"Absurdly High" or "Just Reward"? - the decision on lawyers' fees

The finalizing hearings to resolve the lawsuits against tobacco companies ended shortly after noon today with a discussion of how much the lawyers representing the Quebec class actions should be paid.*

In theory, the fees of all three class actions were under discussion. In reality, the only question before the court was whether approval should be given to the $900+ million fee requested by the lawyers for the Quebec class action.

Their request had been filed more than a month ago, and the arguments in favour of it presented to Chief Justice Morawetz soon after. The review of their request was interrupted for a few weeks by Chief Justice Morawetz' decision to ask a former Quebec judge to act as an amicus curiae. The Hon. André Prevost was mandated to provide "a purely legal and academic description of the applicable test under Quebec law" as well as some advice on how to apply this to the current circumstances.

André Prévost filed his report in late February. This morning he presented his findings, beginning with the caution that the decision in this case -- whatever it was - would set a landmark for class action fees in other mega fund cases. 

He presented the rules that govern lawyers' fees in Quebec (Code of Professional Conduct, s. 102), court rulings on assessing class action fees (e.g. A.B. c. Clercs de Saint-Viateur du Canada, para 64-65), and recent reflections of academics on the subject of fee levels. His review of other cases across Canada, presented as schedules to his report, showed that the fee request under review was consistent with past practice. He cautioned that fees which encouraged large lawsuits are needed in a class action business environment where lawyers feel they are "better to take on smaller cases where the judge is unlikely to be shocked" by the fee. 

In short, if Justice Morawetz had been hoping for some comfort or support in turning down the fee request, he would have had to look hard in the report of the amicus curiae.

Yet it seemed that a reason to cut was what Justice Morawetz was looking for. Not because he thought the work had not met the criteria for reward  -- he described the endeavour as "spectacular" - but because $900 million might be "absurdly high". 

"One of the things that I have to consider is 'what is the objective of class proceeding  legislation compensation for lawyers – is it to create a fund for generations to come?'"

A backdrop to the decision imposed on the court is that the ruling will set a precedent for future mega-tort cases -- even though the likelihood of a parallel case is considered remote. Mr. Prévost acknowledged the challenge in his closing comments to the judge: "I am happy to be in my shoes and not in yours. In this case if you compare to all other cases, this is extreme. Counsel has 100% on all factors [to justify honouring their contracted fee]. This was a huge case – we will probably not have many such cases in Canada."

Quebec counsel: a fair and principled fee request

Counsel to the Quebec class action used the opportunity to respond to the Prévost report to repeat and emphasize some arguments to support their request. He batted back the idea that the fee would not be fair to the class members (who have voiced no objection, despite being canvassed). He rejected the idea that the fee would make lawyers look unreasonably profit-seeking or otherwise diminish the reputation of the legal profession, and said that their case had the opposite effect.  

At the end of these remarks, Chief Justice Morawetz asked what would happen if the fee were reduced. The answer (provided also by Ontario counsel later in the day) was that the provinces would be the recipient of any money that was not needed to pay legal fees in the (likely) case that there were enough funds to cover all of the claims made by class members. 

Cancer Society: A unique achievement

The last intervention in the day was by counsel for the Canadian Cancer Society. He identified that the Quebec case was "beyond the grid" of the table of other "mega-fund" cases that had been discussed earlier in the morning. "There has been nothing like it. There may never again be anything like it. .. It has enhanced the reputation of the profession. They have achieved what no one else has ever achieved going back to the 1950s - and against impossible odds. Their unique legal story will lats in Quebec, Canada and globally."

No public arguments in favour of a reduced fee

Although counsel for the Quebec government had originally raised concerns about the size of the fee, they withdrew any objection after the appointment of Mr. Prevost. If Justice Morawetz received any other recommendations or reasons to over-rule the contracted fee in this class action, they were not directly expressed before him in these proceedings. 

The mediator in this case -- former Chief Justice Warren Winkler - has played a major role over the past 6 years and is authorized to speak privately to the judge. His views on the fees are not on the public record. 

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 *Disclosure: The staff of Physicians for a Smoke-Free Canada were among those who worked on a contingency basis for the counsel to the Quebec class action.