What is an honorarium, and is a representative plaintiff always entitled to a reward?

What is a representative plaintiff?

In a class action, a representative plaintiff is a person who willingly steps forward and brings an action, in their name, on behalf of a class of similarly situated individuals. They play an active role in the litigation and assume important duties and responsibilities in assisting counsel to move the action forward including, among other things, communicating with and instructing counsel, swearing affidavits, and even being asked to testify.

Is there a reward for acting as a representative plaintiff?

Acting as a representative plaintiff can be a rewarding experience in more ways than one. Aside from providing access to justice to class members who may not have otherwise brought an action on their own behalf, in the event of a successful outcome (i.e., a settlement or favourable judgment after trial), the courts in most provinces may award a representative plaintiff additional compensation as a reward for their contributions of time and effort to the litigation.¹ This additional compensation is called an “honorarium,” and can range anywhere from $5,000 to $50,000.²

When will the Court Award an honorarium?

A representative plaintiff may be paid an honorarium if he or she made an exceptional contribution to the case that resulted in monetary success for the class.³ However, the court’s approval of an honorarium is never a guarantee.

In making an honorarium request, a representative plaintiff must show that he or she rendered “active and necessary” assistance in the preparation or presentation of the case that resulted in success for the class, and, in determining whether to award an honorarium, the court must perform a contextual analysis involving a consideration of factors including the representative plaintiff’s:

• active involvement in the initiation of the litigation and retainer of counsel;
• exposure to a real risk of costs;
• significant personal hardship or inconvenience in connection with the prosecution of the litigation;
• time spent and activities undertaken in advancing the litigation;
• communication and interaction with other class members; and
• participation at various stages in the litigation.⁴

Recently, in Bodnarchuk v Guestlogix Inc, a settled securities class action, the court awarded the representative plaintiff an honorarium of $15,000, holding that, if not for his willingness to come forward and his active interest and participation in the litigation, the class action “would have floundered and there would have been no success at all.”⁵ Among other responsibilities, Mr. Bodnarchuk assisted counsel in retaining an accounting expert and serving a three-volume motion record in support of his motion for leave to assert the action under Ontario’s Securities Act.⁶ He was also responsible for retaining new counsel and continuing the action in light of a conflict.

However, in Makris v Endo International PLC,⁷ another recently settled securities class action, the court came to the opposite conclusion and denied the representative plaintiff’s honorarium request of $15,000. The court explained that the payment of an honorarium is “exceptional” and “rarely done,” and should not be awarded to an individual simply for taking on the role of representative plaintiff. While Ms. Makris tendered evidence that she reviewed all versions of the statement of claim, read or was informed about expert reports,  provided instructions to counsel and assisted in the drafting of materials for the leave and settlement approval motions, and “took some time off” to meet with lawyers to discuss the action, the court found that Ms. Makris failed to establish that she engaged in exceptional effort, hardship, or any other contribution that went beyond what was expected of her in her role as representative plaintiff.⁸

The Bottom Line

In the event that a class action is successful, the question of whether an honorarium should be awarded to a representative plaintiff is determined on a case-by-case basis. The payment of an honorarium is not routine and is awarded in exceptional circumstances, such as those where the representative plaintiff “has gone well above and beyond the call of duty”⁹ in moving the litigation to a resolution in an active and meaningful way. The amount of the honorarium will depend on the circumstances of the case and the extent of the representative plaintiff’s active involvement.

¹ The awarding of an honorarium varies by province. For example, in Québec, pursuant to article 593 of the Code de procédure civile, RLRQ c C-25.01, a representative plaintiff may claim an amount for disbursements incurred, but may not be awarded an honorarium for the time and effort he or she devoted to the file: See Attar c Fonds d’aide aux actions collectives, 2020 QCCA 1121.

² See, for example, Cannon v Funds for Canada Foundation, 2017 ONSC 2670 and Charette v Trinity Capital Corporation, 2019 ONSC 3153, where the Court awarded representative plaintiffs honoraria of $50,000.

³ Bodnarchuk v Guestlogix Inc, 2020 ONSC 4789at paras 37 and 38 [Bodnarchuk].

⁴ Ibid at paras 38 and 39; Robinson v Rochester Financial Ltd, 2012 ONSC 911 at paras 26-44.

⁵ Bodnarchuk, ibid,at para 40.

⁶ RSO 1990, c S 5, s 138.8.

⁷ 2020 ONSC 5709 [Makris].

⁸ Ibid at paras 42 and 45.

⁹ Ibid at paras 38, 42-43 and 45.