Sharing Is Caring … Or Maybe Not? Ontario Judge Refuses To Approve A Class Action Fee Sharing Agreement

On May 25, 2016, the Court of Appeal for Ontario will hear the appeal in Bancroft-Snell v Visa Canada Corporation, where Justice Perell held that a fee sharing agreement between class counsel and another law firm that had commenced rival class action proceedings was "unauthorized, unenforceable, and possibly illegal [para. 64]".

By way of background, a consortium of law firms ("Class Counsel") commenced class proceedings in 2011 in several provinces, including Ontario, on behalf of a proposed national class against MasterCard International Incorporated, Visa Canada Corporation and most of the major financial institutions in Canada (collectively, the "Defendants"). It was alleged that the Defendants engaged in a price-fixing conspiracy in respect of the "merchant discount fees" that apply to retailers on Visa and MasterCard transactions. A few years after Class Counsel had commenced the British Columbia action, but before they had issued claims in Alberta and