The Fund’s entitlement to a levy and how it is calculated

If a case is awarded funding, a levy in favour of the Class Proceedings Fund (the “Fund”) is payable after the case is either settled or adjudicated in favour of the class. Regulation 771/92 sets out the way in which the Fund’s levy is calculated.

If a case is awarded funding, a levy in favour of the Class Proceedings Fund (the “Fund”) is payable after the case is either settled or adjudicated in favour of the class.

Regulation 771/92 sets out the way in which the Fund’s levy is calculated.

10.

(1) This section applies in a proceeding in respect of which a party receives financial support from the Class Proceedings Fund.  O. Reg. 771/92, s. 10 (1).

(2) A levy is payable in favour of the Fund:

(a) when a monetary award is made in favour of one or more persons in a class that includes a plaintiff who received financial support under section 59.3 of the Act; or

(b) when the proceeding is settled and one or more persons in such a class is entitled to receive settlement funds.  O. Reg. 771/92, s. 10 (2).

(3) The amount of the levy is the sum of,

(a) the amount of any financial support paid under section 59.3 of the Act, excluding any amount repaid by a plaintiff; and

(b) 10 per cent of the amount of the award or settlement funds, if any, to which one or more persons in a class that includes a plaintiff who received financial support under section 59.3 of the Act is entitled.  O. Reg. 771/92, s. 10 (3).

In summary, the levy is composed of repayment of the disbursement funding provided by the Fund and 10 % of the “amount of the award or settlement funds, if any, to which one or more persons in a class” is entitled.

The courts have interpreted various aspects the formula for the 10% levy.

In Martin v. Barrett, [2008] O.J. No. 3813, the court concluded that the Fund’s 10 per cent levy is calculated on the Net recovery, after the deduction of counsel fees and any other costs incurred to administer the settlement.

At paragraph 42, the Court stated:

[42] …The success of a class action can be measured by the amount distributable to, or applicable for the benefit of, the class.  It is, in my opinion, both reasonable and logical for the quid pro quo to be received by the Foundation for its financial assistance in achieving such success to depend on the extent of the success, without regard to counsel fees or other expenditures made for the same purpose.

At paragraph 48, the Court further stated:

[48] The levy payable to the Fund pursuant to the Regulation is to be calculated by applying 10 percent of the net amount of any monetary award or settlement amount remaining after the deduction therefrom of all sums which the court directs to be paid to those other than class members.  These deductions may include, among other items, the full amount approved by the court as fee for class counsel, amounts expended or to be expended for notice, administration, distribution, or for any other expense that the Court approves as payable from a monetary award or settlement fund.

In Houle v. St. Jude, 2017 ONSC 5129, the Court followed this approach when calculating hypothetical scenarios as to how the Fund’s levy compared to a third party funder’s levy.  See paragraphs 40 to 41.

In Smith v Money Mart, 2010 ONSC 1334 approved at 2011 ONCA 233, the Court approved a settlement that provided for the payment of the levy by the defendant Money Mart to the Fund directly, and pursuant to which the levy applied to the cash portion of the settlement as well as vouchers given to class members.

In Jeffery Rudd v. London Life Insurance Co, 2016 ONSC 5506, affirmed 2018 ONCA 716, the Court concluded that the levy was applicable to a Judgement whereby no monies were directly paid to the class members, but were rather paid into an account held by the Defendant for the benefit of class members. It also held that the levy was payable directly by the defendant to the Fund.  See paragraphs 110 to 116 of the Superior Court decision and paragraphs 58 to 67 of the Court of Appeal decision.

Example:

Settlement Amount: $10,000,000

To calculate levy, deduct all of:

Counsel fees: $2,000,000
Funded disbursements returned to the fund: $200,000
Administration costs: $50,000

Total amount subject to the levy
$7,750,000

Levy = $7,750,000 X .10 = $775,000

For any questions about the calculation of the levy in particular cases, please contact Gina Papageorgiou at gpapageorgiou@lawfoundation.on.ca.

Class Proceedings Fund webpages

Class Proceedings Fund

The Class Proceedings Fund provides financial support to approved class action plaintiffs for legal disbursements and indemnifies plaintiffs for costs that may be awarded against them in funded proceedings.

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Application process

Details on the process and documents needed to apply to the Class Proceedings Fund.

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The Fund’s entitlement to a levy and how it is calculated

If a case is awarded funding, a levy in favour of the Class Proceedings Fund (the “Fund”) is payable after the case is either settled or adjudicated in favour of the class. Regulation 771/92 sets out the way in which the Fund’s levy is calculated.

Read more

Meeting dates

The Class Proceedings Committee’s list of scheduled meeting dates. Application hearings are scheduled after a full application has been received.

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Reports & resources

The Class Proceedings Fund reports financial information and activities annually within the Foundation’s annual report. Find these reports, as well as other resources, here.

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Committee

The Class Proceedings Committee is responsible for making decisions about whether applicants will receive support from the fund. Meet its members.

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