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BARRISTERS AND SOLICITORS - Compensation - Contingency agreements  

Friday, May 28, 2021 @ 6:27 AM  

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Motion by the plaintiffs Kauf and Web Objective (Web), on consent, for approval of the settlement of the action, the plan of allocation, the payment of a $5,000 honorarium to each of Kauf and Web, and payment of fees and disbursements to class counsel. The plaintiffs proceeded with a statutory claim under Part XXIII.1 of the Securities Act. The parties engaged in mediation and reached the proposed settlement to resolve the entire action. The action was certified for settlement purposes on Jan. 4, 2021. Under the settlement agreement, the defendants would pay or cause to be paid the all-inclusive sum of $950,000. In return, the plaintiffs and class members would provide a release to the defendants. The settlement amount was almost the full liability limit under Part XXIII.1 of the Securities Act. Class counsel were seeking approval for the payment of legal fees in the amount of $300,000 and disbursements of $80,000.

HELD: Motion allowed. The settlement negotiations were conducted between sophisticated and experienced counsel, before a professional and highly qualified mediator. The parties bargained at arm’s length. The litigation would have been complicated, risky and expensive to pursue. The settlement was fair and reasonable and in the best interests of the class members. Under the plan of allocation, each authorized claimant in each respective period would have a fair rate of recovery. The evidence supported the conclusion that the class action would not have been brought but for the exceptional efforts of Kauf and Douramakos, the representative of Web. The requested honorariums were therefore awarded. There was no basis to rebut the strong presumption of validity of the contingency fee arrangement. This was a complex case in which class counsel took on significant risk and obtained a good result for the class. The fees and disbursements were approved as requested.

Kauf v. Colt Resources Inc., [2021] O.J. No. 1972, Ontario Superior Court of Justice, B.T. Glustein J., April 15, 2021. Digest No. TLD-May242021008