In the event of a successful monetary settlement in a class proceeding, courts may order that additional compensation, in the form of a payment called an honorarium, be paid to a representative plaintiff who has meaningfully contributed to advancing litigation on behalf of the class.
Honoraria have not been awarded routinely in Ontario. The case law establishes that the payment of an honorarium is “exceptional” and should only be approved where a representative plaintiff has gone above and beyond the normal course in assisting with the prosecution and settlement of a class action. The amount of the honorarium is also at the discretion of the court. In Ontario, while courts have awarded up to $50,0000, honoraria are typically lower, ranging from $5,000 to $10,000.
Up until very recently, the law in Ontario has trended towards expanding the availability of such awards, with courts recognizing the positive incentive honoraria create for representative plaintiffs to engage in the litigation in a meaningful, rather than notional, way. Put differently, Ontario law is trending towards the approach in British Columbia, where services of special significance beyond the usual responsibilities of a representative plaintiff are not required. In BC, where a monetary settlement is achieved, competent service coupled with positive results is sufficient to recognize a representative plaintiff by way of an honorarium.
Justice Perell’s recent decision in Doucet v The Royal Winnipeg (“Doucet”) has taken Ontario law in another directly entirely. In Doucet, which was an institutional abuse case, Justice Perell declined to make any award to the representative plaintiff and held that “the practice [of awarding honoraria] is wrong” and “should be stopped as a matter of principle”.
Less than three weeks after the release of Doucet, Justice Akbarali issued her decision in Redublo v CarePartners (“Redublo”), a privacy breach class action. She takes a decidedly different approach, disagreeing with the rationale underlying Doucet and expanding the availability of honoraria in a way that is consistent with the developing line of Ontario cases and the BC approach.
All of this leaves a lawyer wondering, what is right, and what is wrong? In the author’s opinion, Justice Akbarali got it right in Redublo.
Doucet v The Royal Winnipeg Ballet
In Doucet, the plaintiffs alleged that between 1984 and 2015, Bruce Monk, an instructor and photographer with the Royal Winnipeg Ballet, photographed students in private settings and engaged in sexual misconduct at photo shoots. A negotiated settlement in the amount of $10 million, all-inclusive, was reached on the brink of a three-week common issues trial.
At the settlement approval motion, class counsel recommended that the court approve $70,000 of honourarium payments to be split between the plaintiff ($30,000), her husband ($10,000), and three class member witnesses ($10,000 each). Justice Perell declined to do so, and concluded that, as a matter of legal principal, honoraria should no longer be granted.
His Honour’s reasoning can be distilled down to the following arguments:
- lawyers, not litigants are paid for providing legal services;
- awarding a representative plaintiff a portion of the funds that belong to the class members creates a conflict of interest, in that they may be motivated by self-interest and personal gain as opposed to the best interests of the class; and
- the practice is “tawdry,” creating a repugnant competition and grading of the contribution of the representative plaintiff in other class actions.
While judges of the Superior Court have different approaches with respect to payment of the representative plaintiff’s fees, Doucet is a significant divergence from the long list of cases requiring an “extraordinary” contribution.
Justice Perell noted the fact that in some other important cases, representative plaintiffs have not asked for honoraria:
“I cannot rationalize awarding any honorarium at all when I recall that the Representative Plaintiff in the Indian Residential Schools institutional abuse class action did not ask for a honorarium 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.”
It is also possible that counsel aimed too high by requesting $70,000. The authorities reflect a fundamental tension on this point: an honorarium should not be so large as to create the impression that the representative plaintiff is put into a conflict of interest; but, if a representative plaintiff is not compensated in some way for their time and effort, then the class is enriched at their expense. Justice Perell resolved this tension by doing away with the award altogether. The problem is that such a result leaves class members with little reason to step into the shoes of the representative plaintiff. Without such an individual, there is no class action.
Redublo v CarePartners
Redublo was a privacy class action arising out of a cyber breach of the computer systems of CarePartners, a provider of personal support workers, rehabilitation services and nursing care for patients in homes, schools, retirements homes, clinics and workplaces. In Redublo, a hacker stole volumes of sensitive unencrypted data and held it for ransom, which CarePartners refused to pay. The hacker went on to release the private information to the Canadian Broadcasting Corporation and certain websites. Notably, CarePartners maintained a “Privacy Pledge” on its website, in which it pledged to protect its patients’ privacy. Altogether, it appeared that some 80,000 complete patient medical files and other financial data was leaked, though there was no definitive evidence that the data was sold, disclosed, or otherwise made publicly available.
The representative plaintiffs were a patient and an employee of CarePartners who contributed to the advancement of the action. Mr. Redublo stepped forward to act as representative plaintiff when the limitation period was about to expire—without him there would have been no action. Both plaintiffs risked further intrusion into their privacy and discharged their duties to the class in a competent manner. Accordingly, class counsel recommended that a $5,000 honorarium be paid to each plaintiff.
Justice Akbarali agreed, concluding that the goals of the Class Proceedings Act, 1992 are advanced through the award of honoraria to representative plaintiffs in class proceedings. In so doing, Her Honour reviewed the line of Ontario Superior Court decisions; the Ontario Court of Appeal’s treatment of honoraria in Smith Estate v National Money Mart Company, 2011 ONCA 233; the British Columbia Court of Appeal’s decision in Parsons v Coast Savings Credit Union, 2010 BCCA 311; and the academic commentary.
This review revealed that awards of honoraria should not be done away with but expanded. To that end, Justice Akbarali noted that:
- honoraria serve to encourage a representative plaintiff to take on obligations and risks out of proportion to her damages to ensure defendants are held to account, meeting the goal of behaviour modification;
- honoraria incentivize representative plaintiffs to take an active role in the litigation process, and in so doing, act as a check and balance on entrepreneurial class counsel;
- in cases involving sexual, physical, and/or institutional abuse, a representative plaintiff protects the class from being re-traumatized by the litigation process, at the risk of their own personal re-traumatization; and
- without honoraria, the class benefits at the expense of the representative plaintiff who takes on work beyond that which he would do to advance a personal claim.
Furthermore, Justice Akbarali concluded that Justice Perell’s concerns, as expressed in Doucet, could be managed:
- honoraria are not akin to payment for legal services because they compensate the plaintiff for work done on behalf of the class, and not in pursuit of their individual claims;
- real or perceived conflicts of interests can be managed by the court carefully scrutinizing the evidence before it and by ensuring that robust notice of the proposed honorarium is given so that class members may object if they wish, and by ensuring that the honoraria are not too large;
- appreciating that civil courts have limited mechanisms to recognize the contributions of class members, there is nothing tawdry about awarding money to a representative plaintiff who has taken on risks and obligations that they did not have to; and
- cases should not be graded against each other, because each will turn on their own specific facts.
Justice Akbarali concluded that she “would award an honorarium where a representative plaintiff, or other involved class member, has provided competent service coupled with positive results to the class.”
Justice Akbarali’s decision in Redublo shifts the Ontario needle towards the BC approach, consistent with developing Ontario jurisprudence on awarding honoraria. Doucet is an outlier, and it is unfortunate that victims of institutional abuse were not awarded some token for their hard work in advancing that action to a successful resolution.
In deciding to award an honourarium “where a representative plaintiff, or other involved class member, has provided competent service coupled with positive results to the class,” Justice Akbarali moves away from the “exceptional” contribution requirement. This is a good thing. Positive incentives to assume the duties of a representative plaintiff are important because the representative plaintiff fulfills a critical role in furthering the objectives of class actions. More simply, no action can be brought without a representative plaintiff willing to step forward and assume that role and its associated burdens for the benefit of the class.
In the absence of an honourarium, the class actions framework requires an altruistic individual to fill this role with no incentive, and in some instances, creates additional barriers to access to justice. Thus, there is real practical utility in encouraging the active involvement of representative plaintiffs. Justice Akbarali’s decision in Redublo reinforces the validity of such a proposition.
We will be keeping our eyes on Doucet to see if it is appealed.