When Is A Settlement Not A Settlement?

In Kidd v. The Canada Life Assurance Company, 2013 ONSC 1868, a pension plan class action, after a settlement of the litigation was approved, it was discovered that the assumptions about the value of the pension surplus for one of four subclasses, the most populous, were incorrect. As a result, further negotiations ensued and a new settlement was reached. However, the court refused to approve the new settlement.

The parties had campaigned to secure the support of class members for the initial settlement. During this process, the affected subclass members had been told, without being given any guarantee, that they would be sharing 70% of a $55 million surplus. Once the settlement was approved (the "Approved Settlement"), it quickly became evident that this representation of what the subclass was to receive was premised on incorrect predictions and assumptions. As a result, there was a real possibility that there would be no surplus to distribute to the affected