The Lawyers Weekly - February 17, 2012

In a class action battle

who comes out on top?

It was predictable that the very public securities law controversy that has surrounded Sino-Forest Corp. would result in a feeding frenzy of class action plaintiffs’ counsel. In the end, at least four separate securities class actions were commenced by three sets of plaintiffs’ counsel. This multiplicity of proceedings triggered an inevitable carriage motion to determine which plaintiffs’ counsel would be granted the opportunity to proceed, and which plaintiffs’ counsel would be left disappointed on the sidelines.

As the plaintiff-side securities class action bar in Canada grows in sophistication and in numbers, this sort of internecine battle is likely to become increasingly frequent and increasingly hard-fought. In that respect, the analysis and decision in the Sino-Forest carriage motion is a preview of things to come.

A carriage motion is a unique proceeding. The court decides nothing substantive and even in the

MARK
GELOWITZ

context of class action procedure, it decides nothing procedural. The court simply decides which one of a group of overlapping class actions goes ahead, and which ones get stayed—based upon the court’s view of which action is most likely to advance the interests of the class. Although this decision is not meant to be a beauty contest among the proposed plaintiffs’ lawyers, the “resources and experience of counsel” are explicit factors in the analysis and can become an important battleground.

The Sino-Forest carriage motion was a three-way tug-of-war between Koskie Minsky and Siskinds (acting as a team), Kim Orr, and Rochon Genova. Ontario Superior Court Justice Paul Perell’s decision granting carriage to Koskie Minsky/Siskinds was released on Jan. 6.

In a detailed 55-page decision, Justice Perell analyzed a series of factors related to the nature of the claims that had been commenced, the proposed representative plaintiffs and the counsel representing them. He held that the determinative factors in the carriage decision were:

n;attributes of the representative plaintiffs; n;definition of class membership; n;definition of class period; n;theory of the case; n;causes of action;