Accounting for Law

Lerners LLP: Angus McKinnon and Rebecca Case

"Free for Life" has strings attached for lawyers

by Angus McKinnon and Rebecca Case

No, we will not let you go. – Queen, “Bohemian Rhapsody”.

In the latest twist in the long-running attempt to settle Canada Post Corporation’s (“Canada Post”) “Free for Life” internet service program class action, the Quebec Superior Court has refused to permit the current plaintiff’s lawyers to withdraw from representing the plaintiff class, despite the fact that neither the representative plaintiff nor the lawyers wish to continue the relationship.1

BACKGROUND

As readers will recall, this case arises from Canada Post’s marketing of a free lifetime internet service in 2000 and its decision the following year to suspend the provision of this service. Class actions by disgruntled consumers were launched in Quebec, Ontario and British Columbia. While the Quebec Court’s decision on the plaintiff’s authorization (certification) motion was under reserve, a settlement of the Ontario and British Columbia actions was reached. But there was a hitch – Canada Post demanded that this settlement be binding on Quebec residents – who were not part of the initial proposed class in the Ontario or British Columbia proceedings. The settlement was approved by the Ontario Court. When Canada Post sought to have the judgment declared binding by the Quebec Superior Court, who had by then authorized the Quebec class action, the Court refused. This decision was upheld by the Quebec Court of Appeal and the Supreme Court of Canada.2

Over the next 8 years original plaintiff’s counsel was granted permission to cease representation, new counsel was retained, changed firms and was appointed to the Bench, and current counsel then appeared. Throughout this time period, there were ongoing settlement discussions that culminated in an agreement in principle in 2014. However, an impasse surrounding this agreement also arose.

In 2011, after a decade of prosecuting the action, an order was sought and granted permitting original plaintiff’s counsel to withdraw from representation. As part of this application, safeguard orders were sought and granted requiring notice to be given to withdrawing counsel of any future settlement approval hearing as a result, it argued, of its and the representative plaintiff’s obligations to the Fonds d’aide aux actions collectives (“FAAC”).3

Following the appointment of new plaintiff’s counsel, and further settlement discussions the parties agreed to attend a judicial settlement conference. The day before the conference, the representative plaintiff refused to attend and announced his intention to cease serving as representative plaintiff. Following the failed settlement conference and the continuation of negotiations, the representative plaintiff then reversed his position and sought to instruct then plaintiff’s counsel who refused to accept the instructions. Two years later, an agreement in principle was reached settling the class action; however the representative plaintiff refused to sign the agreement unless the safeguard orders in favour of the original counsel were abandoned. The original counsel declined, due to the obligations to the FAAC and presumably to safeguard their financial stake, and the case languished.4

In 2015, upon the appointment to the Bench of the second counsel who had negotiated the agreement in principle, the third, and now current, counsel appeared. When Canada Post agreed to pay the fees and disbursements of the original plaintiff’s law firm in an effort to resolve the impasse, the representative plaintiff again sought to block the settlement leading current plaintiff’s counsel to seek permission from the Court to withdraw from the case. Canada Post and plaintiff’s original counsel opposed the application.5

WHAT IS THE RELATIONSHIP OF PLAINTIFF’S COUNSEL TO THE CLASS?

Justice Gérard Dugré noted that there was no Quebec jurisprudence directly on point. In U.S. and Canadian common law case law and commentary a plaintiff class action lawyer is in a lawyer/client relationship with the whole class once the action is certified and the lawyer owes a fiduciary duty to all class members.6 While noting that Quebec case law only extends the lawyer/client relationship to those class members who have “shown an interest in the action”, Justice Dugré accepted that it was the court’s role to protect the interests of passive class members.7

WHEN CAN THE RELATIONSHIP END?

Turning next to the law surrounding the right of a lawyer to cease representing a client, Justice Dugré determined that before granting leave to withdraw to a plaintiff’s lawyer in an authorized class proceeding, the court must ensure it does not lead to prejudice to the representative plaintiff or class. It is necessary for such a lawyer to establish a ‘serious reason’ for their withdrawal, that it was not an ‘inopportune time’ and that it was not ‘contrary to the sound administration of justice’.8

In the case before him, Justice Dugré found that none of these conditions were met. Despite the current counsel expressing the view that it was “impossible for them to continue to represent [the representative plaintiff] validly”9 and the representative plaintiff’s own declared desire to no longer be represented by the lawyer due to the difference of opinion concerning the proposed settlement, Justice Dugré found that the plaintiff’s lawyer’s duty to act in the best interests of the class prevented them from withdrawing.10 In addition, based largely on the length of time since the proceeding was instituted and the agreement in principle reached, Justice Dugré found that it was an inopportune time, was not in the interests of justice and could cause prejudice to the class, which the Court had the duty to avoid.11

Thus, despite the fact that the lawyer and the representative plaintiff no longer wished to continue their relationship and with only former counsel and the defendant opposing the application, Justice Dugré ordered the lawyer/client relationship to continue, paving the way for a settlement approval hearing at which it can be anticipated the representative plaintiff will oppose approval being granted. Assuming the settlement is approved, it will be interesting to see whether it contains terms that are materially better than the ones the Supreme Court held were not binding on Quebec class members over eight years ago.

The content contained in these blogs is intended to provide information about the subject matter and is not intended as legal advice. If you would like further information or advice on any of the subjects discussed in a blog post, please contact the author.


 1Lépine c. Société canadienne des postes, 2016 QCCS 5972 [Lépine]. Please note that this blog is based on the unofficial English translation of this case.
2Lépine at paras 10-16; Lépine c. Société canadienne des postes 2005 CanLII 26419 (QCCS); aff’d 2007 QCCA 1092; aff’d 2009 CSC 16.
3Lépine at paras 22-23.
4Lépine at paras 18-21, 24-27.
5Lépine at paras 29-37.
6Lépine at paras 45, 49.
7Lépine at para 50.
8Lépine at paras 70-72.
9Lépine at para 74.
10Lépine at para 76.
11Lépine at paras 77-79.

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