The current mess of class action carriage motions

Wednesday, April 11, 2018

So, Justice Paul Perell of the Ontario Superior Court of Justice believes that law firms seeking carriage of a class action should hire independent counsel to argue carriage motions.


For no less noble a reason than to “introduce an element or at least the appearance of some objectivity,” Perell wrote in his recent judgment awarding carriage of a competition class action against a group of German carmakers to Harrison Pensa LLP and Strosberg Sutts LLP. They were the victors in what amounted to a pissing contest against a second group composed of Koskie Minsky LLP, Paliare Roland Rosenberg Rothstein LLP and Siskinds LLP.

We can’t, of coarse [this is not a spelling error], have judges using language like “pissing contest” in public reasons: it might, after all, make it too easy for the public to understand what’s really going on. But despite these constraints, Perell did a great job, capturing the flavour of the thing by describing carriage motions as “a blood sport of lawyer-bashing,” one that was “gross and not helpful.” After all, the public perfectly well understands clients bashing lawyers and should therefore have little difficulty making the jump to lawyers bashing lawyers, especially with lucrative contingency fees serving as low-hanging fruit.

It’s not that competing counsel in Quenneville v. Audi AG 2018 ONSC 1530spent all their time awash in negativity, seeking to “badmouth their rival.” On the positive side, and doubtless by way of advancing the cause of justice, they also managed to “extol their own virtues”. Without getting into further details, suffice it to say that Perell found it necessary to point out that the “self-reverent testimonials” in this case “were not a pleasure to read.”

As an aside, I thought reading the judgment was kind of fun. A 23-page peroration lambasting the whole process on which a judgment itself is based is a lot more fun than, say, poking around in the arcane history of the rule against perpetuities.

But what’s beyond me is why it took our judiciary a mere 25 years from the coming into force of Ontario’s Class Proceedings Act to figure out that lawyers trying to get their hands on a lucrative retainer were unlikely to regard objectivity with reverence. Maybe that’s why carriage motions are such a mess and continue to vex counsel and the courts. Maybe the endless list of factors developed by judges as the criteria for deciding carriage motions is a desperate attempt at imposing some semblance of objectivity on the process. If so, it doesn’t seem to have worked.

“At last count, I think the test had 19 factors and a 19-factor test is no test at all,” said veteran class action litigator Kirk Baert of Koskie Minsky. “We need to distill the list down to three things at most in order to reduce the cost and complexity of carriage motions.”

But how likely is that to happen? This, after all, is the profession that still largely clings to the now infamous “billable model” that has for years used a formula that multiplies as many hours as possible by as quickly escalating rates as possible in order to determine fees that are “fair,” to business and consumers alike. Having 19 factors in the mill adds a lot more grist than three would.

To be sure, that isn’t entirely fair to the plaintiff’s class action bar, who lives and dies by the contingency fee. And contrary to public opinion and the opinions of envious brethren still wedded to hourly rates and cost-conscious clients, class counsel frequently deserve every penny of their contingency fees in the risk-heavy operating theatre in which class actions function. Taking risks, after all, mean class counsel have to exercise judgment, an endangered talent disincentivized elsewhere in the profession by dutiful adherence to the “billable model.”

Still, judgment doesn’t appear to have come into play when carriage is at stake.

“Carriage battles, like war, are hell,” Baert said. “A coin toss may be preferable to what we are currently doing.”

Now, that’s objective. Some might say sensible in many cases.

So bet against it happening.

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