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BARRISTERS AND SOLICITORS - Compensation - Contingency agreements - Fair and reasonable

Friday, July 23, 2021 @ 5:33 AM  


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Motion by the plaintiffs for approval of the class action settlement agreement, class counsel’s fees, based on a 25 per cent contingency fee retainer, and honoraria to the representative plaintiffs. The 2006 class action about hidden foreign exchange fees on currency conversions in registered accounts settled for $100 million. On liability issues, it was found the BMO defendants were liable to the class over a 10-year period for breach of trust, breach of fiduciary duty and breach of contract. The appropriate remedy was determined to be an accounting and disgorgement of profits. The settlement agreement provided for a speedy, no-claim process that would directly distribute funds to 135,000 class members. Class counsel docketed $5.5 million in unbilled time and $900,000 in disbursements.

HELD: Motion allowed in part. The settlement was fair, reasonable and within the best interests of the class. Class counsel engaged in a hard-fought 15-year litigation and ended with a very fair and reasonable settlement. A straight-line application of the agreed-to contingency fee was not appropriate in this “mega fund” settlement as it would result in an undeserved windfall. The risks incurred by class counsel were real but not remarkable. The upper limit of a fair and reasonable legal fees award was $20 million. Honoraria totalling $70,000 for representative plaintiffs, including $50,000 for the lead plaintiff, were appropriate because of their extraordinary level of dedication and commitment over the 15-year litigation and the financial hardship incurred by the lead plaintiff.

MacDonald v. BMO Trust Co., [2021] O.J. No. 3338, Ontario Superior Court of Justice, E.P. Belobaba J., June 17, 2021. Digest No. TLD-July192021009