In this case, the British Columbia Court of Appeal decided that a court has jurisdiction to replace the administrator of a class action settlement where the court has lost confidence in the settlement administrator. Justice Neilson dismissed the appeal, holding that replacing the administrator did not amount to varying or rewriting the terms of the settlement, and thus did not exceed the court’s jurisdiction.
A class action brought against a number of payday loan companies was settled, and the appellants were appointed administrators of the settlement agreement. However, they used the wrong formula for determining the claims of members and failed to respond to over forty claims. After the appellants failed to meet deadlines to rectify the problem, counsel for the class members sought to have them replaced as settlement administrators. The appellants argued that this would effectively rewrite the settlement agreement, a remedy which was not within the court’s jurisdiction.
Justice Neilson agreed with the chambers judge that the appellants did not demonstrate any prejudice arising from their removal and replacement as settlement administrators. This was an administrative matter and immaterial to the substance of the settlement. Under s. 12 of the Class Proceedings Act, the court has the authority to make any appropriate order to ensure the fair and expeditious conduct of a class proceeding. An order to replace a settlement administrator in whom the court has lost confidence is within the scope of that statutory power. Justice Neilson therefore dismissed the appeal.
September 27, 2011
Link to Decision
Zarya Cynader & Sam Golder
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