Class Action Update (May 18, 2010)

Class Action Update (May 18, 2010)

What is the lawsuit about?

Ontario’s motor vehicle licence issuers have complained of under-compensation for many years.

The purpose of this lawsuit is to determine whether Ontario has breached its contractual obligation to pay issuers fairly and reasonably. The Statement of Claim also seeks recovery for unjust enrichment if it is found that Ontario has benefited from the work of issuers without adequately compensating them.

Where can I find the Statement of Claim?

The Statement of Claim is available for review on Sotos LLP’s website at

What is the status of the lawsuit?

The lawsuit was commenced on October 23, 2009. We have not yet received any statement of defence.  Ontario will not be required to deliver a statement of defence until after the court has decided whether or not this action can proceed as a class action.

What is the next step in the lawsuit?

The next step in this action is to certify it as a class action. In order for an action to proceed on behalf of a “class” of people, a judge must decide whether the members of the proposed class have common issues, and whether a class action is the preferred way to resolve the issues.

The court will hear argument on whether the case should be certified as a class action on June 18, 2010.

What are the chances that the lawsuit will be certified as a class action?

Counsel believes that the issues addressed in this action are common to all members of the class. All issuers are bound by the same agreements, are paid under the same compensation formula and all have received inadequate compensation.

Who brought the lawsuit forward?

The Statement of Claim was issued on behalf of an issuer in Penetanguishene, Ontario. This issuer, known as the representative plaintiff, carried on business as an issuer from 1987 to January, 2010.

The representative plaintiff’s role is to work with class counsel to bring the action forward and to represent the class members in court.

I signed a release in 2009. May I still be part of the class action?

Yes. Ontario has agreed it will not use the signed releases as a bar to this class action.

How is the lawsuit being funded?

The lawsuit is being brought on a contingency basis.  This means that the lawyers will only be paid if the action is successful or results in a settlement in favour of the plaintiffs.

However, disbursements (i.e. out-of-pocket expenses) will be funded by the class members, including the class representative. The class representative will assist class counsel in obtaining funds for the disbursement fees from class members. Ultimately, if the class action is successful, all amounts advanced for disbursements will be re-paid from the proceeds of any judgment or settlement to class members.

If this action is successful, how will the payout be divided?

The division of any settlement or award of damages will be determined at a later time. However, it is likely that the amount will be allocated according to transaction volume.

I am a continuing issuer and have a new agreement in place with Ontario as of 2010. Will being a member of the class in any way affect my status as an issuer?

No. Being a member of the class will not affect your status as a continuing issuer with Ontario.

If you have any questions, please direct them to:

David Sterns, Sotos LLP (t)  416-977-0007
Allan Dick, Sotos LLP (t)  416-977-0007