Archive for the ‘class actions’ Category

Manuel A. Gomez, “The Global Chase: Seeking the Recognition and Enforcement of the Lago Agrio Judgment Outside of Ecuador”

August 14, 2013

 Manuel A. Gomez (Florida International University (FIU) – College of Law) has posted “The Global Chase: Seeking the Recognition and Enforcement of the Lago Agrio Judgment Outside of Ecuador”, Stanford Journal of Complex Litigation, Vol. 1, No. 199, 2013/Florida International University Legal Studies Research Paper No. 13-14. The abstract reads:

 The Lago Agrio judgment is by all measures the largest and most complex award rendered against a multinational oil company in Ecuador, and perhaps in the entire region. With regard to its size, the type of remedies awarded to the plaintiffs by the Sucumbíos court, and the mechanisms through which those remedies will be made effective, the enforcement of the Lago Agrio judgment has rekindled a debate on several important issues that pertain to the litigation of complex cases in South America. The Lago Agrio judgment has revealed the complexity of the multi-layered, multi-step process of enforcing a foreign judgment across different jurisdictions. In so doing, the Lago Agrio ruling has a direct bearing on the larger debate about the judicial protection of collective rights in Latin America, the controversial treatment of punitive damages in countries of the civil law tradition, and the undue influence of litigants on the performance of the courts. The development of the Chevron-Ecuador litigation in South America is one of the most important pieces in the context of this saga and has been generally neglected from the consideration of academicians. This Article fills that gap.

By switching its attention away from the litigation handled by U.S. courts, and focusing into the generally overlooked South American court cases, this Article helps to complete the puzzle of the Chevron saga with regard to the factors that affect the recognition and enforcement of foreign judgments in that region. More specifically, this Article will discuss the interplay between the procedural steps routinely required by the national laws of the enforcing jurisdictions, the treaty obligations assumed by the nations involved, the statutory defenses allowed to the parties, and the litigation strategies employed by counsel to effectively assist or impede the judgment from being fulfilled. The contribution of this Article is two-fold. First, it discusses with certain level of detail the recognition and enforcement regime of foreign judgments across Latin America with special attention to the domestic and the international legal regimes applicable to Argentina and Brazil. Second, by giving importance to the context within which the Lago Agrio litigation and related proceedings are taking place, this Article addresses defendant’s strategies to evade the enforcement of an adverse judgment, and the incentives and challenges faced by plaintiffs, including the strategies procedural and otherwise, to obtain the recognition and enforcement of said foreign judgment. Although the discussion offered in this Article in centered on a single case, in a broader sense this Article highlights the practical difficulties of transnational judgment enforcement and the strategies employed by the parties across multiple countries.

 Download a pdf copy of the paper via SSRN here.

Thomson and Van Exan on “Unpacking Pandora’s Box: Consumer Arbitration Law after Seidel”

April 18, 2013

Kent E. Thomson and Nicholas Van Exan (Davies Ward Phillips & Vineberg LLP) have posted a working paper entitled: “Unpacking Pandora’s Box: Consumer Arbitration Law after Seidel”. The abstract reads:

Until a few years ago, scholars and practitioners shared in the view that Canada was an “arbitration-friendly” jurisdiction. Canadian courts, and in particular the Supreme Court of Canada, earned this reputation through a series of important decisions in which arbitration clauses were enforced in the consumer protection law context. These decisions reflected an emerging consensus among jurists that arbitration was a system of equal importance and legitimacy to the judicial system policed by the courts. Or so it appeared.

In 2011, the Supreme Court of Canada released its decision in Seidel v. Telus Communications Inc., in which a narrow majority of the Court held that an arbitration clause contained in a standard consumer contract was void in respect of certain provisions of the British Columbia Business Practices and Consumer Protection Act. Superficially, Seidel signaled a small but innocuous change to the Supreme Court’s approach to adjudicating statutory rights. The implications of the Court’s decision, however, are potentially far-reaching. In Seidel, the Supreme Court re-ignited a longstanding debate over the legitimacy of arbitration as a means of resolving consumer-related disputes.

This paper explores the law of consumer arbitration both before and after the Supreme Court of Canada’s landmark decision in Seidel. The authors find that Seidel re-opened what appeared in Canada to be a firmly closed Pandora’s Box. Whereas before Seidel courts would not interfere with arbitration agreements absent clear and express legislative language to the contrary, today no such certainty prevails. Contrary to the direction recently taken by U.S. courts, Seidel permits Canadian courts to rule against the arbitration of consumer claims on the basis of implied legislative intent and even at the expense of the arbitrator’s jurisdiction. The resulting uncertainty created by this approach means that counsel should, now more than ever, draft arbitration agreements with a view to their eventual litigation.

Download a pdf copy of the paper via SSRN here.

Former Client Pursues Class Action Against Law Firm’s Contingency Fee Bonanza

January 24, 2013

Yamri Tadesse for Law Times reports on a proposed class action targeting a  law firm’s fees:

Cassie Hodge of Brooklin, Ont., is taking Gary Neinstein and his firm, Neinstein & Associates LLP, to court with a claim that the lawyer unlawfully included costs in a contingency agreement and charged her fees she didn’t understand. She’s seeking $1 million in punitive damages. None of the allegations have been proven in court and Neinstein has yet to file a statement of defence. His lawyer, however, argues the matter is an inappropriate one for a class action.

According to her notice of application, Hodge, a mother of two, was in a car accident in 2002 that left her with serious physical injuries. She retained Neinstein as a lawyer and signed an agreement that said she’d pay him 25 per cent of the damages recovered in addition to partial indemnity costs and disbursements.

But she didn’t receive a copy of the agreement, her counsel Peter Waldmann says.

Here’s the math:

Settlement amount: $150,000.00
Law Firm’s Cut: (Legal fees and party and party costs) $ 60,000.00 (-)
Disbursements: $ 50,000.00 (-)
Third Party Litigation Loan:

-Principal of $19,500 @ 26% per annum interest

$ 32,000.00 (-)
Plaintiff’s Recovery: $ 8,000.00

Still, Neinstein’s counsel, Chris Palaire has a point:

The complainants may pursue other remedies for their claims, but they don’t include a class action, says Paliare.

“That’s the position we’ve had since the outset. That’s not to say that [Waldmann’s] client or clients, if they have more, don’t have an alternative remedy.”

This lawyer-client dispute puts into contrast two access to justice paradigms: Contingency fee retainer agreements regulated under the Solicitors Act, R.S.O. 1990, c S.15,  and class actions governed by the Class Proceedings Act, 1992, S.O. 1992, c 6 and Rule 12 of the Ontario Rules of Civil Procedure, R.R.O. 1990, Reg 194.

Whether this dispute is certified as a class action will depend on a number of factors, most notably, whether the class is identifiable.  However, the Solicitor’s Act is unequivocal that any additional recovery of costs from the proceeding may not be paid to the lawyer unless section 28(8) of the Solicitor’s Act is complied with:

Agreement not to include costs except with leave

(8)  A contingency fee agreement shall not include in the fee payable to the solicitor, in addition to the fee payable under the agreement, any amount arising as a result of an award of costs or costs obtained as part of a settlement, unless,

(a) the solicitor and client jointly apply to a judge of the Superior Court of Justice for approval to include the costs or a proportion of the costs in the contingency fee agreement because of exceptional circumstances; and

(b) the judge is satisfied that exceptional circumstances apply and approves the inclusion of the costs or a proportion of them. 2002, c. 24, Sched. A, s. 4.

Enforceability of greater maximum amount of contingency fee

(9)  A contingency fee agreement that is subject to approval under subsection (6) or (8) is not enforceable unless it is so approved. 2002, c. 24, Sched. A, s. 4.

Stay tuned.

The Adverse Costs Consequences of Class Actions

January 8, 2013

Costs Stack Up (Image via Forbes.com)

[113]      Based on anecdotal evidence available to me as a class actions judge, it is my opinion that the large costs awards that have been awarded in recent years are having adverse consequences. One apparent adverse consequence of the potential for these large costs awards is that many parties to class actions through their lawyers show no restraint in their approach to prosecuting or defending the certification motion. The parties roll the dice that they will be the successful party, show no restraint in running up costs, but hope to recover an enormous award of costs. Another consequence of the potential for these large costs awards is that in order to avoid the sting of the enormous adverse costs awards, the unsuccessful parties make disingenuous or ironical arguments that their claim or defence raised a novel issue or was in the public interest. Another adverse consequence is that the court’s response to arguments about costs has been inconsistent, and the outcome of costs determinations is uncertain and unpredictable.  Another very serious consequence is that the number of new class actions appears to be declining, and small but possibly meritorious class actions are disappearing as class counsel warily select the cases that they will prosecute. The risk of grotesque adverse costs awards is a serious disincentive to law firms being prepared to take on class actions and serve the public’s demand for access to justice.

McCracken v. Canadian National Railway Company2012 ONSC 6838 (Ont SCJ)- Costs Endorsement per Perell J.

Canadian lawyer copyright action against Thomson Reuters certified as class action

February 24, 2012
Thomson bReuters Messenger

Following recent news of an attorney federal class action filed in New York against LexisNexis and West for copyright violations, Jason Wilson at rethinck reports that the Canadian copyright action against Thomson Reuters has been certified as a class action.

The action in Waldman v. Thomson Reuters Corporation 2012 ONSC 1138 (Court File No. 10-CV-403667CP) involves a primary and secondary copyright infringement claim and infringement of moral rights claim brought by Lorne Waldman, a leading immigration and refugee lawyer, against Thomson through its legal publishing division, Carswell.

Waldman previously drafted and filed an appeal factum in the Court of Appeal for Ontario, on behalf of his client as intervenor, Maher Arar, in Bouzari v. Republic of Iran, an appeal which involved the issue of state immunity for torture.

Waldman subsequently registered a claim for copyright in his factum with the Canadian Intellectual Property Office. The Waldman class action alleges that  Thomson infringed the copyright of the class members by allowing subscribers to the Litigator service to access copies of court documents authored by lawyers and law firms, without permission and for a fee. Waldman claims on behalf of the class, $50 million in general damages and disgorgement of profits, or, alternatively, statutory damages under section 38.1 (a minimum of $500 and a maximum of $20,000) , $1 million in punitive damages, costs and pre-judgment interest.

Justice Perell rejected Thomson’s arguments that the class action was antithetical to the underlying rationales for class proceedings; namely, the open court system, access to justice, behaviour modification and judicial economy.  Perell J. also rejected Thomson’s arguments based on lack of commonality, identifiable class or preferable procedure criteria, finding that any purported difficulty in adjudicating individual claims to copyright, lack of originality or creativity, client contribution or waiver of privilege, were triable issues or to be addressed during the litigation, as were any available statutory and common law defences, such as fair dealing.  As Perell J. notes,

[7]               However, notwithstanding Thomson’s challenges, in my opinion, Mr. Waldman’s action does satisfy the criteria for certification, and with some modifications to the class definition and to the common questions, his action should be certified.

[8]               As my Reasons will reveal, Thomson’s arguments about commonality and about the preferable procedure criteria of certification should be rejected. In the main, Thomson’s arguments fail to recognize that certification is a technical and procedural legal phenomenon and the court’s gatekeeper’s role is limited to ensuring that the technical and procedural elements of the test are satisfied, which, subject to some adjustments, is the situation for the case at bar. Some of Thomson’s arguments against certification, while relevant to the determination of the merits of the action and to Thomson’s several defences, are not pertinent to whether, as a procedural matter, the action should be certified as a class action.

Full Disclosure: I have co-authored a few pleadings and facta that are on the Litigator database which means I would qualify as a member of the Class, unless I opt out].


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