Court approves settlement of $ 100 million class action lawsuit against BMO over foreign exchange fees
The settlement follows a court ruling in 2020, which found that “BMO’s defendants were liable to the group during the 10-year class action period for breach of trust, breach of fiduciary duty and breach of contract, and concluded that the appropriate remedy for the wrongdoing of the defendants was recognition and restitution of profits.
Ultimately, the two sides agreed to a $ 100 million settlement, which will be paid to approximately 135,000 affected customers, subject to a minimum of $ 25, with the defendants paying the distribution costs.
The court awarded the plaintiffs’ attorneys $ 20 million in fees and $ 50,000 to a former counsel who helped bring the case forward.
The court said approval of the settlement was easy, as the $ 100 million amount “falls well within the required reasonableness area” and the resolution is “fair and reasonable and in the best interests of the group.”
On the more difficult issue of legal fees, the court ruled that $ 20 million was appropriate, saying that in a ‘mega’ settlement like this, “approved legal fees must take into account not only the risks involved and the results. obtained, but also of the need to maintain the integrity of the legal profession.
In that case, class attorneys requested $ 25 million in fees, reflecting their 25% contingent allowance.
However, the court said that simply applying a contingency fee percentage in the mega-settlements “can lead to unwarranted gains and turn a class action lawsuit into something akin to a lottery.”
Ultimately, after considering the risks involved and the results obtained by the litigation, “the most that this court can justify and explain in a principled manner consistent with comparable case law is an award of legal fees which is in a range of $ 18 million to $ 20 million, ”the ruling reads.
“The correct figure may well be around $ 19 million,” the court said. “However, given that this was a truly self-taught class action suit that took 15 years of litigation, 10,000 hours of logged time and resulted in a truly laudable settlement, I am willing to err on the side of caution and in favor of class counsel. “
The plaintiffs ‘representatives in the case also received a combined sum of $ 70,000, of which $ 10,000 went to each of the two plaintiffs’ representatives and $ 50,000 to a third plaintiff – James Richard Macdonald, a former adviser to Nesbitt Burns, who the court said suffered financial hardship as a result of bringing the case.
Macdonald was “entitled to the additional $ 40,000 because of the financial damage he suffered as a principal plaintiff in what has become a high-profile class action lawsuit in the banking community,” the court ruled.
“His job as an investment advisor became strained and he had to leave the industry long before he reached retirement age,” the court said, noting that although Macdonald eventually found a job teaching finance at a local community college, “his income today is much higher. less than when he worked as an investment advisor.
“I therefore have no difficulty in concluding that Mr. MacDonald suffered significant financial hardship in assuming the role and responsibilities of the lead representative plaintiff. The request for fees of $ 50,000 is more than justified, ”said the court.