Settlement Approval: Cy-Près Settlement Gets Different Reception In BC And Ontario

• Published date: 23 March 2021
• Subject Matter: Finance and Banking, Litigation, Mediation & Arbitration, Financial Services, Class Actions, Trials & Appeals & Compensation
• Law Firm: McCarthy Tétrault LLP
• Author: Canadian Class Actions Monitor, Katherine A. Booth, Lyndsey Delamont, Lindsay Frame and Colleen Bonnyman

Can a settlement be approved even if the plaintiffs receive nothing? Recent class action decisions from the British Columbia Supreme Court and the Ontario Superior Court confirm it can. In Emond v Google LLC, 2021 ONSC 302 ("Emond"), Justice Morgan framed the issue as follows:

This motion raises an important question of policy for class actions: what is a court to make of a settlement that results in payment to class counsel and to a cy-près recipient, but absolutely nothing in compensation to the supposedly injured members of the class?¹

The parallel privacy class action claims in Emond and Chartrand v Google LLC, 2021 BCSC 7 ("Chartrand") are important for the following three reasons:

• These cases affirm that courts may approve settlements for meritless class action claims brought in good faith-even if the settlements provide no direct recovery to the class;
• As the courts in British Columbia and Ontario courts took differing views in respect of the same settlement, Emond and Chartrand demonstrate that cy-près distributions in multi-jurisdictional class proceedings may be treated more or less critically, depending where the settlement approval motion is decided; and
• Emond confirms that courts may use reductions to class counsel fees as a tool to disincentivize the filing of risky, tactical claims with little chance of success.

The Facts

Chartrand (the lead action, brought in British Columbia) and Emond (brought in Ontario) were parallel privacy class actions. Lima v Google LLC ("Lima") was also brought in Quebec, but the settlement approval hearing has not yet been held. The claims alleged that Google had, without the consent of smartphone users, non-consensually collected and transmitted certain smartphone data through a feature built into Android smartphones, and that such data could be used to identify them or their location. The evidence filed for certification made it apparent that the subject information was transmitted to Google over the course of 2017 for the purpose of a network congestion identification project, and only a small fraction of it was ever collected by entry into a log. Google later terminated the product and disabled the feature at issue at the end of that year.

Critically, class counsel learned after reviewing the expert reports that not only were no individuals identified by the data Google collected, but "none could be identified" from the data.² Class counsel quickly realized that the claim was unworkable as a class proceeding. The impossibility of identifying class...