By Catherine Yue
On March 3rd, 2022, when Justice Akbarali approved an honorarium in Redublo v CarePartners, she added yet another chapter to the long-standing debate of whether honorariums are an appropriate element of the class action landscape in Ontario.
What are honorariums and what is their significance?
Every class action has at least one representative plaintiff who must be willing to step forward and be named as the plaintiff in the lawsuit. According to section 5(1)(e) of the Ontario Class Proceedings Act (CPA), a representative plaintiff must fairly and adequately represent the interests of the class, must not have conflicting interests with the other class members on any of the common issues, and must have a workable plan for how the action will proceed.
If the class action is successful, class counsel may recommend that the representative plaintiff receive an honorarium, a monetary reward for the work they have done to advance the litigation on behalf of the class. The judge tasked with approving the settlement ultimately decides if an honorarium should be paid. The reasoning behind the concept of honorariums is directly linked to the fact that representative plaintiffs are unlike other members of the class. They may have experienced the same wrongs as the class but the representative plaintiff is expected to perform additional duties without the anonymity enjoyed by other class members.
In Ontario, the representative plaintiff is the only class member who may be liable to pay the defendant’s legal fees if the action is unsuccessful. Furthermore, the representative plaintiff must subject themselves not just to the defendant’s cross-examination and scrutiny but also to potential media attention. The representative plaintiff is also tasked with additional duties such as reviewing documents produced for the litigation, leading communications with class members and directing class counsel. These are tasks that take considerable time and effort which theoretically could have been spent on income-generating activities instead. Yet, at the conclusion of the class action, the representative plaintiff is not entitled to receive more compensation than the class members – many of whom may only need to fill out a claims form to receive that compensation.
The Ontario courts have recognized the unique burdens of a representative plaintiff and have therefore exercised their discretion to order that honorariums be paid to the representative plaintiff. While payments can be as high as $50,000, Ontario courts have typically awarded between $5000-$10,000.
However, it is important to note that honorariums are not given to all representative plaintiffs and in fact, there is a certain threshold that must be satisfied. Justice Perell stated in Hodge v Neinstein that these monetary awards are only to be given in “exceptional circumstances” where a representative plaintiff has spent considerable effort and time to be actively involved in the litigation while also taking into account any significant hardships they may have experienced due to the case.
The debate around honorariums and their proper threshold
Pursuant to section 5(1) of the CPA, representative plaintiffs have a duty to protect the interests of the class members. According to Justice Perell in Doucet v Winnipeg Ballet, this duty is inherently inconsistent with the concept of being paid. Despite previously approving of honorariums, Justice Perell has decided that he does not believe the practice can continue for the following reasons:
- Honorariums amount to paying the representative plaintiff for legal services which is contrary to the policy of the administration of justice
- Awarding litigants for matters like being a witness is not allowed
- Considering the phenomenon of entrepreneurial class counsel, a representative plaintiff must act as a check and balance and therefore, their instructions cannot be tainted by their own self-interest in receiving benefits which are not received by the class. The potential of collusion with class counsel is greater when individual benefits are involved.
- Awarding honorariums can create repugnant competition and grading of the value of contributions from representative plaintiffs in other actions.
In contrast to Justice Perell, many academics and judges have argued that honorariums are an appropriate acknowledgement of the efforts of the representative plaintiff. Professor Vince Morabito has gone as far as to say that not awarding honorariums is irreconcilable with basic notions of fairness and risks undermining class actions because fewer people will step up to be representative plaintiffs. He further argues that honorariums can incentivize representative plaintiffs to be involved in a meaningful way and therefore act as a check and balance to entrepreneurial law firms. Catherine Piché (now a judge of the Quebec Superior Court) builds on this argument, noting that the quality of participation by the representative plaintiff can directly influence access to justice and the fairness of outcomes in the action.
Further proponents of honorariums can be found in the B.C. Courts which position themselves opposite from Justice Perell. The decision in Parsons v Coast Capital Savings concluded that a representative plaintiff does not need to perform services of special significance beyond their usual responsibilities to receive an honorarium. As long as they have fulfilled their duties in a successful settlement, a modest reward is appropriate, thereby utilizing a “competent” threshold rather than “exceptional”.
Other judges in Ontario have also weighed in. In spite of Justice Perell’s decision, Justice Belobaba subsequently awarded honorariums in Kalra v Mercedes Benz, making no mention of the Doucet case. In Redublo, Justice Akbarali directly addressed and refuted Justice Perell’s arguments. Justice Akbarali ultimately concluded that honorariums should continue because they can directly advance the objectives of the CPA, particularly in terms of upholding access to justice and making sure the representative plaintiff is not unduly prejudiced.
Both Doucet and Redublo are decisions of the Superior Court of Ontario and thus, the law in Ontario remains uncertain with two opposing decisions. This may be the situation that remains until a higher court makes a ruling on the issue. With that said, if the actions of Justices Akbarali and Belobaba are any indication, it seems that the door to honorariums remains askew.