Assessing Fees When Class Actions Follow Government Action

AuthorMisha Boutilier
Assessing Fees When Class Actions Follow
Government Action
Misha Boutilier
: The Supreme Court of Canada’s Sun-Rype and Fischer deci-
sions have recently focused attention on the relationship between
public enforcement and private class actions. This essay considers an
under-studied aspect of that relationship; namely, how courts should
calculate fees in a class action that follows and benef‌its from a prior gov-
ernment enforcement action. The author contends that class actions that
follow government actions are less risky for class counsel and are inferior
to independently initiated class actions at ensuring behaviour modif‌ica-
tion and access to justice. Accordingly, the author argues that Canadian
courts should follow the US Courts of Appeals for the Second and Third
Circuits and adopt a specif‌ic rule governing fees when class actions fol-
low government action. This rule would both reward plaintif‌fs’ attorneys
who independently initiate class actions with increased fees, and would
reduce fees for class actions that follow government action in propor-
tion to the benef‌it that class counsel receive from the prior government
action. This rule will allow courts to appropriately assess risk in light of
the reduced-risk prof‌ile that class actions that follow government action
generally present. It will also encourage independently initiated class
actions and thus help ensure behaviour modif‌ication and access to jus-
tice for wrongs in cases of government inaction.
CCAR 14-2.indb 279 1/8/2019 10:57:38 AM
CCAR 14-2.indb 280 1/8/2019 10:57:38 AM
Misha Boutilier*
The Supreme Court of Canada’s decisions in Sun-Rype Products Ltd v
Archer Daniels Midland Company1 and AIC Limited v Fischer2 focus atten-
tion on the relationship between public enforcement and private class
actions. As the recent Volkswagen emissions testing scandal and the
ongoing air cargo price-f‌ixing class actions illustrate, government inves-
tigations and enforcement action can spark class action litigation.3 The
* JD with Distinction (University of Toronto). The author wishes to thank Michael E
Eizenga and Ranjan K Agarwal for the assistance and encouragement they provided
through the Class Actions Law and Practice course which the author took in fall
2017. The author is also grateful to Professor Albert H Yoon for providing feedback
and encouragement on the outline.
1 Sun-Rype Products Ltd v Archer Daniels Midland Company, 2013 SCC 58 [Sun-Rype].
2 AIC Limited v Fischer, 2013 SCC 69 [Fischer SCC].
3 For background on the Volkswagen scandal, see Russell Hotten, “Volkswagen:
The Scandal Explained” BBC News (10 December 2015), online:
news/business-34324772. For the Canadian car purchaser class action settlement,
see Quenneville v Volkswagen, 2017 ONSC 2448. Air cargo price-f‌ixing class actions
followed investigations by competition regulators in Europe, the United States, and
Canada that led to guilty pleas and criminal f‌ines. See Brent Jang, “Airlines Fined
$1.1 Billion over Cargo Price-Fixing Cartel” Globe and Mail (10 November 2010) B12;
Canada, Competition Bureau, “British Airways Pleads Guilty in Air Cargo Price-Fix-
ing Conspiracy” (30 October 2009), online:
cb-bc.nsf/eng/03147.html. The Canadian class action was certif‌ied in 2015: see Airia
Brands Inc v Air Canada, 2015 ONSC 5352. The Court of Appeal for Ontario recently
held that absent foreign claimants should be included in the Canadian class action:
CCAR 14-2.indb 281 1/8/2019 10:57:38 AM

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