No Work No Pay – Fee Sharing Agreements Are Subject to Court's Review

Class counsel are not permitted to pay off their rival firm using proceeds from the settlement funds in order to avoid competing actions, the Ontario Court of Appeal recently held. This type of payment arrangement was first brought before the Superior Court for approval in the Visa/MasterCard Class Actions, in the form of a fee sharing agreement. Both the Superior Court and the Court of Appeal rejected the agreement on the on ground that it was not in the best interests of the class members.

The Visa/MasterCard Class Actions

Beginning in 2010, a number of class actions were brought in several provinces across Canada, on behalf of merchants who accepted payments by Visa or MasterCard credit cards from their customers. These class actions were identical, each alleging that Visa, MasterCard and several other banks and major financial institutions conspired to fix, maintain, increase or control the merchant discount fees paid by the plaintiff merchants. Three