Class actions are regularly resolved by way of settlement. Unlike settlements in other types of litigation, class action settlements must be approved by the court. Once approved, the settlement is binding on all class members who did not opt-out of the action. Prior to the settlement approval hearing, class members are provided with a court-approve notice containing, among other things, a description of the proposed settlement, a description of how the settlement funds will be distributed, and class counsel’s proposed fees.
Class members who disagree with a class action settlement, distribution of settlement funds and/or proposed fees have several options:
1. Contact class counsel
Speaking with class counsel is a good first step. Sometimes the rationale for the settlement is not clear in the notice of hearing and can be easily explained by class counsel.
2. Opt-out of the action (if the deadline has not passed)
Class members are provided with one opportunity to opt-out of a class action. If the opt-out deadline has not yet expired, you may wish to opt-out of the class action. If you opt-out, you will not be eligible to receive any money or other benefits from the class action; however, you will be able to start your own case against the defendants.
3. Object to the settlement
Class members have a right to object to class action settlements. The process for raising objections is usually described in the notice of settlement approval hearing. Typically, class members are required to file a written objection by a certain deadline and indicate whether they wish to appear at the settlement approval hearing. If you are unsure about the process, you should contact class counsel.
In Bancroft-Snell v Visa Canada Corporation, 2019 ONCA 822, the Ontario Court of Appeal determined that individual class members do not have standing to appeal a settlement approval decision. As such, objecting class members should make sure to make careful use of their right to object at first instance. While it is not required to raise an objection, some class members may choose to retain their own counsel (typically at their own expense). Class members may also be able to seek assistance from resources like the non-profit Class Action Clinic at Windsor Law.
When considering whether to object, keep in mind that a settlement represents a compromise and reflects the strengths and weaknesses of the case, and the litigation risks. Even in the strongest case, there is no assurances of success.