Ontario Court of Appeal: “Monetary Award” Grounding Payment of Class Action Contingency Fee Includes More than Money Distributed to Class Members

Counsel who commence proposed class actions nearly always do so on a contingent fee basis, where payment of class counsel’s fee depends on achieving success for class members. But “success” for the class does not always involve the payment of money into the pockets of class members. When a class action results in a monetary award that benefits class members – even if they have no “right” to that award – can class counsel’s contingency fee be charged against and paid from that award? The answer, according to a majority of the Court of Appeal for Ontario in Jeffery v. London Life, 2018 ONCA 716 (“Jeffery”), is that Ontario’s Class Proceedings Act (CPA) permits this outcome.

Jeffery’s broad and purposive interpretation of the CPA in this regard is welcome news for plaintiffs’ counsel, as it facilitates the prosecution of contingent-based cases where the outcome may amount to success for the class, but not the payment of damages directly to class members. Jeffery is also instructive for defendants’ counsel as it illustrates that, when the outcome of a class action judgment is that a defendant is ordered to move money, these funds may be subjected to first charge in favour of class counsel. This possible outcome may shape future arguments relating to the form of monetary remedies in class actions.