Introduction
When deciding between two duplicative class action proceedings on a motion for carriage, the court will assess several of the proceedings’ characteristics to determine which represents the best interests of the class members. It would be easy to assume that in a contest between a large, well-known firm that specializes in class actions and a small, boutique firm with limited class action experience, the former will be the more likely choice. However, in Strohmaier v British Columbia (Attorney General) [Strohmaier], 2018 BCSC 1613, the court clarified that, when assessing the quality of proposed class counsel, it will look beyond the superficial characteristics of the law firms to consider the quality and experience of class counsel; including any history of misconduct.
Case Overview
In Strohmaier, the court was tasked with deciding between two proposed class proceedings that advanced similar claims against British Columbian agencies for failing to pursue compensation on behalf of injured minors. The plaintiffs in one proceeding, Stacie Vanessa Strohmaier and Dawn Sam v British Columba (Attorney General) (the Strohmaier Proceeding), were represented by Merchant Law Group (MLG), while the plaintiffs in K.S. v British Columbia (Attorney General) (the K.S. Proceeding) were represented by Acheson Sweeney Foley Sahota LLP (Acheson).
In deciding that the best interests of the class members were served by granting carriage to Acheson, Justice Skolrood considered four proceeding characteristics: (i) the quality of the representative plaintiffs, (ii) the preparation and readiness of the proceedings, (iii) the proposed case theories, and (iv) the quality of the proposed class counsel.
Justice Skolrood held that he preferred the representative plaintiffs in the K.S. Proceeding to those in the Strohmaier Proceeding. The former were directly involved in moving the litigation forward, while the latter appeared to have played no meaningful role.[1] Additionally, the affidavit of the Strohmaier Proceeding’s representative plaintiff was found to be “troubling” because it was clearly framed by MLG and was largely opinion and argument, not evidence.[2] The affidavit suggested that the representative plaintiff had no “ability or willingness to apply any critical or independent thought with respect to the conduct of the litigation.”[3]
Justice Skolrood next considered the preparation and readiness of the two proceedings, finding that although the Strohmaier Proceeding had been commenced over four years before the K.S. Proceeding, MLG had litigated in a primarily reactionary manner, not pursuing the action with any urgency.[4] Justice Skolrood further noted that the only reason the Strohmaier Proceeding even came before the court was because the defendants brought an application to strike (as opposed to MLG taking steps to move the matter forward), the result of which was that several of the claims were struck, with the court holding that the amended notice of civil claim created “complexity and confusion” and fell “well below an acceptable standard of pleadings.[5] Due to MLG’s failure to advance the Strohmaier Proceeding, both actions were at similar states of readiness as of the motion – a fact that favoured the K.S. Proceeding given its relatively faster rate of progression.[6]
Regarding the case theories advanced in the two proceedings, Justice Skolrood found that both theories provided class members with adequate access to justice and the factor did not favour one proceeding over the other.[7]
Finally, regarding the quality and experience of class counsel – the most significant factor in the carriage analysis – MLG argued that its status as an “experienced and well-known class action law firm,” gave the Strohmaier Proceeding a clear advantage.[8] However, Justice Skolrood, wary of the proceeding devolving into a ‘beauty pageant’, looked beyond the firms’ size and experience to a factor more indicative of the quality of representation that the class members were likely to receive – MLG’s history of misconduct.[9]
Noting that there were several decisions that comment on MLG’s conduct, Justice Skolrood highlighted two in particular: Chudy v Merchant Law Group [Chudy], 2007 BCSC 279, and Drover v BCE Inc. [Drover], 2013 BCSC 50. In Chudy, MLG was held to have breached its fiduciary duty owed to former clients by relying on evidence it knew to be false and by “unreasonably increas[ing] the costs to [its] former clients in seeking to obtain redress,” – conduct found to be “both outrageous and scandalous.”[10] Similarly, in Drover, the court imposed a costs award directly against the principal of MLG, because the firm “neglected [the] action for over 8 years,” and ultimately produced a “shoddy piece of counsel work.”[11]
In light of MLG’s history of misconduct, and the fact that Acheson, though smaller, was deemed fully capable of prosecuting the K.S. action, Justice Skolrood found that the quality and experience of counsel factor favoured the K.S. Proceeding “by a large margin.”[12]
Justice Skolrood stayed the Strohmaier Proceeding and granted carriage to Acheson and the K.S. Proceeding.[13]
Practical Implications
This decision presents three practical implications.
First: carriage motions will not be decided based on the size, or name-recognition, of class counsel. Carriage motions are not beauty pageants. MLG’s argument that its proceeding should have been granted carriage because of the firm’s status as a well-known, experienced class actions law firm fell largely on deaf ears.
Second: firms that file placeholder claims, but subsequently fail to advance the litigation, are at risk of being replaced. On a carriage motion, that one proceeding was initiated prior to the other will not be as important as proactively taking steps to move the action forward.
Third: on carriage motions, the conduct of the competing law firms will not be assessed within the vacuum of that particular litigation. Any history of past misconduct may well fall within the scope of what the court finds relevant, and may disentitle class counsel to carriage.
ABOUT THE AUTHORS
Ashley Paterson’s commercial litigation practice at Bennett Jones LLP focuses on class action litigation, product liability litigation, consumer protection litigation and other complex corporate disputes.
John Rawlins is a commercial litigation associate at Bennett Jones LLP
[1] Strohmaier v British Columbia (Attorney General) [Strohmaier], 2018 BCSC 1613 at para 36.
[2] Supra note 1, Strohmaier at para 37.
[3] Supra note 1, Strohmaier at para 37.
[4] Supra note 1, Strohmaier at para 40.
[5] Supra note 1, Strohmaier at paras 12-13 and 41.
[6] Supra note 1, Strohmaier at para 40.
[7] Supra note 1, Strohmaier at para 48.
[8] Supra note 1, Strohmaier at paras 50, 51.
[9] Supra note 1, Strohmaier at paras 54, 59.
[10] Chudy v Merchant Law Group, 2007 BCSC 279 at paras 232, 252 and 257.
[11] Drover v BCE Inc., 2013 BCSC 50 at paras 62-63.
[12] Supra note 1, Strohmaier at paras 58, 77.
[13] Supra note 1, Strohmaier at para 78.
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