In this certified class action, the Plaintiff, Lorne Waldman (“Waldman”) brought a motion for approval of a settlement of a copyright infringement class action against Thomson Reuters Canada Limited (“Thomson”). The action was commenced because Thomson, through its legal publishing branch known as Carswell, makes available court documents authored by the lawyers who constitute the Class Members. Waldman and Thomson signed a Settlement Agreement which included the following terms: (i) a $350,000 cy-près trust fund to support public interest litigation; (ii) that Thomson would make changes to the copyright notices on its “Litigator” service and to the terms of its contract with subscribers; and (iii) the Class Members receive no monetary award, but they are required to sign a release and grant a non-exclusive license of their copyrights to Thomson. Class Counsel also moved for approval of its contingent fee agreement and for approval of counsel fees. The Settlement Agreement was supported by many different parties, counsel and associations, but was opposed by seven (7) Class Members.
The Court ultimately concluded that the proposed Settlement was “not fair, reasonable, and in the best interests of the Class Members.” The motions for settlement and fee approval were therefore dismissed.
The Court conducted a detailed review of the criteria for settlement approval and applied those criteria to the case at bar. The Court found that while the Settlement Agreement was fair and reasonable for Waldman, Class Counsel and Thomson, it was not fair, reasonable and in the best interests of the Class Members as a whole. The Court agreed with the general sentiment of the objectors to the Agreement that (i) it is more beneficial to Class Counsel than it is to the Class Members; and (ii) in its practical effect, the Settlement expropriates the Class Members’ property rights in exchange for a charitable donation from Thomson. The Court noted that “the purpose of class actions is not to fund worthy projects [i.e. through the creation of the cy-près trust fund] but to provide procedural and substantive access to justice to Class Members.” In this case, the Court felt that there was no access to substantive justice for the claims of the Class Members and no meaningful behaviour modification for Thomson. The Court also held that the “optics of this class action are bad” primarily because Class Counsel was to receive a fee of $825,000 and the Class Members a “notional benefit” of a $350,000 cy-près trust fund. For these reasons, the Court did not approve the Settlement Agreement and, as a result, the question of Class Counsel fee approval was rendered moot.