In a scathing decision in June in which he opened up the larger question of how class-action lawyers are compensated, Belobaba also railed at part of the deal under which lawyers who acted in Federal Court would collect half the fee total — $37.5 million — while the other half would go to the lawyers who had acted in Superior Court.
The lawyers in the Federal Court action, however, made no such concession. They maintained, and still do, that Federal Court Judge Michel Shore, who was handling the matter, had signed off on the settlement on May 11, including the fee arrangement he called fair and reasonable. They nevertheless went back to Federal Court for one more judicial sign-off in light of the change on the Ontario end of the settlement.
However, the following day, after Belobaba had received a copy of the order, Phelan sent a note to the Federal Court parties in which he said his approval applied to the Scoop agreement “other than fees.”
Almost a week later, Phelan questioned whether he could even rule on the fee issue.
“In light of Justice Shore’s decision approving fees, what jurisdiction does the court have to consider the issue?” Phelan wrote.
In response, lawyer Celeste Poltak with Koskie Minsky in Toronto wrote Phelan to say there never was any new request for the judge to rule on the fees because “the amount was already approved by Justice Shore and Your Honour.”
Nevertheless, in a case conference call Thursday, Phelan again asked for submissions before Aug. 31 on his authority to deal with the fee issue, and promised to render a decision within a week or so of that date, said Kirk Baert, another lawyer involved in the case.
In his decision in June, Belobaba was effusive in praising Wilson, whose small firm took on “enormous” risk by filing the case in 2009 and then put in millions of dollars in time without any guarantee of success.
At the same time, the judge slammed “opportunistic” class-action lawyers who had acted in Federal Court, saying he was “stunned” they had admitted to collecting $10 million in fees for essentially having done not much at all.
In all, Belobaba said, the total legal bill should have been around $37.5 million — half what was agreed to — of which the Federal Court lawyers deserved no more than $12.5 million.
It now remains to be seen whether Phelan makes any changes to the fees and what Belobaba will decide regardless of what happens in Federal Court.