Terms of settlement were revised in class action

Ontario civil | Civil Procedure

Class actions

Terms of settlement were revised in class action

Class action on behalf of bank employees against bank was certified as class proceeding and settled for first time in August 2014. First settlement did not stipulate final compensation amount and set out simple claims process. Claims process required class members to submit claims for unpaid overtime by Oct. 15, 2014 and bank was to respond to claims by Nov. 28, 2014. Class members who were unsatisfied with bank’s response could appeal decision to independent arbitrator. In early November, representative plaintiff discovered that bank was taking steps appearing to be in breach of claims process, class counsel brought motion to address those concerns, and bank brought its own motion to extend deadline for responding to claims. Appeal process set out in settlement was suspended until resolution of motions and parties resolved issues in dispute without further judicial intervention. Parties agreed to new payment approach and terms of settlement were revised. Under revised settlement, bank agreed to pay further $20.6 million in addition to $18.7 million paid out to date, resulting in total payout amount of $39.3 million to approximately 1600 class member claimants. Revised settlement based additional payments on thresholds that bank had used during claims process and claims were divided into two categories consisting of claims that had been partially reduced and those that had been completely rejected. Under revised settlement, claimant’s total recovery inclusive of amounts already paid was capped according to certain percentages. Other key provisions in revised settlement provided for extension of deadline for claims consideration to Dec. 31, 2014, that no further information need be submitted, that payments to claimants would be subject to tax and source deductions, and that compensation bands and payments were final. Explanations given by bank for concerns raised by claimant were accepted. Discussion with counsel satisfied court that no class member was losing money that was otherwise hers to receive. Each class member submitted claim that was subjected to one of three levels of scrutiny depending on amount claimed. Bands and payouts within those bands reflect claim review experience within each band and could be justified as fair and reasonable when compared to alternative or protracted litigation and uncertain recoveries. Revised settlement was fair, reasonable, and in best interests of class. Bank’s proposal to pay class counsel $2.3 million in legal fees separate and apart from revised settlement amount was fair and reasonable.
Fulawka v. Bank of Nova Scotia (Mar. 18, 2016, Ont. S.C.J., Edward P. Belobaba J., 07-CV-345166CP) 264 A.C.W.S. (3d) 853.


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