Avoiding Settlement Stumbling Blocks: Boilerplate Language Not Sufficient

The latest class action settlement approval in Leslie v Agnico-Eagle Mines warns that courts may be willing to intervene to ensure a more adversarial process at future settlement approval motions. Both plaintiffs and defendants should be aware that judges are demanding more robust information as a prerequisite to approving settlements, especially in the context of securities class actions.

Class Action Settlement Approval

Section 29(2) of Ontario's Class Proceedings Act requires that all settlements of class proceedings be approved by the Court as fair and reasonable and in the best interests of the class. Similar provisions are found in other class action legislation across Canada. As Justice Belobaba noted in Leslie, requiring court approval combats the possibility of "sweetheart" settlements, in which class members' interests are compromised to those of class counsel, as well as "blackmail" or strike suit settlements.