Representative plaintiffs ought to be rewarded for their efforts

Class Action /
Margaret Waddell
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By Tony Poland, LegalMatters Staff • A court decision denying a representative plaintiff an honorarium because her participation in a lawsuit wasn’t deemed exceptional is a “poor development in the law,” says Toronto class-action lawyer Margaret Waddell.

Earlier this month, Ontario Superior Court dismissed a request in Makris v. Endo International PLC for a $15,000 honorarium to be paid to the representative plaintiff in a $700,000 lawsuit involving a global pharmaceutical company. 

According to the decision, such payments are meant to be “exceptional” and are “rarely done.” 

“A representative plaintiff is not entitled to an honorarium ‘simply because the representative plaintiff has done what is expected of him or her’ as ‘an active and involved plaintiff who will be familiar with the proceedings, instruct counsel, monitor settlement discussions and generally act as any private client would in supervising his or her litigation,’” the judgment states. “An honorarium is awarded only if the representative plaintiff ‘has gone well above and beyond the call of duty.’”

Important role

However, Waddell, a partner with Waddell Phillips Professional Corporation, says representative plaintiffs play an important role in class action suits and deserve to be compensated if the action results in compensation for the class

“This a poor development in the law when we seemed to have been trending the opposite direction. It is another disincentive against people coming forward and taking on the role of a representative plaintiff,” she tells LegalMattersCanada.ca. “To be a representative plaintiff is a big job involving a time commitment of hundreds of hours as well as the notoriety that comes with it. If the court is signalling that someone is not going to be compensated for taking on that kind of a burden unless they do something extraordinary, then it’s just another barrier that’s going to discourage people from becoming representative plaintiffs.”

Waddell says the theory behind granting an honorarium to a representative plaintiff “is one of restitution.”

“They are performing tasks that none of the other class members have to do. They should be compensated because they have to work, not just on their behalf, but for the benefit of everyone in the class, and that work involves things like taking on what is a very public role,” she says. “There’s notoriety with their name being attached to litigation.”

Waddell says a representative plaintiff could be expected to review copious amounts of background material, give instruction and help to identify class members. They may be involved with communicating with the other class members and could miss time from their job to fulfil their duties. Because they are the public face of the lawsuit, they risk media scrutiny and exposure on the internet. They are also called to testify in court.

“You have to subject yourself to being cross-examined by very serious and thorough defence counsel. That is not a fun experience. Why would anybody volunteer for that when their damages in the case may be just a few hundred dollars?” she asks. “There’s all these different things that are extraordinary that representative plaintiffs subject themselves to while the other class members get to sit back and wait for a cheque at the end of the day.

“It is for all of those reasons that I say that it’s appropriate that in most cases the representative plaintiff ought to be provided with a modest honorarium without having to meet the higher threshold of exceptional circumstance,” Waddell adds.

Degree of involvement

She says lawyers will generally recommend a certain amount to be paid to a representative plaintiff “and the numbers are wildly disparate,” depending on the degree of involvement of the plaintiff.

In Makris v. Endo International PLC, the court ruled that in considering case law, “evidence did not establish any exceptional circumstances justifying an honorarium.”

“Her evidence is only that she (i) reviewed the different versions of the statement of claim, (ii) read or was informed about expert reports, (iii) provided instructions to counsel on the leave motion and settlement issues, (iv) assisted in the drafting of material for the leave motion and the settlement approval motion, and (v) ‘took some time off’ to meet with lawyers to discuss the progress of the action.”

‘Really is subjective’

Waddell says deciding what participation is exceptional “really is subjective.”

“How do you decide? Why would an honorarium be justified in one case and not the other?” she asks. “I agree that for compensation exceeding $10,000, the efforts should be exceptional.

Waddell notes that in cases where the representative claimants have been “vigorously involved in the litigation, in finding the class members, in working with experts and in taking an active role throughout, judges have awarded the larger sums.”

She says it is “troubling” that the court seems to “to be signalling a return to a more onerous test.”

“I am concerned because I don’t think it reflects a reasonable view of what the role of a representative plaintiff is,” Waddell says. “We should get rid of the idea that it should only be awarded in exceptional circumstances.”