After a four and half year break, almost all of the parties in the Quebec tobacco class actions were again before Quebec Superior Court Justice Brian J. Riordan.
While the issue under discussion was relatively minor, the significance of the day was great. For the first time in this 20+ year saga, money was being transferred in recognition of the harmful actions of Canada's tobacco companies.
Don't get too excited! The payments due to injured Quebec smokers from tobacco companies should by now have been on the way of out the door. But because the Quebec courts can't enforce this order without going against rulings of their Ontario court colleagues, all payments by tobacco companies are suspended.
The sums discussed today result from the bankruptcy of two insurance companies which had once issued policies to Imperial Tobacco Canada and Rothmans, Benson and Hedges. As the story was told in court today (and in more detail in material filed in the Ontario CCAA proceedings), the firms responsible for closing out the insurance company accounts had contacted the class action plaintiffs. A claim was made and, without acknowledgement of entitlement or disclosure of amounts, a settlement was arrived at.
As the judge in charge of this class action, Justice Riordan's job today was to approve this settlement with the now-defunct Kansa and Northumberland insurance companies, and also the wording of a notice to inform class action members of this development.
Were trial developments not hog-tied by CCAA proceedings, he would also have been asked to approve how the money would be spent. The sums transferred today (by deduction at least $1 million) is said to be too small to distribute to class members. Instead, the lawyers are proposing to start reimbursing the Quebec government fund which advances payments to class actions that are in the public interest (the Fonds d'aide d'actions collectifs), and to reach out to potential class members.
No approval for disbursement was on the cards today. Whether any money can be spent while there is a stay on proceedings has been contested by Imperial Tobacco and RBH in Justice McEwen's Toronto court. Another judge -- former chief justice Winkler -- is mediating the dispute. So many billable hours!
A different room. A different mood.
In comparison with the hundreds of days of acrimonious trial reported here, today's hearing was relatively cordial and considerably scaled back. Smaller court room. Lower voices. Even some smiles!
The regular crew from the class action side was on hand, with a representative of each of the law firms that has worked together for so many years. Joining them was the fifth firm that has come on board , insolvency experts Fishman, Flanz, Meland, Paquin.
The defendant tobacco companies had switched their line up. Eric Préfontaine has represented Imperial Tobacco in this case at the Appeal Court, but this was the first time (I think) that he was before Justice Riordan. RBH had sent Jean Lortie, and JTI-Macdonald stayed at home.
Business quickly done.
The issues debated today were, to these ears, minor wording choices related to the motion pasted below.
Justice Riordan was asked to consider wording to address the potential of courts (CCAA or class action) to break the seal and disclose the amount of the settlement, also also whether class members were to be informed that their rights were not being affected or not substantially being affected.
Within 90 minutes - including a lengthy break -- this business was done. Justice Riordan agreed with the first 7 requests made this morning, but will hold off signing anything until May 14th, with the expectation that an agreement or decision will be communicated from Toronto.
Meanwhile, the business that is not being done.
What didn't happen today is probably more significant than what did.
Today was the last day of the usual 60 day period for those who lose a case to seek leave to appeal at the Supreme Court. Justice McEwen was asked to make this a meaningful deadline, but instead chose to exercise his discretion to restart this clock after the CCAA proceedings are over.
Another 60 day deadline set in the recently-upheld decision was an obligation on the class action lawyers to provide the judge with some suggestions on a way to process claims. This deadline too has been frozen by the CCAA proceedings.
Another thing that likely didn't happen today was any further work up by Ontario towards the hearings it had expected in June. As was expected, Justice McEwen issued a quick 'zap-you're-frozen' rejection to this request. He had promised to do so on Monday, but issued it only an hour or two after the hearing concluded last Friday.
Obiter dicta
A lot of water has flowed under the bridge since the last face-to-face meeting among this judge and these parties. And there is a lot of remaining business -- like establishing eligibility requirements and payment methods for class members, or resolving the unfinished issues from the trial (abuse of process anyone?). Lots to talk about over dinner, perhaps, but very little space for exchange between judge and lawyers this morning.
Nonetheless, Justice Riordan let it be known that he is hopeful for a settlement. He expressed his personal admiration of former Ontario Chief Justice Winkler. He said it was in the best interests of all the parties, including the companies, he said, to settle and get this over with. "Lots of dollars, perhaps, but it would put some certainty in the situation and let people start getting paid something. That’s the objective."
1. GRANT the present Motion;
2. ORDER that the Settlement Agreements remain under seal and that the settlement amounts payable thereunder not be disclosed;
3. ORDER the electronic notification of the attached Notice to all persons registered on the Class Counsel database who have submitted an email address;
4. APPROVE the settlement agreement dated July 4, 2017 (Exhibit P-1 under seal) entered into between Kansa General International Insurance Company Ltd., Ferdinand Alfieri, in his capacity as liquidator of Kansa General International Insurance Company Ltd., Jean-Yves Blais (now deceased) and Conseil Québécois sur le Tabac et la Santé, in their capacity as class representatives in Court File number 500-06-000076-980 and Cécilia Létourneau, in her capacity as class representative in Court File number 500-06-000070-983;
5. APPROVE the settlement agreement dated February 16, 2017 (Exhibit P-3 under seal) entered into between Northumberland General Insurance Company, through its liquidator PricewaterhouseCoopers Inc., Jean-Yves Blais (now deceased) and Conseil Québécois sur le Tabac et la Santé in their capacity as class representatives in Court File number 500-6-000076-980 and Cécilia Létourneau, in her capacity as class representative in Court File number 500-06-000070-983; and
6. AUTHORIZE Class Counsel to withdraw from the Court record Exhibits P-1 and P-3;
7. ORDER that the proceeds of the Settlement Agreements be paid to Fishman Flanz Meland Paquin LLP in trust (“FFMP”), as contemplated in the Settlement Agreements, and forthwith thereafter transferred by FFMP to the Trust account of the law firm Trudel Johnston & Lespérance;Under negotiation:
8. AUTHORIZE Class Counsel to use $ 500,000 of the proceeds of the Settlement Agreements to maximize the take-up rate in the class actions.
9. AUTHORIZE Class Counsel to use the balance of the proceeds to reimburse the Fonds d’aide aux actions collectives for the financial aid provided in the class action proceedings.
10. ORDER an accounting of the use of the proceeds of the Settlement Agreements before the Court;
11. GRANT provisional execution of the present judgment notwithstanding appeal;
12. THE WHOLE without costs.
