Court declines to interfere with Manulife settlement

The case, which originally started in 2013, “concerns alleged misconduct in the marketing of life and disability insurance to mortgagors by [Manulife] and its affiliates,” the court noted in Leonard v. The Manufacturers Life Insurance Company.

The plaintiffs took issue with the manner by which subsidiaries of Manulife marketed, in Canada, creditor protection insurance products underwritten by Manulife for mortgagors.

Several parallel cases were subsequently filed in various provinces. The case was twice denied certification as a class action before a settlement was finally reached that resulted in a court certifying the case in order to approve the settlement. That decision, by Supreme Court of B.C. Justice Geoffrey Gomery, was released in 2020.

Several plaintiffs subsequently sought leave to appeal the certification order, and the appointment of the representative plaintiff, arguing that she “acted against the interests of the class by agreeing to the proposed settlement.”

Among other things, they argued that the settlement is “woefully inadequate”; that there’s a realistic prospect that a better outcome could be achieved; and that allowing the settlement sends the message that “deep‑pocketed defendants can buy their way out of widespread unlawful conduct … if they can find a representative plaintiff willing to settle on such unreasonable terms.”

However, the appeal court rejected their arguments.

It said that the lower court is entitled to substantial deference in appointing a representative plaintiff and approving a settlement, and it concluded that there was no clear error in those decisions.

“In the absence of identifiable legal or factual error, the applicants are not entitled simply to repeat the same arguments they made below in this court in the hope of achieving a different result on appeal,” the court said in its decision.

The court also found that the circumstances of the case aren’t unusual enough to warrant granting leave to appeal.

“The judge conducted a careful, thorough and cogent analysis of the terms and conditions of the proposed settlement. On the record before him, he was entitled to conclude that the settlement was fair, reasonable and in the best interests of the class and should be approved,” the appeal court said.

The appeal court also concluded that granting leave would be contrary to the interests of justice.

“In my view, it would seriously compromise the ability of representative plaintiffs and defendants to negotiate and settle class actions, subject to court oversight … if leave to appeal orders for certification and settlement approval were to be granted in circumstances such as these,” it said.