Corless v. KPMG LLP

In this matter Ken was co-counsel in a motion for the certification of a class proceeding and the approval of a settlement agreement and the plaintiff’s legal fees.

Before a class action can be commenced in Ontario, the Court must first approve the matter as one that is appropriate to be a class action. One of the early steps in this process is to bring a motion for certification. The party bringing this motion (the representative plaintiff) is a member of the proposed class of plaintiffs. If the matter is not certified as a class action, it proceeds no further than the motion (unless the parties appeal the decision denying certification).

As such, a certification motion is highly contested step at the outset of class action proceedings. A win means litigation proceeds further, while a loss means significant legal costs were likely incurred by the parties for nothing.

In this case the plaintiff, Ms. Corless, was a former employee of the defendant, KPMG, who wanted to commence a class action on behalf of former employees for unpaid overtime pay. Before this certification motion took place, the defendant had conducted a review of its practices and concluded that compensation should be paid to former employees who had not been properly paid. The defendant hired various experts and professionals and organized an implemented a program to pay former and current employees. As part of this program, over 10,000 letters were sent to current and former employees to address the issue of unpaid overtime. Among other items, enclosed with these letters were an acceptance form, a rejection form, and a full and final release.

After the above plan started being implemented, the lawyers for the parties commenced negotiations to settle the potential claims for unpaid overtime pay by the employees. This led to a a settlement agreement which was conditional on Court approval. As part of the settlement, KPMG had agreed to pay Ms. Corless’ lawyers’ legal fees.

The Honourable Justice Perell decided in favour of Ms. Corless and certification in order to move ahead with the settlement which was determined to have been “fair, reasonable, adequate, and in the best interests of the Class”:

“31 Having read the motion record, I am satisfied that for settlement purposes, the criterion for certification have been satisfied.
In particular: (a) the pleadings disclose a cause of action; (b) there is an identifiable class of two or more persons who will be
represented by Ms. Corless as representative plaintiff; (c) the claims of the class raise common issues of fact or law; (d) a class
proceeding is the preferable procedure; and (e) Ms. Corless is a suitable representative plaintiff.”

32 The pleadings, as amended, disclose a cause of action against KPMG on behalf of former and current employees for
overtime worked between January 1, 2000 and September 30, 2007, for which the employees were not paid or otherwise
compensated pursuant to the applicable provincial employment standards legislation.

33 It is desirable to employ the mechanism of a class proceeding to resolve the claims of the KPMG employees. There
are over 11,000 potential class members in Canada. Individual litigation would be repetitive and expensive for the parties and
would place an undue and unnecessary burden on the judicial system. The claims have been and can be resolved based on the
application of the applicable provincial employment standards legislation and calculation of overtime amounts owing, if any,
based on KPMG’s time and payroll records, as well as any information provided by employees.

…

40 I find that the Settlement Agreement is fair, reasonable, adequate, and in the best interests of the Class.”

The Honourable Justice Perell also praised the actions of Ms. Corless’ lawyers in negotiating the settlement and approved their fees stating they were “fair and reasonable”:

“49 Ms. Corless’s counsel responded responsibly and carefully to the Overtime Redress Plan and rather than get in the way of
a proposed settlement that appeared advantageous to former and current employees, they negotiated improvements to that plan.

…

52 I approve the counsel fee. It is fair and reasonable compensation in all the circumstances.“

This motion for certification was brought in order to allow the parties to settle the matter in a cost-efficient matter and to avoid further expensive class action litigation. Ken and his co-counsel were able to obtain a favorable result for Ms. Corless and thousands other employees of KPMG who were also potential class members.

The plaintiff, the members of the class, and the defendant were able to resolve this matter without a prolonged legal battle.

The full decision is available for review here.

Full citation: Corless v. KPMG LLP, 2008 CarswellOnt 4708, [2008] O.J. No. 3092, 170 A.C.W.S. (3d) 464