Getting In The Zone – The Court's New Approach To The Settlement Approval Process

In a duo of decisions released this month, Justice Belobaba of the Ontario Superior Court of Justice has called on judges and counsel alike to change the way they approach court approval of class action settlements.

In Ontario, all class action settlements must receive approval from the court under section 29(2) of the Class Proceedings Act. This requirement recognizes that, due to the interests and incentives of the parties at the negotiating table (class counsel and the defendants), there is a risk that the settlement of a class action will result in either a 'sweetheart' settlement (whereby class counsel agrees to settle for less than the case is worth) or a blackmail settlement (whereby the defendants are coerced into settling cases for more than they are worth).