses.[8]

Class counsel recommended that the Court approve a total of $70,000 in honouraria to be paid as follows: a $30,000 honourarium to the representative plaintiff of the former student class; a $10,000 honourarium to the representative plaintiff of the family class; and, $10,000 honouraria to each of the three class member witnesses. In the opinion of class counsel, these honouraria were justified due to, inter alia, (1) the exceptional efforts of the representative plaintiffs and class member witnesses, including the extraordinary amount of time and energy they had devoted to helping lead this litigation, as well as (2) the representative plaintiffs and class member witnesses having suffered re-traumatization and/or invasive and painful cross-examinations as a result of their roles in this litigation.[9]

Justice Perell indicated that the $70,000 honouraria request caused him “to reconsider the court’s extraordinary discretion to pay a litigant a stipend for prosecuting a civil claim.”[10] While he approved the settlement, class counsel fee and ancillary relief,[11] not only did he not approve the requested honouraria, for the following nine reasons, he concluded that the practice of granting honouraria is wrong and should be stopped altogether:

1. Awarding a litigant on a quantum meruit basis for active and necessary assistance in the preparation or presentation of a case is contrary to the policy of the administration of justice that represented litigants are not paid for providing legal services. Lawyers not litigants are paid for providing legal services.
2. A fortiori awarding a represented litigant on a quantum meruit basis for active and necessary assistance in the preparation or presentation of a case is contrary to the policy of the administration of justice that self-represented litigants are not paid for providing legal services. Lawyers not litigants are paid for providing legal services.
3. Awarding a litigant for such matters as being a witness on examinations for discovery or for trial is for obvious reasons contrary to the administration of justice.
4. In a class action regime based on entrepreneurial Class Counsel, the major responsibility of a Representative Plaintiff is to oversee and instruct Class Counsel on such matters as settling the action. The court relies on the Representative Plaintiff to give instructions that are not tainted by the self-interest of the Representative Plaintiff receiving benefits not received by the Class Members he or she represents.
5. Awarding a Representative Plaintiff a portion of the funds that belong to the Class Members creates a conflict of interest. Class Members should have no reason to believe that their representative may be motivated by self-interest and personal gain in giving instructions to Class Counsel to negotiate and reach a settlement.
6. Practically speaking, there is no means [of] testing the genuineness and [. . .] value of the Representative Plaintiff’s or Class Member’s contribution. Class Counsel have no reason not to ask for the stipend for their client [to be] paid by the class members. The affidavits in support of the request have become pro forma. There is no cross-examination. There is no one to test the truth of the praise of the Representative Plaintiff. Class Members may not wish to appear [. . .] ungrateful and ungenerous and it is disturbing and sometimes a revictimization for the court to scrutinize and doubt the evidence of the apparently brave and resolute Representative Plaintiff.
7. The practice of awarding an honourarium for being a Representative Plaintiff in a class action is tawdry. Using the immediate case as an example, awarding Class Counsel $2.25 million of the class members’ compensation for prosecuting the action, makes repugnant awarding Ms. Doucet $30,000 of the class members’ compensation for her contribution to prosecuting the action. The tawdriness of the practice of awarding [an] honourarium dishonours more than honours the bravery and contribution of the Representative Plaintiff.
8. As revealed by the unprecedented request made in the immediate case, the practice of awarding an honourarium to a Representative Plaintiff in one case is to create a repugnant competition and grading of the contribution of the Representative Plaintiff in other class actions.
9. The practice of awarding [an] honourarium in one case may be an insult to Representative Plaintiffs in other cases where lesser awards were made. For instance, in the immediate case, I cannot rationalize awarding Ms. Doucet $30,000 for her inestimably valuable contribution to this institutional abuse class action with the $10,000 that was awarded to the Representative Plaintiffs who brought access to justice to inmates in federal penitentiaries and who themselves experienced the torture of solitary confinement. I cannot rationalize awarding any honourarium at all when I recall that the Representative Plaintiff in the Indian Residential Schools institutional abuse class action did not ask for [an] honourarium and he did not even make a personal claim to the settlement fund. Having to put a price tag to be paid by class members on heroism is repugnant.[12]

Two Conflicting Trends

While Doucet makes very clear what Perell J thinks about honouraria, unfortunately, it only adds to Ontario case law’s lack of clarity and consistency on the questions of whether and when to grant honouraria, and in what amount. Inconsistent approaches remain a reality.

Although we cannot describe with certainty the Ontario Superior Court of Justice’s approach to honouraria, we can be certain of at least one thing: Doucet was not the final curtain for honouraria. The plaintiffs in Doucet are seeking leave to appeal; so, the decision could be reversed. In addition, while Doucet might garner some traction with at least some other judges of the Ontario Superior Court of Justice,[13] since its release, there have already been at least two Ontario Superior Court of Justice decisions, decided by two different judges, that did not follow and/or refused to follow it.[14]

One of these two decisions, Redublo v CarePartners,[15] makes reference to and is part of a second trend that has emerged, conflicting with the trend of rising judicial skepticism towards honouraria mentioned at the outset of this article. This second trend, observable in Miller v FSD Pharma, Inc,[16] Romita v Intellipharmaceuticals International Inc,[17] Pabla v Caterpillar of Canada Corporation,[18]and Redublo,[19] is towards expanding the availability of representative plaintiff honouraria.[20]

The strongest example of this trend in Ontario Superior Court of Justice case law is Redublo.[21]

Redublo

Redublo is a March 2, 2022 decision of Akbarali J of the Ontario Superior Court of Justice. In the context of a proposed privacy breach class action, the plaintiffs sought an order for certification for settlement purposes, settlement approval, class counsel fees approval, and approval of a $5,000 honourarium to each of the proposed representative plaintiffs.[22]

After certifying the class action for settlement purposes and approving the settlement, class counsel fees and disbursements,[23] Akbarali J went on to consider the honouraria request before her and address Perell J’s decision in Doucet head on.[24]

Citing Miller,[25] Romita[26] and Pabla[27] as examples of possible “steps towards expanding the availability of honoraria to representative plaintiffs” juxtaposed against Doucet,[28] and noting a post-Doucet Ontario Superior Court of Justice decision granting a $10,000 honourarium without reference to Doucet,[29] Akbarali J observed that judges of the Ontario Superior Court of Justice continue to have divergent approaches to honouraria.[30]

After finding at least implicit appellate approval of the practice of awarding representative plaintiff honouraria in Smith Estate v National Money Mart Company,[31] Akbarali J considered Australia’s and British Columbia’s more permissive approaches to granting honouraria, and several arguments in favour of the practice of granting representative plaintiff honouraria, before deciding that “[l]ike every question that arises in class proceedings,” the question of whether and when to award honouraria must be viewed through the lens of the goals of the Class Proceedings Act, 1992: access to justice, behaviour modification, and judicial economy.[32]

From her review of primary and secondary sources, Akbarali J concluded that the practice of granting representative plaintiff honouraria advances the goals of the Class Proceedings Act, 1992 in several ways, including:

(1)       by providing an incentive to representative plaintiffs to take on the risks and duties of that role in order to access justice for the class;

(2)       by encouraging a representative plaintiff to take on obligations and risks out of proportion to her damages to ensure defendants are held to account and modify their behaviours, especially in cases where damages are modest;

(3)       to incentivize representative plaintiffs to take an active role in the process, and in doing so, act as a check and balance on entrepreneurial class counsel, who often have the largest financial stake in class actions litigation;

(4)       by providing, in cases involving sexual, physical, and/or institutional abuse, a small measure of recognition and compensation for the representative plaintiffs having protected the class from being re-traumatized by the litigation process, at the risk of their own personal re-traumatization;

(5)       by covering or defraying out-of-pocket expenses or financial losses representative plaintiffs incur in the discharge of their duties;

(6)       by ensuring that the class does not benefit at the expense of the representative plaintiff and that the representative plaintiff receives recognition for having taken on work beyond that which she would do to advance her personal claim; and,

(7)       by ensuring that a representative plaintiff is not unduly prejudiced by taking on the responsibilities and obligations of that role.[33]

Akbarali J then went on to address each of Perell J’s nine reasons for ending the practice of granting honouraria head on, explaining why she does not agree with the concerns Perell J raised in Doucet,or at least, why she does not agree that they cannot be managed. For example, Akbarali J does not agree that awarding representative plaintiff honouraria amounts to paying for legal services. Instead, honouraria compensate representative plaintiffs for work done for the class, and not in pursuit of their own individual claims. Similarly, Akbarali J does not agree with Perell J that the practice of granting honouraria is tawdry, or that it dishonours more than honours the bravery and contribution of a representative plaintiff. According to Akbarali J, it is not up to the court to decide whether a representative plaintiff will feel honoured or dishonoured by an honourarium. Rather, one can presume that if a representative plaintiff swears an affidavit in support of an honourarium, she does not feel that receiving it would dishonour her contribution to the class.[34]

In the end, Akbarali J concluded not only that judges of the Ontario Superior Court of Justice should allow the practice of granting honouraria to continue, but that their approach to honouraria should become more permissive:

In conclusion, not only would I continue the practice of awarding honoraria, but in my view, the approach adopted by the British Columbia Court of Appeal, and which has been creeping into Ontario cases like Miller, Romita, and Pabla, better recognizes the role that honoraria can play in advancing the objectives of the CPA.[35]

Justice Akbarali held (1) that honouraria are appropriate where a representative plaintiff, or other involved class member, has provided “competent service coupled with positive results to the class”; and, (2) that in assessing the quantum of the honourarium, courts should consider the following eleven factors:

(1)       whether the representative plaintiff had active involvement in the initiation of the litigation and retainer of class counsel;

(2)       whether the representative plaintiff was exposed to a real risk of costs;

(3)       whether the representative plaintiff suffered significant personal hardship or inconvenience in connection with the litigation;

(4)       whether the representative plaintiff suffered direct financial losses or incurred out-of-pocket costs that she would not have incurred as an individual litigant;

(5)       whether the representative plaintiff took on a role that was extraordinarily onerous, or potentially traumatic, or that put her at risk of suffering additional harms;

(6)       the amount of time the representative plaintiff spent, and the activities she undertook, in advancing the litigation;

(7)       how the representative plaintiff communicated and interacted with other class members;

(8)       the extent of the representative plaintiff’s participation at various stages of the litigation, including discovery, settlement negotiations, and trial;

(9)       how the settlement or judgment benefits the class;

(10)     whether the proposed honourarium is an amount that does not create an actual or perceived conflict with the class; and,

(11)     whether there are objectors to the proposed honourarium and if so, the nature of their objections.[36]

Concluding that the representative plaintiffs in the matter before her provided competent service coupled with positive results to the class, Akbarali J granted the requested $5,000 honouraria.[37]

Conclusion

In conclusion, Doucet[38] does not represent a turning point in collective critical thinking on the propriety of granting honouraria. Rather, it forms part of the same inconsistent case law that has plagued this niche area of class actions law for years, now with two trends battling it out for centre stage. While Redublo[39] provides sound guidance on how judges of the Ontario Superior Court of Justice can address the concerns Perell J raised in Doucet,[40] class action litigants and counsel need clarity and appellate guidance beyond Smith Estate.[41]

This article was written by Class Actions Lawyer Chelsea Smith and was originally published in the Ontario Bar Association Class Actions Law Section Newsletter (March 2022).

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[1] Smith Estate v National Money Mart Co, 2011 ONCA 233 at para 134; Redublo v CarePartners, 2022 ONSC 1398 at para 102 [Redublo].

[2] Robinson v Rochester Financial Ltd, 2012 ONSC 911 at para 43; Reddock v Canada (Attorney General), 2019 ONSC 7090 at paras 33-35. Compare with the approach to honouraria that the British Columbia Court of Appeal adopted in Parsons v Coast Capital Savings Credit Union, 2010 BCCA 311 at paras 18-23.

[3] See e.g. Park v Nongshim Co, Ltd, 2019 ONSC 1997 at paras 84-92; Robinson v Medtronic, Inc, 2020 ONSC 1688 at paras 96-100; Markis v Endo International PLC, 2020 ONSC 5709 at paras 37-46; Casseres v Takeda Pharmaceutical Company, 2021 ONSC 2846 at paras 10-12;

[4] 2022 ONSC 976 [Doucet].

[5] Ibid at para 58.

[6] Ibid.

[7] Ibid at paras 5-11.

[8] Ibid at paras 1-3, 18,

[9] Ibid at paras 2, 57, 60.

[10] Ibid at para 58.

[11] Ibid at paras 4, 51, 56, 62.

[12] Ibid at paras 58, 61.

[13] This remains to be seen.

[14] Karla v Mercedes Benz, 2022 ONSC 941 at paras 34-40 [Karla]; Redublo, supra note 1 at paras 94-120.

[15] Redublo, supra note 1.

[16] 2021 ONSC 911 at paras 17-18 [Miller]. In this decision, Morgan J awarded a $5,000 honourarium to the representative plaintiff. He took into account (1) that the representative plaintiff had initiated the investigation into the matter; conducted her own investigation prior to contacting class counsel and shared the results of that investigation with the class; took time to participate in the prosecution of the class action; swore affidavits on two motions and made herself available for examination on these affidavits; and, met with class counsel as necessary to advance the class action; and, (2) that class counsel attributed much of the settlement to the representative plaintiff’s efforts. While Morgan J did not say whether this qualified as “exceptional circumstances,” he granted the requested honourarium, finding it to be modest, fair and reasonable in the circumstances.

[17] 2021 ONSC 6760 [Romita]. In this decision, instead of evaluating whether the representative plaintiff’s contribution was exceptional, Morgan J, at paras 7-8, held that “where a representative plaintiff can demonstrate that he or she has rendered active and necessary assistance in respect of the preparation of a case which aided in the ultimate outcome, it may be appropriate to award compensation to the representative plaintiff in his or her own right,” and granted the requested $10,000 honourarium.

[18] 2022 ONSC 732 [Pabla]. In this decision, MacLeod RSJ granted $10,000 honouraria to the representative plaintiff in the class action before him as well as the representative plaintiff in a parallel Quebec class action, finding, at para 30, that “such fees have become more common than they once were,” and that “there is utility in encouraging the active involvement of representative plaintiffs in litigation of this type.”

[19] Redublo, supra note 1.

[20] Ibid at paras 96-99, 113-14.

[21] Ibid.

[22] Ibid at paras 1-18.

[23] Ibid at paras 43, 78, 92-93, 121.

[24] The Ontario Superior Court of Justice released Doucet, supra note 4, when Redublo, supra note 1, was under reserve. As a result, Akbarali J sought additional submissions from counsel on its impact: Redublo, supra note 1 at para 99.

[25] Supra note 16.

[26] Supra note 17.

[27] Supra note 18.

[28] Supra note 4.

[29] Karla, supra note 14.

[30] Redublo, supra note 1 at paras 95-102.

[31] 2011 ONCA 233 at paras 133-36 [Smith Estate].

[32] Redublo, supra note 1 at para 102-10.

[33] Ibid at para 111.

[34] Ibid at para 112.

[35] Ibid at para 113.

[36] Ibid at para 114.

[37] Ibid at paras 115-21.

[38] Supra note 4.

[39] Supra note 1.

[40] Supra note 4.

[41] Supra note 31.