Bell Canada Indexation of Pension Plan Class Action

• July 20, 2021

  The Court approved the implementation plan proposed by counsel, including a retroactive payment to all class members and future entitlements, as well as the ancillary motions for approval of legal fees and other matters. The Court’s Reasons for Decision are available here.

  You do not need to take any steps to receive your payments. The retroactive, one-time payment is expected to be sent directly to all class members in October. All future pension benefits payments after that date will reflect the indexation increase of 2% for the 2017 year rather than 1%.

• June 25, 2021

  Further to the Notice sent to all Class Members pursuant to the May 9th, 2021 Order of Justice Morgan, the Plaintiff’s Motion Materials for the July 9th hearing are available here:

  • Plaintiff’s Factum
  • Motion Record, Vol. 1
  • Motion Record, Vol. 2
  • Motion Record, Vol. 3
  • Motion Record, Vol. 4
  • Motion Record, Vol. 5
  • Plaintiff’s Book of Authorities

  The hearing will be conducted virtually over Zoom, and can be accessed at the link below.

  Topic: Les Austin v. Bell Canada   CV-18-590105-00CP
  Time: Jul 9, 2021 10:00 AM Eastern Time (US and Canada)
  https://ca01web.zoom.us/j/66851261808?pwd=dkxUNlljZWZvd3FTTktvNmhWUU9Cdz09
  Meeting ID: 668 5126 1808   –   Passcode: 289245

• May 12, 2021

  The Court approved a Notice to be distributed to Class members regarding motions for approval (i) of a payment plan including both a retroactive one-time payment as well as future entitlements; and (ii) of the ancillary motions by Plaintiff’s counsel seeking Court approval of their legal fees and other matters. See the attached Notice here. A hearing has been scheduled for July 9, 2021. Details for a Zoom link for the motions will be available on this website prior to that date. Any Class members that wish to object must submit an Objection Form before June 21, 2021. The Objection Form can be found here. You do not need to take any steps to receive the payments. If the payment plan is approved by the Court, you will receive your payments automatically.

• February 26, 2021

  The Court of Appeal has now issued its Order for summary judgment, which can be viewed here.  Counsel are in the process of preparing the necessary motion material to provide a Notice to the class: (i) of the implementation steps for payment; and (ii) of the ancillary motions by Plaintiff’s counsel seeking Court approval of their legal fees and other matters.   Members will receive this Notice, which will contain the details of those motions, as soon as it is authorized by the Court.

• January 27, 2021

  Since the release of the Ontario Court of Appeal’s decision in this matter granting judgment to the class, the parties and their lawyers have been working co-operatively to determine the necessary steps to implement the judgment and conclude the litigation.  (Bell Canada has agreed not to seek leave to appeal the Court of Appeal’s decision to the Supreme Court of Canada.) The parties are now in agreement on a plan for the Plaintiff to seek Court approval to provide payment to class members of damages based on revised indexation to date and to enhance pensions for future indexation.   Plaintiff’s counsel are in the process of preparing the necessary motion material to provide a Notice to the class: (i) of the implementation steps for payment; and (ii) of the ancillary motions by Plaintiff’s counsel seeking Court approval of their legal fees and other matters.   Members will receive this Notice, which will contain the details of those motions, as soon as it is authorized by the Court.

• February 26, 2020

  We are pleased to report that the Court of Appeal unanimously reversed the judgment of Justice Morgan and granted the plaintiff summary judgment. To view the decision please click here.

  The defendants may seek leave to appeal to the Supreme Court.

• January 8, 2020

  The appeal has been scheduled for February 5, 2020 at the Court of Appeal at 130 Queen St W, Toronto, ON M5H 2N5 at 10:00 am. Class members’ attendance is encouraged.

• September 26, 2019

  Summary judgment was granted to the Bell defendants. A copy of the decision is available here. The Plaintiff has appealed. The date for the hearing of the appeal has not been set yet.

• August 12, 2019

  The hearing of the motion for summary judgment has concluded. The parties are waiting on the judge’s decision.

• February 15, 2019

  The motions for summary judgment and certification are now proceeding on
  July 9-10.

• February 3, 2019

  The plaintiff has moved for summary judgment, which motion will be heard together with the certification motion on April 24 and 25, 2019.

• August 8, 2018

  Justice Glustein has scheduled the plaintiff’s certification motion in this matter to be heard on April 24 and 25, 2019.

• January 17, 2018

  The Statement of Claim has been issued in this matter. A copy is available here.

Show All

• July 20, 2021 Reasons for Decision
• June 25, 2021 Plaintiff's Book of Authorities
• June 25, 2021 Motion Record, Vol. 5
• June 25, 2021 Motion Record, Vol. 4
• June 25, 2021 Motion Record, Vol. 3
• June 25, 2021 Motion Record, Vol. 2
• June 25, 2021 Motion Record, Vol. 1
• June 25, 2021 Plaintiff's Factum
• May 12, 2021 French Notice
• May 12, 2021 English Notice
• February 21, 2021 Order
• February 26, 2020 Decision
• December 13, 2018 Reply Motion Record of the Plaintiff
• December 13, 2018 Motion Record of the Responding Defendant Oct 31 2018
• August 8, 2018 02 Reasons of Glustein to deny OSFI stay motion June 29 2018
• August 8, 2018 Motion Record of the Plaintiff (Certification & Summary Judgment) volume 2 of 2
• August 8, 2018 Motion Record of the Plaintiff (Certification & Summary Judgment) volume 1 of 2
• January 16, 2018 Statement of Claim

What is this class action about?

A class action was commenced in 2018 against Bell Canada and affiliates due to the incorrect approach used by Bell to calculate the cost of living indexation (cost of living increase) under the Bell Canada Pension Plan.  Bell Canada applied a rate of indexation of 1% for pension payments as of January 1, 2017.  The plaintiff alleged, on behalf of the whole class of pensioners, that the correct rate that should have been used was 2%, based on the rate used by Statistics Canada.

In order to obtain the quickest and most efficient result for the whole class, the plaintiff brought a summary judgment motion (as opposed to waiting for trial) which was heard together with the certification motion in this case (in order to certify the case as a class action). By advancing the case in this way, the whole class could obtain the benefit of the result of the case without having to bring separate lawsuits.

While the motion was initially denied, the plaintiff appealed.  In 2020, the Ontario Court of Appeal granted Judgment to the class and decided that the correct rate of indexation for 2017 was 2%, instead of 1%.  On July 20, 2021, the Court approved an implementation plan proposed by counsel, including a retroactive payment to all class members and future entitlements. The retroactive payments will be made directly to all class members in October, 2021. In addition, the pension amounts in the future are to be adjusted accordingly to reflect the correct indexation from 2017.

What is the total value of the increased pension payments from the lawsuit?

There are over 35,000 class members.  The actuaries have estimated that the total value (ie cost to the Plan) of the increased pension benefits to all of the Class Members over their lifetimes was over $103 million as of January 1, 2017.

This means that the Plan should have set aside at least $103 million dollars in January 2017, to be funded by Bell or out of the Plan surplus to pay for the additional pension increase. This amount is only an estimate based on actuarial assumptions. Bell is responsible for funding the plan liabilities including the indexing amounts.

The value of the increased pension benefits consists of two parts:

1. A retroactive amount which reflects the difference between the value of the 1% indexation increase paid as of January 1, 2017, and the value of a 2% indexation increase which should have been paid from January 1, 2017. In addition, interest will be added to this amount.  This figure is estimated to be approximately $35.8 million on the Calculation Date of October 1, 2021, before applicable deductions.
2. Your monthly pension will be permanently increased as of the payment date to reflect the additional 1% that you did not receive, brought forward to date. The precise value of the future increased pension payments which will be made to the class members and their surviving spouses (where applicable) as a result of the increased indexation from 2017 will not be known until all payments are made over many years.

 

What are the applicable deductions to the retroactive payment?

On July 20, 2021, the Court approved certain deductions to the retroactive payment, including the levy to the Class Proceedings Fund, Class Counsel legal fees, and an honourarium to the representative plaintiff. The Court’s Reasons for Decision can be found here.  Each of these are described below:

1. Levy to the Class Proceedings Fund:The class proceedings fund was established in Ontario to increase access to justice in class actions. So that this action could proceed, the Class Proceedings Fund provided an indemnity to the representative Plaintiff (for the potential adverse costs that he would risk on behalf of the class) and funded some disbursements. Therefore, pursuant to Regulation 771/92 of the Law Society Act, the Class Proceedings Fund must be paid a levy of 10% of the net proceeds of the retroactive payments, as well as repayment of the disbursements it funded. The levy is fixed according to statute, and was non-negotiable. The Class Proceedings Fund agreed to seek the levy only on the retroactive payments, which is significantly less than the total lifetime recovery for the class members.
2. Legal Fees: Class Counsel have expended thousands of hours over the last 3.5 years to advance this case on behalf of the class, without any payment to date. Class counsel took this case on contingency, meaning that they would only be paid if the action was successful. The contingency fee agreement which the representative plaintiff signed, provides for Class Counsel to receive between 30%-33%of total recovery. In this case, the total lifetime recovery of the class is estimated by the actuaries to be over $103 million.
   The Court approved a legal fee of $10 million, plus disbursements and taxes, which represents approximately 9.7% of the value of the estimated lifetime recovery for the class members, which is significantly less than the amount provided for under the retainer agreement. This amount is reduced by the $472,500 (including taxes) of litigation costs paid by the Defendants from the Plan.
3. An Honourarium:The Court approved an honourarium of $15,000 for the representative plaintiff for the time and personal commitment he invested in this case. He tirelessly advanced this case on behalf of the whole class, and was cross-examined in the proceedings.

 

What amounts of costs are being paid by the defendants?

In a lawsuit, a defendant may provide a contribution towards the class members’ costs.  In this case, the Court of Appeal ordered that the Defendants are to pay $22,500 in costs, and as part of the implementation order which is being sought, the defendants are to pay an additional $450,000.  Therefore, the Defendants will be contributing $472,500 towards the class’ legal costs from the Plan, which reduces the amount payable by the class for their legal fees and disbursements (expenses incurred for the lawsuit).

Can I opt-out of the Class Action?

The Court ordered that there is no right to opt out of this Class Action. Under other circumstances, members of class actions would have a right to choose to “opt out” of a class proceeding whereby they would have the opportunity to sue the Defendants separately and pursue their own case as their own expense. However, if a class member does so, they cannot receive any benefit from the class action. This scenario does not apply in this case, as all class members will receive the increased pension payments as a result of the Judgment, and therefore all will receive the benefits of this successful class action.

How will payment be made to me?

The retroactive, one-time payment is expected to be sent directly to all class members in October 2021. No further action is required on your part. The precise amount of the retroactive payment which will be made to each class member will vary, as it depends on the amount of pension entitlement each person is receiving, which varies person to person (determined by many factors including the years of service, working income, and other factors). In addition, the amount is dependent on the deductions as approved by the court. The Plan will automatically pay you this amount.

In addition, the future pension benefits payments to each class member after the October Payment Date will be automatically increased to reflect the indexation increase of 2% for the 2017 year rather than 1%.

Are amounts deducted from the one-time retroactive payment deductible for income tax purposes

All class members are encouraged to consult with their individual tax advisors in relation to their tax reporting obligations. Subsection 60(0.1) of the Income Tax Act does permit taxpayers to claim certain legal expenses as deductions against the otherwise taxable income received as a damage award or settlement in cases brought to establish a right to an amount of a benefit under a pension fund.  While the full scope of available deductions is not clearly specified in the legislation, in a 1999 advanced tax ruling (CRA Views, Ruling, 9901073), Revenue Canada concluded that certain expenses deducted from class proceedings settlement payments following a pension surplus dispute were properly deductible against the class members’ otherwise taxable payments, including ” any portion of the administrative costs, legal fees or other amounts charged against the amount held by the agent as provided in the Settlement that would be allocated to the individual plaintiff . . . if the gross amount of such costs were allocated to the individual. . . .” Nevertheless, Class members are strongly encouraged to consult with their own tax advisors to determine which, if any, of the deductions made from Class member distributions can be claimed as deductions against their income.  Bell will be providing Class members with an individual breakdown of the deductions made from their one-time retroactive payment, including their pro rata allocation of legal fees, the Class Proceedings Fund Levy, and the Honorarium paid to the representative plaintiff, in order to assist Class members and their tax advisors determine which, if any, of these deductions can be claimed against their taxable income.

I still have questions…

If you have questions, you may reach Class Counsel by telephone, toll free, at 1-866-777-6307, or by email at bellcanadaclassaction@kmlaw.ca.

Telephone: (416) 977-8353

Email: contactus@kmlaw.ca