2021 FC, 2021 FC 1260

Date: 20211119 Docket: T-1663-17 Citation: 2021 FC 1260 Ottawa, Ontario, November 19, 2021 PRESENT: Mr. Justice Gascon BETWEEN: ARTHUR LIN Plaintiff and AIRBNB, INC., AIRBNB CANADA INC., AIRBNB IRELAND UNLIMITED COMPANY, AIRBNB PAYMENTS UK LIMITED Defendants ORDER AND REASONS I. Overview [ 1 ] This is a motion brought under Rules 334.29 and 334.4 of the Federal Courts Rules , SOR/98-106 [ Rules ], for judicial approval of:

i) a class action settlement [Settlement Agreement], including the appointment of an administrator of the claims to be filed [Claims Administrator]; ii) the legal fees sought by class counsel Evolink Law Group and Champlain Avocats [Class Counsel Fees]; and iii) the payment of an honorarium to the representative Plaintiff, Mr. Arthur Lin [Honorarium]. [ 2 ] The Settlement Agreement, a copy of which is attached as

Schedule " “A” " to this Order, was concluded on August 27, 2021 between Mr. Lin and the defendants Airbnb, Inc., Airbnb Canada Inc., Airbnb Ireland Unlimited Company and Airbnb Payments UK Limited [collectively, Airbnb], in the context of a class action proceeding [Class Action] filed by Mr. Lin in relation to the display of prices on Airbnb’s websites and/or mobile applications [Airbnb Platform].

The Airbnb Platform is a digital marketplace connecting individuals seeking accommodations [Guests] with other individuals offering accommodations [Hosts], and allowing them to transact. [ 3 ] For the reasons that follow, I will approve the Settlement Agreement and the appointment of the Claims Administrator on the terms provided by the parties, but I will only approve in part the proposed Class Counsel Fees and Honorarium. II. Background A. Procedural context [ 4 ] This Class Action was commenced on October 31, 2017. In his statement of claim, Mr. Lin alleged that Airbnb breached

section 54 of the Competition Act , RSC 1985, c C-34 [ Competition Act ], a rarely used criminal offence known as " “double ticketing,” " by charging Guests, for the booking of an accommodation offered by Hosts on the Airbnb Platform, a final price that was higher than the price displayed at the first stage of browsing on the Airbnb Platform. More specifically, Mr. Lin contested the fact that Airbnb added " “service fees” " to the final price charged for its accommodation booking services, although these fees were not included in the initial price per night displayed on the Airbnb Platform. The heart of Mr.

Lin’s claim was that the inclusion of an additional service fee at a later stage of the sale process resulted in a higher price than the first price expressed to Guests, in contravention of

section 54 of the Competition Act . [ 5 ] For the purpose of the Settlement Agreement, the class members are defined as all individuals residing in Canada, other than Quebec, who, from October 31, 2015 to June 25, 2019:

i) reserved an accommodation for non-business travel anywhere in the world using Airbnb; ii) whose reserved accommodation matched the parameters of a previous search made by the individual on the search results page of Airbnb; and iii) paid, for the reserved accommodation, a price (excluding applicable sales and/or accommodation taxes) that is higher than the price displayed by Airbnb on the said search results page for this accommodation [Class]. Mr.

Lin claimed that the Class members having experienced this situation were entitled to the benefit of the lower price, and sought damages equal to the difference between the first price and the final price displayed on the Airbnb Platform. [ 6 ] Following a contested hearing, I certified the proceeding as a class action in a judgment issued on December 5, 2019 ( Lin v Airbnb, Inc , 2019 FC 1563 [Certification Judgment]). [ 7 ] As of June 27, 2019, prior to the issuance of the Certification Judgment, Airbnb adjusted the Airbnb Platform so that Airbnb now displays an all-inclusive price for all accommodation bookings, excluding applicable taxes, at every step of the search and booking process. [ 8 ] On December 16, 2019, Airbnb filed a Notice of Appeal of the Certification Judgment at the Federal Court of Appeal [FCA].

The appeal was heard on March 4, 2021 by way of Zoom. After the hearing, the FCA reserved its judgment, and the decision on the appeal was under deliberation when the Settlement Agreement was reached by the parties. The FCA is holding the appeal in abeyance pending

the completion of the settlement process. [ 9 ] A few weeks before Mr. Lin launched his class action proceeding before this Court in late October 2017, Mr. Preisler-Banoon had filed a similar class action before the Superior Court of Quebec in the matter Preisler-Banoon c Airbnb Ireland , 500-06-000884-177 [Quebec Action]. On September 13, 2019, prior to the hearing of the " “authorization” " (as the certification process is known in Quebec) of the Quebec Action, Airbnb and the Quebec plaintiff executed a settlement agreement.

On February 3, 2020, the Superior Court of Quebec rendered a judgment approving the settlement of the Quebec Action ( Preisler-Banoon c Airbnb Ireland , 2020 QCCS 270 [Quebec Settlement]). The Quebec Settlement has a gross value of $3,000,000 and provides to the Quebec class members (as they are defined in the Quebec Settlement) a credit of up to $45 on their next booking with Airbnb after confirming their eligibility. B. Overview of Settlement Agreement [ 10 ] The parties have entered into the Settlement Agreement on August 27, 2021, subject to this Court’s approval. Mr.

Lin’s legal counsel, Evolink Law Group and Champlain Avocats [ Class Counsel], have concluded that the Settlement Agreement is fair, reasonable, and in the best interests of Mr.

Lin and the Class. [ 11 ] The material terms of the proposed Settlement Agreement include: • the settlement is valued at $6,000,000 [Settlement Amount], which includes any claims administration expenses [Administration Expenses], Class Counsel Fees, any Honorarium, and the applicable sales taxes; • Airbnb will receive a full and final release in respect of the subject matter of this Class Action, namely, the display of prices on the Airbnb Platform [Release]; • the notification to eligible Class members and the claims procedure will be fully electronic, and managed by the Claims Administrator, Deloitte LLP [Deloitte]; • after the Court approves the Settlement Agreement, and before the claims deadline, eligible Class members can make a claim for a pro- rata share of up to $45 from the settlement funds that will remain after deduction of the Administration Expenses, Class Counsel Fees, Honorarium and applicable sales taxes from the Settlement Amount [Net Settlement Funds]; • distribution of the Net Settlement Funds to the eligible Class members that make a claim will be by way of a non-cash-convertible credit on the Airbnb Platform [Credit], to be redeemed on the next accommodation booking within 24 months of issuance; and • the individuals covered by the Quebec Settlement are excluded from the Settlement Agreement, and claims relating to those individuals will be dismissed from this Class Action. [ 12 ] Once the Settlement Agreement is approved, a hyperlink will be sent to Class members to make a claim.

The Credit to be issued by Airbnb will be a one-time-use only, non-transferable, non-refundable, non-cash-convertible credit of up to $45 in value to each eligible Class member who submits a claim. The Credit’s ultimate value will depend on the total number of approved claims and on the amount the Court approves for Administration Expenses, Class Counsel Fees, Honorarium and applicable sales taxes – which will all be deducted from the Settlement Amount.

The Credit cannot be combined with any other offer discount, or coupon, and must be redeemed within 24 months after issuance, on the next Airbnb accommodation booking in any location worldwide . The Credit will be in the same amount for each Class member.

In order to be able to redeem a Credit, the eligible Class members must accept the most recent version of Airbnb’s Terms of Service and not be prohibited from using the Airbnb Platform (in accordance with the Terms of Service). [ 13 ] In exchange, Class members will acknowledge that the Credit is in full and complete settlement of their claims and agree to give up any and all claims they may have against Airbnb relating in any way to the display of prices on the Airbnb Platform, including in respect of conduct alleged (or which could have been alleged) in the Class Action. [ 14 ] With respect to Class Counsel Fees,

Section 11.3 of the Settlement Agreement provides that Class Counsel will seek approval of the Court for the payment, by Airbnb, of Class Counsel Fees in the amount of $2,000,000, plus applicable taxes. The Settlement Agreement further states that Class Counsel will not seek additional payments for disbursements. In October 2017, prior to the filing of the Class Action, Class Counsel had entered into a fee agreement with Mr. Lin [Retainer Agreement], which provides for a contingency fee not exceeding 33% of the total amounts recovered by the Class.

I pause to observe that, surprisingly, the Class Counsel Fees mentioned in the Settlement Agreement are slightly above what is provided for in the Retainer Agreement concluded with Mr. Lin: they amount to one third of the Settlement Amount (i.e., 33.33%) as opposed to a maximum of 33% set out in the Retainer Agreement, representing a difference of $20,000. [ 15 ] As far as the Honorarium is concerned, the Settlement Agreement provides that Class Counsel may ask the Court for the approval of an Honorarium of $5,000 to Mr.

Lin. [ 16 ] Airbnb does not oppose the terms of the Settlement Agreement relating to Class Counsel Fees and to the request made for an Honorarium to Mr. Lin, and has agreed to pay the Class Counsel Fees, Mr. Lin’s Honorarium and applicable taxes that are approved by the Court. As indicated above, all of these amounts will be deducted from the Settlement Amount. C.

Notices to Class members [ 17 ] On September 16, 2021, the Court issued an order for the distribution of short-form and long-form notices of settlement approval [together, Notices] to the affected Class members, in accordance with Rule 334.34 [Notice Order]. The Notice Order also fixed the settlement approval hearing before this Court on November 1, 2021.

[ 18 ] The Notices have been broadly distributed to all persons residing in Canada who were Airbnb customers between October 31, 2015 and June 25, 2019. Through these Notices, Class Counsel advised the Airbnb customers of the settlement of the Class Action and of the settlement approval hearing, and summarized certain elements of the Settlement Agreement. This

summary notably referred to the maximum value of $45 for the Credit and explained the redemption process to be followed, as well as the procedure to opt out or object to the proposed settlement. The Notices further informed the potential Class members that the Notices were just a

summary, indicated that the Settlement Agreement itself and other court documents were available through a link to the Class Counsel’s website (i.e., https://evolinklaw.com/airbnb-service-fees-national-class-action), and mentioned that the Settlement Agreement shall prevail in case of any discrepancy between the Notices and the Settlement Agreement. [ 19 ] The Notices were sent to the Airbnb customers at the end of September 2021. The Claims Administrator has provided its report on the results of the e-mail distribution of the Notices.

They are as follows: i) 2,539,475 e-mails were sent; ii) 494,002 e-mails bounced or were undeliverable; iii) 765,736 e-mails were opened, with 412,934 unique opens to the e-mails. In total, 14 individuals contacted Class Counsel indicating a desire to opt out of the Class Action, and 4 individuals submitted a written objection to the proposed Settlement Agreement. III. Analysis [ 20 ] This motion is seeking the Court’s approval for the Settlement Agreement, Class Counsel Fees and Mr. Lin’s Honorarium. Each of these three requests will be dealt with in turn. A. Settlement Agreement

(1) The law relating to approval of class action settlements [ 21 ] Rule 334.29 provides that a class proceeding settlement must be approved by the Court.

The legal test to be applied is whether the proposed settlement is " “fair, reasonable and in the best interests of the class as a whole” " ( Bernlohr v Former Employees of Aveos Fleet Performance Inc , 2021 FC 113 [ Bernlohr ] at para 12 ; Wenham v Canada (Attorney General) , 2020 FC 588 [ Wenham 1 ] at para 48; McLean v Canada , 2019 FC 1075 [ McLean 1 ] at paras 64-65). [ 22 ] The factors to be considered in the analysis have been reiterated by the Court on several occasions ( Bernlohr at para 13 ; Wenham 1 at para 50; McLean 1 at paras 64-66; Condon v Canada , 2018 FC 522 [ Condon ] at para 19 ).

They are similar to the factors retained by the courts across Canada. These factors are non-exhaustive, and their weight will vary according to the circumstances and to the factual matrix of each proceeding.

I summarize them as follows, in what I view as their order of relative importance: 1) The terms and conditions of the settlement; 2) The likelihood of recovery or success; 3) The expressions of support, and the number and nature of objections; 4) The degree and nature of communications between class counsel and class members; 5) The amount and nature of pre-trial activities including investigation, assessment of evidence and discovery; 6) The future expense and likely duration of litigation; 7) The presence of arm’s length bargaining between the parties and the absence of collusion during negotiations; 8) The recommendation and experience of class counsel; and 9) Any other relevant factor or circumstance. [ 23 ] A proposed settlement must be considered as a whole and in context.

Settlements require trade-offs on both sides and are rarely perfect, but they must nevertheless fall within a " “zone or range of reasonableness” " ( Bernlohr at para 14 ; McLean 1 at para 76; Condon at para 18 ). Reasonableness allows for a spectrum of possible resolutions and is an objective standard that can vary depending upon the subject matter of the litigation and the nature of the damages for which the settlement is to provide compensation to class members.

However, n ot every disposition of a proposed settlement agreement must be reasonable, and it is not open to the Court to rewrite the substantive terms of a proposed agreement ( Wenham 1 at para 51). The function of the Court in reviewing a proposed class action settlement is not to reopen and enter into negotiations with litigants in the hope of improving the terms of the agreement ( Condon at para 44 ).

In the end, the proposed settlement is a " “take it or leave it” " proposition. [ 24 ] I make one other observation, which relates to the interaction between the approval of proposed class action settlements and the approval of class counsel fees.

In mandating that both the class action settlements and the payment of class counsel fees be subject to the Court’s approval (i.e., Rules 334.29 and 334.4), the Rules place an onerous responsibility on the Court to ensure that the class members’ interests are not being sacrificed to the interests of class counsel, who have typically taken on a substantial risk and who have a great deal to gain not only in removing that risk but in recovering a significant reward from their contingency fee arrangement ( Shah v LG Chem, Ltd , 2021 ONSC 396 [ LG Chem ] at para 40 ). [1] The incentives and the interests of class counsel may not always align with the best interests of the class members.

It thus falls on the Court to scrutinize both the proposed settlement agreement and the proposed class counsel fees, as they will typically be interrelated. This is the case here since the Net Settlement Funds available to Class members are equal to the Settlement Amount after deduction of the Class Counsel Fees and other expenses.

(2) Application to this case (

a) Terms and conditions of the settlement [ 25 ] Under the terms and conditions of the settlement, the question to be determined is whether the proposed Settlement Agreement, when c onsidered in its overall context, provides significant advantages to the Class members, c ompared to what would have been an expected result of litigation on the merits. [ 26 ] The key terms of the Settlement Agreement, as seen by the parties, include: a Settlement Amount valued at $6,000,000; distribution of the Settlement Amount by way of a non-cash-convertible Credit issued on the Airbnb Platform; a maximum Credit of $45 per Class member, redeemable within 24 months on the next accommodation booking; and the dismissal of the claims for the Quebec-based members due to potential overlaps with the Quebec Settlement.

In his submissions, Mr. Lin also refers to the fact that Airbnb has modified its behaviour and changed its pricing display, though this is not, as such, a term and condition of the Settlement Agreement. [ 27 ] In his written and oral submissions to the Court, Mr. Lin focused on five particular aspects of the Settlement Agreement, namely, the non-cash nature of the Credit, the Release granted to Airbnb, the exclusion of Quebec members, the identity of the Claims Administrator, and the scope of eligible Class members. I will briefly look at each element. (

i) Non-cash nature of the Credit [ 28 ] In the current case, the monetary benefit of the Settlement Agreement for the Class members will take the form of a non-cash distribution to the eligible Class members, namely, the Credit. I acknowledge that courts in Canada and in the United States have often expressed concerns about class action settlements – generally referred to as " “coupon settlements” " – in which class counsel are awarded large fees while leaving class members with coupons or other non-cash awards of little or no value. However, I agree with Mr.

Lin that, while the Credit available to Class members in this case is a non-cash settlement, it does not bear the problematic attributes generally associated with " “coupon settlements.” " [ 29 ] First, the Credit granted to Class members will have a wide range of applications. The Class members will be able to use it towards accommodation bookings anywhere in the world, including local staycations or short road-trips, for both the service fees (paid to Airbnb) and the listing fees (paid to the Hosts) that are part of a booking on the Airbnb Platform.

Second, the ultimate value of the Settlement Amount (i.e., $6,000,000) is known at the outset, and will not be dependent on the number of individual Class members who actually redeem the Credit. Third, the claims procedure will be simplified, as eligible Class members will not be required to submit proof of their claims and will be entitled to share in the settlement upon acknowledging that they meet the requirements for a claim. Fourth, the redemption period is long enough, extending to a maximum of 24 months.

Fifth, based on inquiries received from potential Class members after the Notices were distributed, Airbnb appears to have a number of repeat customers for its Airbnb Platform. There is therefore a good likelihood that Class members will do business with Airbnb again, and will effectively use the Credit. [ 30 ] In sum, after scrutiny, I am satisfied that the Credit does not fit among those " “coupon settlements” " that the Court should be reluctant to approve. Rather, the Credit will be distributed in a way that is more akin to a gift card or a bill credit.

In addition, based on the evidence before me, it is expected that the take-up rate will be significant among the Class members.

Finally, in the circumstances, the distribution of the Net Settlement Funds in the form of Credits through the Claims Administrator is more practical and economical, compared to what a cash distribution would have entailed. (ii) Release to Airbnb [ 31 ] Turning to the Release clause, the Court has to review the scope of releases granted in class action settlement agreements to ensure that defendants do not unfairly obtain a broad release (or even a release for future claims), beyond the claims that are or could have been raised in the action. Here, I agree with Mr.

Lin that there are no concerns relating to the scope of the Release granted to Airbnb in the Settlement Agreement. The Release is qualified by the words " “relating in any way to the display of prices on the Airbnb Platform, including conduct alleged (or which could have been alleged) in the Proceeding,” " which was the subject matter of Mr. Lin’s Class Action. The Release is thus circumscribed to those price-related practices at the source of the Class Action.

While the Release extends to all forms of price " “display,” " including arguably false or misleading pricing representations, I am satisfied that it is not overbroad in the context of what was alleged by Mr. Lin in his Class Action. (iii) Dismissal of the claims for Quebec members [ 32 ] As stated above, the Quebec Settlement provides for the settlement of similar claims made by the class members in the Quebec Action, based on Airbnb’s display of prices on the Airbnb Platform. I agree with Mr.

Lin that it is fair and reasonable to exclude those claims from the Settlement Agreement as amounts received by the Quebec members under the Quebec Settlement would overlap with the Settlement Agreement and would create a potential of double indemnity for the class members residing in Quebec. (iv) Use of Deloitte as Claims Administrator [ 33 ] The estimated Administration Expenses primarily consist of the fees for the Claims Administrator, Deloitte, and amount to an all- inclusive total of $320,500. I agree with Mr.

Lin that this amount is justified in the circumstances and I am satisfied that Deloitte is well qualified to act as Claims Administrator. (

v) Eligible Class members [ 34 ] The Settlement Agreement provides for an additional requirement to be eligible to claim a Credit, which results in a slight reduction of the number of eligible Class members entitled to receive compensation. Eligible Class members will be limited to those individuals

that used the Airbnb Platform for the first time between October 31, 2015 and June 25, 2019. Therefore, Class members that already had an account and had used the Airbnb Platform prior to October 31, 2015 will not be eligible for a Credit.

Airbnb estimates that the difference between Class members who will be eligible for a Credit and the total of Class members who used the Airbnb Platform during the relevant period represents approximately 194,000 individuals. [ 35 ] I am satisfied that this reduced distribution of the Settlement Amount to a more limited number of Class members is a reasonable compromise in light of Airbnb’s position that those Guests who had experienced the impugned pricing practice more than once are on a different legal footing. (vi) Other elements [ 36 ] In assessing the terms and conditions of a proposed class action settlement and determining whether they are fair, reasonable and in the best interests of the class members, the Court should also consider the expected take-up rate by the class members, particularly where there is a fixed settlement fund as is the case here ( Condon at para 48 ), or where the quantum of the compensation to be received by each claimant depends on the number of eligible claimants who submit a claim.

The Court may therefore take into account evidence on the expected participation in the settlement by class members when it assesses the sufficiency of available settlement funds or the effective monetary compensation of class members ( Bodnar v The Cash Store Inc , 2010 BCSC 145 at para 21 ). [ 37 ] In this case, based on the evidence provided by Mr. Lin (through the affidavit sworn by Class Counsel Simon Lin [Counsel Affidavit]), it is reasonable to estimate that approximately 30% of the Class members will apply for a Credit and participate in the claims process.

The evidence reveals that, in the Quebec Settlement, the take-up rate ended up being effectively about 30%, translating into a credit of approximately $9.50 per individual Quebec class member. According to the Counsel Affidavit (at paragraphs 108-110), Class Counsel expects that, in the current case, the take-up rate will be " “reasonably high” " and " “similar” " to the Quebec Settlement, although it could be affected by some other factors, in particular the pandemic.

Based on the evidence before me, I therefore agree that 30% is a reasonable rough estimation of the proportion of eligible Class members who are expected to file a claim to the Net Settlement Funds. (vii) Conclusion [ 38 ] In

summary, when considered in their overall context, I am satisfied that the terms and conditions of the Settlement Agreement provide significant advantages to the Class members which might not have been achieved with the continued litigation, and are a positive factor supporting the approval of the Settlement Agreement. (

b) Likelihood of recovery or success [ 39 ] The next factor to consider is the likelihood of recovery or success. This factor refers to the likelihood of success of Mr. Lin’s Class Action if it were to proceed on the merits. This factor of likelihood of recovery or success must be assessed at the time when the parties choose between proceeding with the litigation or settling the matter.

Under this factor, the Court must determine whether the proposed Settlement Agreement is an attractive viable alternative to continued litigation. [ 40 ] Here, I am satisfied that the Settlement Agreement is a reasonable and attractive viable alternative to litigation for Mr. Lin and the Class, because litigating the Class Action could have led to unforeseen conclusions. The ultimate success of Mr.

Lin in his Class Action was uncertain for three main reasons, namely, the pending appeal before the FCA, the risk involved at the merits trial, and the difficulties linked to enforcing a judgment from this Court in foreign jurisdictions. [ 41 ] First, the pending appeal before the FCA focused on three important issues, for which the outcome is fairly difficult to predict:

i) whether a

section 36 claim based on

section 54 of the Competition Act requires pleading and proving " “reliance” " ; ii) whether it was sufficient for Mr. Lin to plead the simple difference between the two prices posted by Airbnb as damages under

section 36 of the Competition Act ; and iii) whether the Class description met the appropriate standard for certification. Since many of these issues are novel, the risk of an adverse decision from the FCA is a real possibility for the Class members. [ 42 ] Second, the success of Mr. Lin at a merits trial faces several hurdles. In my reasons delivered in the Certification Judgment, I commented on the challenges in litigating this Class Action to a successful conclusion on the merits.

I notably indicated that the application of the " “double ticketing” " provision to this case was not free from doubt (Certification Judgment at para 7), and that Airbnb had raised numerous valid points regarding the legal

interpretation of sections 36 and 54 of the Competition Act and their application to this case (Certification Judgment at para 34). I further recognized that, in light of the paucity of " “double ticketing” " cases, Mr. Lin certainly appeared to be stretching the potential

interpretation and application of

section 54 of the Competition Act , and that he was extending it into unchartered territory (Certification Judgment at para 56). I noted that, in its submissions, Airbnb had raised valid and relevant points regarding the nature and identity of the product or products effectively supplied by Airbnb through the Airbnb Platform, and that it was certainly open to Airbnb to submit and argue that

section 54 of the Competition Act could not apply to its situation because what is effectively supplied through the Airbnb Platform are two different products by two different persons at two different prices (Certification Judgment at para 53). In other words, there were solid factual and legal arguments advanced by Airbnb on the presence of two products, on whether what is supplied by Airbnb could be characterized as a bundle of different articles and services, and on whether the product at issue is the bundle or its components, as opposed to the accommodation booking services put forward by Mr.

Lin (Certification Judgment at para 54). I also pointed out that it may look like a strange proposition to plead and argue that loss or damage could be established by a customer, based simply on a price differential between the lower and the higher price of a product, when the customer knew about both prices and nevertheless decided to accept the higher price and to proceed with the transaction (Certification Judgment at para 83). I finally acknowledged that demonstrating and proving the existence of an actual loss or damage in these circumstances may present additional challenges for Mr.

Lin and the Class members (Certification Judgment at para 83). [ 43 ] All of these observations reflect the fact that the likelihood of success of Mr. Lin at the common issues trial was difficult to predict at the time of certification, and it remains so today. There is little to no jurisprudence on

section 54 of the Competition Act , as well as considerable uncertainty in the law as to whether a trial judge would award damages in the context of this Class Action. It is also clear

that the legal questions advanced by Mr. Lin were novel with no appellate jurisprudence, suggesting a strong likelihood of multiple levels of appeals after a decision at the merits trial. [ 44 ] Third, there is also a risk with having to enforce a judgment against non-Canadian defendants, as is the case for some of the Airbnb entities. [ 45 ] In sum, when the parties decided to conclude the Settlement Agreement, it was uncertain and questionable whether Mr.

Lin’s Class Action could be litigated successfully on the merits, given the state of the law on " “double ticketing.” " Most of those factors are still relevant today. This, again, is a positive factor supporting the approval of the Settlement Agreement. (

c) Expressions of support, and number and nature of objections [ 46 ] Turning to the expressions of support or objections to the proposed Settlement Agreement, Class Counsel has received a total of 84 correspondence from potential Class members, further to the Notices sent by the Claims Administrator after the Notice Order. These responses can be categorized as follows: 43 were general inquiries; 23 members voiced their support for the Settlement Agreement; 14 expressed a wish to opt out; and 4 objected to the proposed settlement.

I observe that the deadline for opting out or objecting to the Settlement Agreement – as set out in the Notices – has now passed. The opt-outs and objections were included as exhibits to the Counsel Affidavit. [ 47 ] I agree with Mr. Lin that the number of opt-outs is small compared to the size of the Class. Furthermore, some of the opt-outs appear to have been sent due to confusion as to whether these Airbnb customers were included or not in the Class definition.

With respect to the four objections, two complaints regarded the type of remedy available (i.e., a non-cash-convertible Credit to be used on the Airbnb Platform) and two objectors found the maximum amount of the Credit (i.e., $45) too low. One of the complainants who initially objected to the non-cash nature of the Credit distribution voiced some support after Class Counsel explained to him the rationale for the non-cash structure of the settlement. I note that none of the objectors attended the settlement approval hearing before this Court. [ 48 ] I also agree with Mr.

Lin that the few objections received do not detract from the fact that the proposed Settlement Agreement, for the Class as a whole, is fair and reasonable and in their best interests. Having considered all of the objections received, I am of the view that they are not sufficient to conclude that the Settlement Agreement should not be approved. The fact that a settlement is less than ideal for any particular class member is not a bar to approval for the Class as a whole ( Condon at para 69 ). (

d) Degree and nature of communications between Class Counsel and Class members [ 49 ] The degree and nature of communications between Class Counsel and Class members is another important factor to consider for the approval of the Settlement Agreement. As will be discussed below in

section III.B, it is also, in my view, a factor having an impact on the approval of Class Counsel Fees. [ 50 ] In this case, there is no doubt that Class Counsel and Mr. Lin have evidently communicated well. With regard to the communications between Class Counsel and Class members more generally, since the commencement of this Class Action, Class Counsel has maintained and updated a website to publish basic information regarding the case, including a mailing list that allows interested individuals to subscribe for updates.

Court documents and other records have been posted on this website for Class members’ review. Prior to the publication of the Notices, there were 70 individuals subscribed to that mailing list, and that number increased to 673 individuals after the Notices announcing the settlement approval hearing were distributed. [ 51 ] After the conclusion of the Settlement Agreement, the Notices were sent by e-mail to all the Class members who registered with Class Counsel and provided valid e-mail addresses. Class Counsel also posted the Notices and the Settlement Agreement on their dedicated website for the Class members.

As indicated above, the Claims Administrator provided a report detailing the delivery of the Notices, which showed that the Notices were widely disseminated to Airbnb customers. I agree with Mr. Lin that, in light of the foregoing, sufficient steps were taken to provide notice of the Settlement Agreement to the Class members. [ 52 ] However, in determining the approval of a proposed class action settlement, the Court’s analysis must not look solely at the existence of communications to class members and at the efforts deployed by class counsel to distribute such communications in an adequate way.

In the exercise of its role, the Court must also review and consider the actual contents of the communications with class members, in light of the proposed settlement agreement and of the evidence provided at the settlement approval motion, and assess whether sufficient information has effectively been provided to the class members to allow them to make an informed decision about the proposed settlement. [ 53 ] In this case, further to my review of the evidence provided by Mr.

Lin on this motion, I must conclude that Class Counsel’s communications with Class members fall short of the mark to meet the requirements of an adequate, full and frank disclosure of the contemplated Settlement Agreement. In other words, there were some important shortcomings in the informative value of the Notices sent to the Class members. I understand that Class members could have access to the Class Counsel’s website and to the Settlement Agreement itself, and that they were invited to do so at the end of the Notices.

However, the actual text of both the short-form and long- form Notices were short on details regarding several key features of the proposed Settlement Agreement.

More specifically: • the Notices did not specify that the total Settlement Amount was $6,000,000; • the Notices did not provide information on the actual amount or on the percentage base of Class Counsel Fees; • while they mentioned that the Credit of $45 was a maximum amount which could be lowered depending on the number of claimants, the Notices did not provide any additional detail on the likely or expected take-up rate or on the amount of the effective Credit likely or expected to be received by the Class members. [ 54 ] To the extent that the purpose of the Notices was to properly inform the Class members of the Settlement Agreement in order to

give them the means to decide to accept it, opt out or voice an objection, I find that, in light of the evidence now before me, the Notices sent to the Class members did not provide a sufficiently transparent, informative and adequate disclosure to the Class members. Of course, I cannot change the Notices retroactively.

But, in class actions involving consumer-related issues such as this one, which involve thousands of ordinary consumers affected by pricing or marketing practices or other business conduct, communications of a proposed settlement agreement to the potential class members ought to be much more transparent and forthcoming for the class members than what has been done by Class Counsel in this case. [ 55 ] In my view, in such class action settlement agreements, the notices to the class members should always at least disclose, in clear terms and in both the short-form and long-form versions of the notices, the following basic information about the proposed settlement agreement:

i) the quantum of the total settlement amount; ii) the precise list of deductions from the total settlement amount (such as class counsel fees or administration expenses) when these impact the net settlement amount to be received by the class members; iii) the quantum of these various deductions (including the quantum of the class counsel fees); iv) the percentage of the total settlement amount to be received by class counsel as legal fees;

v) the maximum compensation amount to be received by each class member, if any; and vi) the likely or expected effective compensation amount, or range of compensation amounts, to be received by the class members, when class counsel has information or is able to estimate the expected take-up rate and/or the likely or expected net compensation amount to be received.

Generally speaking, having access to such minimal information is needed by the class members in order for them to be able to make a well-informed decision about what a proposed settlement agreement actually offers, and on whether they shall support it, opt out or object to it. In the current case, most of these basic elements were not included in the Notices to Class members, though some of them could be gleaned from the actual Settlement Agreement made indirectly available to Class Counsel through the Class Counsel’s website.

In my opinion, to simply provide a link to a 27-page Settlement Agreement as was done in this case does not amount to a satisfactory disclosure of the above-mentioned information to the Class members, and can hardly be considered fair, reasonable, and in the best interests of the Class. [ 56 ] Though it is impossible to measure what would have been the effect of the disclosure of the above-listed information in the Notices, it is fair to say that it would likely have had a certain impact on the reactions, expressions of support or objections of the Class members to the proposed Settlement Agreement. [ 57 ] For those reasons, I conclude that the degree and nature of communications between Class Counsel and Class members is at best a neutral factor for the approval of the Settlement Agreement. (

e) Amount and nature of pre-trial activities, including investigation, assessment of evidence and discovery [ 58 ] At the time the Settlement Agreement was executed, very limited investigation, discovery, evidence gathering and pre-hearing work had been completed by the parties, meaning that the amount and nature of pre-trial activities necessary to take the case to trial remained high.

Moreover, Airbnb’s evidence showed that Airbnb does not have precise records of Class members that reserved an accommodation matching the parameters of a previous search made by the individual on the Airbnb Platform, as the Class was defined in this Class Action. [ 59 ] Therefore, an important amount of necessary pre-trial work still had to be completed, and the evidence before me indicates that the parties had a good sense of the extent of this significant remaining pre-trial work.

In the circumstances, I am satisfied that the parties were properly positioned to understand the amount and nature of pre-trial activities linked to continued litigation at the time of choosing to settle. This factor thus supports the approval of the Settlement Agreement. (

f) Arm’s length bargaining between the parties and absence of collusion during negotiations [ 60 ] There is a strong presumption of fairness when a proposed class action settlement, which was negotiated at arm’s-length by experienced counsel for the class, is presented for Court approval. Here, I am satisfied that the negotiations leading to the Settlement Agreement were arm’s length and adversarial in nature between Class Counsel and counsel for Airbnb, spanning several months. This, again, supports the approval of the Settlement Agreement. (

g) Recommendation and experience of Class Counsel [ 61 ] Class Counsel are of the view that the proposed Settlement Agreement is fair, reasonable and in the best interests of the Class members. They recommend approval by the Court. [ 62 ] Class Counsel and their firms are experienced, well-regarded plaintiffs’ class action counsel. They have a wealth of experience in a substantial number of class actions to draw upon. I have no doubt that their decision to settle this case reflects their best exercise of judgment.

Class counsel’s recommendations are significant and are given substantial weight in the process of approving a class action settlement ( Condon at para 76 ). This is the case here. (

h) Future expense and likely duration of litigation [ 63 ] Courts have recognized that an immediate payment to class members through a settlement agreement is a factor in support of a proposed settlement. In this case, if there is no settlement now, counsel for the parties anticipate that a long time will be needed for a trial on the merits and for potential appeals, with the need for expert evidence. I am satisfied that this is another factor militating in favour of finding that the proposed Settlement Agreement is fair and reasonable and in the best interests of the Class. (

i) Any other relevant factor or circumstance [ 64 ] Mr. Lin submits that the Court should also take into account that all three goals of class actions will likely be achieved by way of this Settlement Agreement, namely, access to justice, judicial economy and behavioural modification. I agree.

[ 65 ] In terms of access to justice, eligible Class members will obtain some monetary compensation from Airbnb by way of the Credit though, as I will discuss in more detail in

section III.B.2.b below, the evidence suggests that this compensation is expected to be extremely modest. [ 66 ] Judicial economy will also be achieved, as a long litigation with potential appeals will be avoided and the procedure for the payment of the Credit to the Class members will be simple, with limited Court supervision being required. [ 67 ] Finally, behavioural modification has already been accomplished due to the combination of this Class Action and the Quebec Action, as Airbnb modified its pricing display across Canada in June 2019 whilst Mr. Lin’s Class Action was underway. Counsel for Mr.

Lin also rightly points out that the Class Action also has an impact for actual and potential wrongdoers throughout the Canadian economy since, in the Certification Judgment, the Court released a comprehensive decision giving teeth to the dormant

section 54 of the Competition Act , thereby also contributing to potential behaviour modification of other " “drip-pricing” " practices, to the benefit of Canadian consumers.

(3) Conclusion on the Settlement Agreement [ 68 ] After considering all of the above-mentioned factors, I am satisfied that I was presented with sufficient evidence to allow me to make an objective, impartial and independent assessment of the fairness and reasonableness of the proposed Settlement Agreement ( Condon at para 38 ). A settlement is never perfect, and the Court needs to keep in mind that a settlement is always the result of a compromise, but that it puts an end to the dispute between the parties and provides certainty and finality.

In this case, I find that the Settlement Agreement is fair, rea sonable, and in the best interests of the Class and ought to be approved, including the appointment of the Claims Administrator. B. Class Counsel Fees [ 69 ] I now turn to the Class Counsel Fees. Here, Class Counsel request that the Court award them an amount of $1,980,000 plus applicable taxes for Class Counsel Fees, representing 33% of the Settlement Amount, to be paid from the Settlement Amount. Airbnb does not oppose this request.

Rightly so, Class Counsel are not asking the Court to approve the fees payment of $2,000,000 referred to in the Settlement Agreement, an amount that, in any event, they would not have been entitled to receive under the Retainer Agreement.

(1) The law relating to approval of class counsel fees [ 70 ] Rule 334.4 provides that all payments to counsel flowing from a class proceeding must be approved by the Court.

The overarching test applicable to class counsel fees is that they have to be " “fair and reasonable in all of the circumstances” " ( Condon at para 81 ; Manuge v Canada , 2013 FC 341 [ Manuge ] at para 28 ). [ 71 ] The Court has established a non-exhaustive list of factors to assist in the determination of whether the class counsel fees are fair and reasonable ( Wenham v Canada (Attorney General) , 2020 FC 590 [ Wenham 2 ] at para 33; McLean v Canada , 2019 FC 1077 [ McLean 2 ] at para 25; McCrea v Canada , 2019 FC 122 at para 98 ; Condon at para 82 ; Manuge at para 28 ).

Again, these factors are similar to the factors retained by the courts across Canada.

They include, in what I view as their order of relative importance: 1) risk undertaken by class counsel; 2) results achieved; 3) time and effort expended by class counsel; 4) complexity and difficulty of the matter; 5) degree of responsibility assumed by class counsel; 6) fees in similar cases; 7) expectations of the class; 8) experience and expertise of class counsel; 9) ability of the class to pay; and 10) importance of the litigation to the plaintiff. [ 72 ] As is the case for the factors governing the approval of settlement agreements, these factors are non-exhaustive, and their weight will vary according to the particular circumstances of each class action.

However, the risk that class counsel undertook in conducting the litigation and the degree of success or results achieved for the class members through the proposed settlement remain the two critical factors in assessing the fairness and reasonableness of a contingency fee request by class counsel ( Condon at para 83 ).

The risk undertaken by class counsel includes the risk of non-payment but also the risk of facing a contentious case and a difficult opposing party ( Wenham 2 at para 34). [ 73 ] It has long been recognized by the courts that, for class proceedings legislation to achieve its policy goals, class counsel must be well rewarded for their efforts, and the contingency agreements they negotiate with plaintiffs should generally be respected.

The percentage-based fee contained in a retainer agreement is presumed to be fair and should only be rebutted or reduced " “in clear cases based on principled reasons” " ( Condon at para 85 , citing Cannon v Funds for Canada Foundation , 2013 ONSC 7686 [ Cannon ] at para 8 ).

[ 74 ] That being said, it is also the Court’s role to protect the class, and there may be circumstances where the Court has to substitute its view for that of class counsel, in the interest of the class. The Court must consider all the relevant factors and then ask, as a matter of judgment, whether the class counsel fees fixed by the proposed agreement are fair and reasonable and maintain the integrity of the profession ( LG Chem at para 46 ). This is especially true where, as in this case, the amount of class counsel fees comes out of the global s ettlement amount available to class members.

Here, it is clear that the Net Settlement Funds available for distribution to Class members represents the difference between the Settlement Amount and the sum of Administration Expenses, Class Counsel Fees, Honorarium and applicable taxes. [ 75 ] In the same vein, where the fee arrangement with class counsel is part of the settlement agreement, the Court must decide on the fairness and reasonableness of the proposed fee arrangements in light of what class counsel has actually accomplished for the benefit of the class members.

The class counsel fees must not leave the impression or bring about conditions of settlement that appear to be in the interests of the lawyers, but not in the best interests of the class members as a whole. Stated differently, there has to be some proportionality between the fees awarded to class counsel and the degree of success obtained for the class members. [ 76 ] In this case, Class Counsel apply to this Court for fees in an amount representing 33% of the value of the Settlement Amount, or $1,980,000, plus applicable taxes.

Class Counsel submit that this is " “consistent with” " the terms of the Retainer Agreement. I pause to observe that, in the Retainer Agreement signed by Mr. Lin and Class Counsel in October 2017,

Section 10 provides that Class Counsel’s legal fees " “ shall not exceed thirty-three percent (33%) ” " [both emphases in original] of the total amounts recovered by the Class. Two mathematical examples are given at

Section 12 of the Retainer Agreement, where the words " “shall not exceed” " are again used and repeated for each example. In other words, while it is not incorrect to state that the Class Counsel Fees amount presented to the Court for approval is " “consistent” " with the Retainer Agreement, I must underline that it nonetheless represents the upper maximum limit of what was expressly contemplated in the Retainer Agreement signed by Class Counsel and Mr. Lin.

(2) Application to this case (

a) Risk undertaken by Class Counsel [ 77 ] The risk factor refers to the risk undertaken by Class Counsel when the class proceeding is commenced. It is measured from the commencement of the action, not with the benefit of hindsight when the result looks inevitable. This risk includes all of the risks facing class counsel, such as the liability risk, recovery risk, and the risk that the action will not be certified as a class action or will not succeed on the merits ( Condon at para 83 ).

The litigation risk assumed by class counsel is a function of the probability of success, the complexity of the proceedings, and the time and resources expended to pursue the litigation. [ 78 ] There is no doubt in this case that a significant risk was undertaken by Class Counsel. Class Counsel did not seek any third-party litigation funding and bore 100% of the litigation risk. Class Counsel also provided a full indemnification to Mr. Lin in the event of any adverse cost awards. More importantly, there were real risks related to the fact that Mr.

Lin’s Class Action could not be certified at all, considering the extremely limited history of

section 54 and the novelty of the

interpretation and approach proposed by Class Counsel in this proceeding. [ 79 ] Class Counsel certainly deserves credit and recognition for having brought a recourse based on sections 36 and 54 of the Competition Act and for having developed an innovative

interpretation of

section 54 on " “double ticketing,” " something that had never been done in a competition class action. Innovation is what took human beings from caves to computers, and it certainly merits to be rewarded, given the risks that are always inherent to any form of innovation. [ 80 ] In light of the foregoing, the risk undertaken by Class Counsel in this case is, of course, a positive factor supporting the approval of the Class Counsel Fees. (

b) Results achieved [ 81 ] In terms of the results achieved for the Class members, I find that they are mixed. Here, the Court has to distinguish between the non-monetary results stemming from the Settlement Agreement, and the monetary results. I accept that, broadly speaking, the results captured in the Settlement Agreement, both monetary and non-monetary, somehow improved the situation for Class members. However, there is a huge difference in the relative gains for Class members in terms of non-monetary and monetary benefits. (

i) Non-monetary benefits [ 82 ] In this case, I agree that there are significant non-monetary benefits to the Class members, to the Airbnb customers in general, and to Canadian consumers. The most significant benefit consists in the behavioural modification of Airbnb, as Airbnb adjusted the Airbnb Platform throughout Canada in June 2019. Airbnb now displays an all-inclusive price for all accommodation bookings, excluding applicable taxes, at every step of the search and booking process. In other words, the pricing display practice that prompted Mr. Lin’s Class Action has now ceased.

This is likely the most significant aftermath of Mr. Lin’s Class Action, and it reverberates from the Class members to all existent and future Airbnb customers. I point out, however, that this result cannot be said to be an immediate effect of the Settlement Agreement itself, as Airbnb’s behavioural modification preceded it and was even implemented before the Certification Judgment in this case. I further observe that the Quebec Action was also an instrumental factor leading up to Airbnb’s behavioural modification in June 2019. Nevertheless, I am satisfied that Mr.

Lin’s Class Action was certainly one of the contributing elements having led to Airbnb’s behavioural modification.

Such behavioural modification is one of the three well-entrenched objectives of class actions ( L’Oratoire Saint-Joseph du Mont-Royal v JJ , 2019 SCC 35 at para 6 , citing Hollick v Toronto (City) , 2001 SCC 68 at para 15 , Western Canadian Shopping Centres Inc v Dutton , 2001 SCC 46 at paras 27-29 , and Vivendi Canada Inc v Dell’Aniello , 2014 SCC 1 at para 1 ). [ 83 ] In weighing the non-monetary results achieved by Class Counsel’s work, it is also appropriate for the Court to consider to what extent the two other main objectives of class actions – namely, access to justice and judicial economy – have been met by the proposed

Settlement Agreement. Mr. Lin’s Class Action provided access to justice for hundreds of thousands of Class members where, absent the Class Action, the scope of the individual claims would not justify litigation.

The class action regime in the Rules was designed to encourage class counsel to advance actions like this one, where the individual claims are relatively small because, on an aggregate basis, entrepreneurial class counsel can earn a fee that justifies the risks associated with advancing the class action and the time invested ( Condon at paras 101-102 ). [ 84 ] There are also non-monetary benefits that do not solely benefit the Class members but have positive repercussions on a larger scale, for all Canadian consumers.

It is well accepted that a change in a business conduct (such as pricing or marketing practices) is a recognized objective of class actions. Here, Mr. Lin’s Class Action will serve as a legal precedent and authority in " “drip-pricing” " practices more generally, bearing in mind that the Certification Judgment was issued in the context of the low-hurdle test at the certification stage, and that the determination of the merits of the legal arguments on

section 54 of the Competition Act still remains uncertain. I also agree with Class Counsel that this matter will indirectly serve as a deterrent for potential wrongdoers in the Canadian marketplace, who will now have a better knowledge that " “drip-pricing” " is a practice that can run afoul of applicable laws in Canada. [ 85 ] I further agree that Mr. Lin’s Class Action has successfully revived and resurrected

section 54 of the Competition Act , which had been dormant for several decades. Now, the Canadian public, including merchants and consumers, has guidance on how best to comply with this Competition Act provision on " “double ticketing,” " even in the digital economy. As I indicated at the hearing before this Court, we do not know yet whether

section 54 is simply on life support further to the Certification Judgment and whether it will be able to survive a test on the merits, but Mr. Lin’s Class Action has certainly awakened a sleepy

section 54 . [ 86 ] I am therefore satisfied that the non-monetary results reached in this case are a positive factor for the approval of the Class Counsel Fees. (ii) Monetary benefits [ 87 ] Moving to the monetary front, the results achieved by the Settlement Agreement for the Class members are much more humble. In fact, based on the evidence before me, the monetary success for Class members is expected to be somewhat anemic.

This, in my view, is the Achilles’ heel hampering the Class Counsel Fees’ request in this case. [ 88 ] True, the Settlement Agreement and the Notices refer to a Credit of " “up to” " $45 in value for each eligible Class member. However, the evidence on the record (mostly contained in the Counsel Affidavit) reveals that what Class members are likely to receive from the settlement will not be very substantial, and far lower than the publicized $45.

First, the evidence on the Quebec Settlement indicates that the take-up rate in that matter was effectively about 30%, and translated into an actual credit of approximately $9.50 per individual Quebec class member, well below the maximum of $45 that was also set out in the Quebec Settlement.

Class Counsel expects that the take-up rate will be similar in this Settlement Agreement, although it could be affected by some other factors, in particular the pandemic. [ 89 ] Second, the evidence on the record of this motion allows the Court to calculate the likely Credit expected to be effectively received by each Class member. This approximate assessment goes as follows. Airbnb estimates that there will be approximately 1,473,952 eligible claimants in this matter.

Assuming a take-up rate of 30% similar to the Quebec Settlement (which is what Class Counsel expects), that would translate into approximately 442,200 Class members exercising their right to claim a Credit. As to the Net Settlement Funds available to be distributed among Class members, they can be estimated to revolve around $3,420,500 (i.e., the Settlement Amount of $6,000,000, less the requested $1,980,000 for Class Counsel Fees, $322,500 for Administration Expenses, and some $277,000 for applicable taxes).

This would result in an effective Credit of just above $8 for each Class member (i.e. $3,420,500 divided by 442,200 Class members), far less than the maximum of $45 referred to in the Notices to the Class members. I acknowledge that this back-of-the-envelope calculation is only a rough estimate but, even if I factor in a sizeable margin of error, the evidence on the record certainly allows the Court to infer that the expected Credit to be distributed to eligible Class members is more likely to gravitate around $10 than the publicized maximum of $45. [ 90 ] I make another observation.

The success or result achieved in any class action settlement is not an absolute figure but rather a relative one. It always needs to be assessed in relation to what was the anticipated full recovery of the damages alleged to have been suffered by the class members in the class action. This is what allows the Court to determine the fairness and reasonableness of the expected compensation brought about by a settlement agreement. In the current case, the Court is in a difficult position to do so since Mr.

Lin and Class Counsel have not provided any estimate of what would have been the expected full recovery of the damages claimed in the Class Action. There is no measure of what the alleged price difference between the first price and the final price posted on the Airbnb Platform during the Class period would amount to, for all Class members affected. Or even an indication of what was the average price difference for the Class members. In other words, the Court has no information on the expected full recovery for Class members.

Broadly speaking, the Court always needs to know what would have been the estimated full recovery of a class action in order to assess the recovery rate of a proposed settlement and to figure out the relative success achieved by the settlement. In this case, the only benchmark available to the Court is Mr. Lin’s own example: based on Mr. Lin’s personal situation as outlined in the Certification Judgment, his claim against Airbnb represented an amount of approximately $92. The maximum Credit of $45 would thus represent a recovery rate slightly below 50% for Mr.

Lin, and the likely or expected compensation amount of less than $10 estimated above would represent a much paler recovery rate of about 10%. [ 91 ] In sum, the evidence before me on this motion indicates that, no matter what metric is being used, the monetary compensation likely or expected to be received by the Class members through the Credit will be extremely modest, and will likely lie at the low end of the spectrum for Class members. For all those reasons, I am not satisfied that the monetary results achieved by the Settlement Agreement are a positive factor for the approval of the Class Counsel Fees.

Quite the contrary. (

c) Time expended by class counsel [ 92 ] The time expended by class counsel can also be a helpful factor in the approval of class counsel fees, even in cases where the class

counsel fees are contingency fees. [ 93 ] Over the years, the courts have expressed a preference for utilizing percentage-based fees in class actions (see, e.g., Mancinelli v Royal Bank of Canada , 2017 ONSC 2324 at para 52 ). A percentage-based fee is paid based on a percentage of the amounts recovered and should be awarded at a level that appropriately incentivizes and rewards class counsel ( Condon at para 84 ). Contingency fees help to promote access to justice in that they allow class counsel, rather than the plaintiff, to finance the litigation.

Contingency fees also promote judicial economy, encourage efficiency in the litigation, discourage unnecessary work that might otherwise be done simply to increase the lawyers’ fees based on time incurred, properly emphasize the quality of the representation and the results achieved, ensure that counsel are not penalized for efficiency, and reflect the considerable costs and risks undertaken by class counsel ( Condon at paras 90-91 ).

This Court and the courts across Canada have recognized that the viability of class actions depends on entrepreneurial lawyers who are willing to take on these cases, and that class counsel’s compensation consequently must reflect this reality ( Condon at paras 90- 91 ). [ 94 ] The percentage-based fee set out in a contingency fee retainer agreement is therefore presumed to be fair and " “should only be rebutted in clear cases based on principled reasons” " ( Condon at para 85 , citing Cannon at para 8 ).

Examples of " “principled reasons” " where a court may rebut the presumption that a percentage-based fee is fair include situations where:

i) there is a lack of full understanding or true acceptance on the part of the representative plaintiff; ii) the agreed-to contingency amount is excessive; or iii) the presumptively valid contingency fee would result in a fee award so large as to be unseemly ( Condon at para 85 ). [ 95 ] I would add that situations where the class counsel fees are not commensurate with the gains of class members or are not aligned with the terms of the underlying retainer agreement with the representative plaintiff also qualify as other " “principled reasons” " where the courts may be justified to revisit a percentage-based contingency fee agreement.

Importantly, the proposed class counsel fees need to be considered in relation to the actual result achieved for the Class members, especially when the retainer agreement provides for the possibility of a range or margin of appreciation for the effective percentage-based fees to be paid. [ 96 ] The main alternative to a percentage-based fee is applying a " “multiplier” " to class counsel’s time spent in a matter.

However, the use of a multiplier approach as the basis for approving class counsel fees has been criticized for, inter alia , encouraging inefficiency and duplication and discouraging early settlement ( Condon at para 86 ). Nevertheless, it can serve as a " “useful check” " ( McLean 2 at para 37).

According to Class Counsel, the range of multipliers generally accepted by the Canadian courts in class action settlements is approximately 1.5 to 3.5. [ 97 ] Here, it is clear that Class Counsel have done extensive work over the past four years to reach the Settlement Agreement, including litigating certification through hearings before this Court and the FCA, and devising the settlement for the Class members. The evidence on this motion reveals that Class Counsel have collectively expended 1,628 hours in total up to the filing of the motion, with their services valued at $723,357.50.

Class Counsel also expect that they will be required to spend a material number of additional hours to finalize the settlement, if the Settlement Agreement is approved. Class Counsel will notably have to oversee the publication and distribution of the notices of settlement approval; continue to implement and oversee the administration of this Class Action until the settlement distribution is complete; and liaise with the Class members who may have questions about the Settlement Agreement.

There is nothing unreasonable in the details examined by the Court and I accept Class Counsel’s evidence as an accurate reflection of the time value of the necessary professional services they rendered. [ 98 ] Based on the requested Class Counsel Fees of $1,980,000, this would mean a multiplier varying between 2.3 and 2.7, depending on the additional work needed to implement the Settlement Agreement. Overall, I conclude that the time expended by Class Counsel is a positive factor supporting the approval of the Class Counsel Fees. (

d) Complexity of issues [ 99 ] For the reasons discussed above, there is no question that this class action proceeding raised complex and difficult issues surrounding sections 36 and 54 of the Competition Act . To reiterate, in his Class Action, Mr. Lin brought forward an innovative argument on

section 54 and the treatment of fragmented pricing or " “drip-pricing” " in the digital economy.

Section 54 on " “double ticketing” " was created before the arrival of the digital economy and the emergence of online commerce, and the question of how the provision could extend and apply to current technologies and commercial practices is far from being simple and free from doubt. This is a positive factor for the Class Counsel Fees. (

e) Degree of responsibility assumed by Class Counsel [ 100 ] Class Counsel, consisting of two small firms, took on full responsibility for this case, and bore 100% of the risk of the litigation. This, again, is a positive factor. (

f) Fees in similar cases [ 101 ] Looking at the issue of fees in comparable cases, Class Counsel submit that, at 33%, the percentage of the Settlement Amount claimed as Class Counsel Fees is " “comparable” " to percentages in settled class actions in the Canadian common law jurisdictions. With respect, I believe that this qualification deserves to be nuanced.

I am instead of the view that a 33% contingency fee, while perhaps not unusual, nonetheless sits at the high end of the generally accepted range of court-approved fees for class counsel. [ 102 ] The typical range for contingency fees has been recently described as being " “15% to 33% of the award or settlement” " in British Columbia ( Kett v Kobe Steel, Ltd , 2020 BCSC 1977 [ Kobe Steel ] at para 54 ).

In the precedent of this Court cited by Class Counsel in support of their claimed 33% contingency fees (i.e., Condon ), the Court referred to a range of " “up to 30%” " and in fact affirmed a 30% contingency fee in that case, not 33% ( Condon at paras 92, 111 ). I do not dispute that some cases confirmed the reasonableness of percentage-based fees of 33% (see, e.g., McLean v Cathay Pacific Airways Limited , 2021 BCSC 1456 ; Cannon ; Dwor et al v Car2Go et al , VLC-S-S-205424, unreported settlement approved on September 20, 2021), but these matters appear to be the exception rather than

the rule. Class Counsel also referred to precedents where the accepted contingency fee was at 30% or less in Zouzout c Canada Dry Mott’s Inc , 2021 QCCS 1815 , at about 31.5% in Hurst c Air Canada , 2019 QCCS 4614 , and between 15% to 25% in Abihsira c Stubhub inc , 2020 QCCS 2593 . Moreover, in the Quebec Settlement, the court-approved contingency fee was 25%.

I am mindful of the fact that the Quebec Settlement was a pre-certification settlement with no contested certification hearing, and that it involved a different theory of liability based on legislations other than sections 36 and 54 of the Competition Act . Nonetheless, it remains the closest precedent to the current Class Action. [ 103 ] As rightly pointed out by Class Counsel, the issue to be determined is whether the requested Class Counsel Fees are fair and reasonable in the circumstances .

In this case, despite significant positive results in terms of behavioural modification, the Settlement Agreement brings about a fairly limited success for the Class members on the monetary front, with a large discrepancy between the Class Counsel Fees sought and the likely or expected recovery rate of the Class members. This is an important factor to take into account.

In the circumstances of this case, I am therefore not convinced that the low expected monetary return to Class members through the Credit can justify and support a percentage-based contingency fee of 33% that would reside at the high end of the spectrum observed in comparable cases. (

g) Expectation of the Class [ 104 ] Another factor to consider is the expectation of the Class members as to the amount of counsel fees. The fact that the representative plaintiff, Mr. Lin, supports the Class Counsel Fees request is no indicator of the Class members’ expectations. Based on the limited evidence before me, I cannot tell what is the expectation of the Class on the legal fees front, as the Class members were not truly aware of the Class Counsel Fees claimed. [ 105 ] As mentioned above, the Notices provided no details on Class Counsel Fees .

It is true that there was no opposition from Class members on Class Counsel Fees, but it may well be because the Class members were kept in the dark with respect to this issue. I again acknowledge that the Class members could have accessed the Settlement Agreement itself, where the amount of the Class Counsel Fees were precisely laid out; but this is a 27-page document that the average Class member is unlikely to read. Providing a link to the full text of a 27-page Settlement Agreement is not an acceptable substitute to an adequate, full and frank disclosure on the Class Counsel Fees in the Notices themselves.

As indicated above at paragraph 55 of these Reasons, notices to class members need to be transparent on the key terms of proposed class action settlement agreements, including on the issue of class counsel fees, in order to allow the Court to properly assess the fairness and reasonableness of proposed settlements and class counsel fees. In this case, I do not know what would have happened if the proposed Class Counsel Fees had been openly disclosed to the Class members in the Notices.

But, given that – even with the existing Notices – there were some objections to the low level of the publicized $45 Credit, it may well have triggered more objections from Class members had they been properly informed about the real magnitude of the Net Settlement Funds, the percentage fees of Class Counsel and the likely or expected monetary amount to be distributed to the Class members. [ 106 ] In my view, in situations like this one, where the likely or expected recovery to class members is limited and resides at the low end of the spectrum, notices to class members should clearly set out the total amount of the class counsel fees and the percentage that class counsel are seeking to receive from a settlement agreement, so that class members can have a full understanding of the agreement presented to them for approval.

Communications between class counsel and class members need to be transparent, including on class counsel fees, so that class members can be in a position to make a well-informed decision on their approval and support of both the proposed settlement agreement and class counsel fees.

Especially in situations where, as here, Class Counsel Fees eat up an important portion of the Net Settlement Funds available to Class members. [ 107 ] Therefore, I am not persuaded that the Class members could fairly weigh this issue of Class Counsel Fees when deciding whether to opt out or to participate in the lawsuit going forward ( Condon at para 107 ). This is a neutral factor in assessing the fairness and reasonableness of the Class Counsel Fees. (

h) Quality and experience of Class Counsel [ 108 ] There is no doubt as to Class Counsel’s standing in the class action legal community and in the areas of law relevant to this litigation. Evidence was provided that Class Counsel have practised in class actions for many years. They have a breadth of experience in litigating class actions, and have collectively negotiated settlements of several class actions. This is, of course, a positive factor favouring the approval of the Class Counsel Fees. (

i) Ability of the Class to pay [ 109 ] It is also obvious that Class members did not and do not have the ability to pay for the services of Class Counsel. This, once again, is a positive factor in the Court’s assessment of the Class Counsel Fees. (

j) Importance of litigation to the plaintiff [ 110 ] Finally, I find that this Class Action is of limited importance to Mr. Lin and is a neutral factor in the determination of the fairness and reasonableness of Class Counsel Fees. This case is of no outstanding importance to Mr. Lin or to the Class members, in the sense that it does not involve human rights violation or personal injury. It has an impact for consumer protection and the deterrence of potential anti-competitive behaviour, but nothing allows me to conclude that this matter would qualify as being a " “litigation of importance” " to Mr. Lin or the Class members.

(3) Conclusion on the Class Counsel Fees [ 111 ] Looking at all the above-mentioned factors cumulatively, I am not satisfied that the Class Counsel Fees requested to be approved by Class Counsel in this case can be qualified as fair and reasonable in the circumstances, when considered in light of the modest results

achieved for the Class members on the monetary front. In other words, in the particular circumstances of this case, the requested 33% percentage-based fees cross too many redlines to be approved as such. [ 112 ] Important " “principled reasons” " lead me to this conclusion. I cannot help but note that the proposed 33% contingency fee is not entirely " “consistent” " with the Retainer Agreement concluded at the commencement of the Class Action. The Retainer Agreement provided, in underlined and bolded terms, that the Class Counsel legal fees " “shall not exceed” " 33% of the recovered sums.

Nevertheless, the Class Counsel Fees sought in this motion are at the extreme high end of what the Retainer Agreement envisaged. In addition, the requested 33% fee also sits at the top of the range of percentage-based fees awarded by the courts in comparable cases. In sum, the legal fees sought by Class Counsel on this motion are at the maximum contemplated by the Retainer Agreement and in comparable cases, in a context where the likely or expected monetary result for the Class members sits at the totally opposite end of the spectrum as far as their anticipated recovery is concerned.

This is not fair and reasonable. [ 113 ] I find it unjustifiable, in light of the highly modest success likely or expected to be achieved for the Class members on the monetary front, that Class Counsel could be entitled to receive what they themselves recognized as being the top end of the spectrum for their contingency fees in the Retainer Agreement.

When class counsel agree to fees up to a certain amount in the context of class actions, it has to mean something, and it goes without saying that achieving a low or short result for the class members does not sound like a situation where it is fair and reasonable to be granted the maximum of contemplated fees. [ 114 ] In view of the significant contrast between the Class Counsel Fees sought, which are at the very top of the range contemplated in the Retainer Agreement and in comparable cases, and the expected monetary benefit to Class members, which will likely grant them a very low rate of recovery, I find that the requested Class Counsel Fees are disproportionate in relation to the overall results achieved for the Class, notwithstanding the commendable success in terms of Airbnb’s behavioural modification.

Put differently, while the success achieved for Class members is at best modest, the fees requested by Class Counsel are anything but modest. This does not fit the definition of being " “fair and reasonable in the circumstances.” " [ 115 ] There is no magic formula to determine what should be the appropriate percentage-based fees of class counsel in a class action settlement.

It is a matter of judgment, based on the particular circumstances of any given case and the interests of the class, bearing in mind – in the current case – the material non-monetary benefits in terms of behavioural modification and the need to adequately reward entrepreneurial Class Counsel who were willing to undertake important risks and spent significant resources on this litigation . In the circumstances, I will therefore slightly reduce the Class Counsel Fees to 30% or $1,800,000, which will remain in the upper part of the range and close to the maximum set out in the Retainer Agreement.

By any measure, Class Counsel will still be very well compensated for their efforts. I am mindful of the fact that this reduction in Class Counsel Fees will bring diminutive material benefit to each Class member in terms of an increase in the likely or expected average Credit to Class members. But, in my judgment, this reduction will at least bring the Class Counsel Fees within fair and reasonable territory. [ 116 ] As the British Columbia Supreme Court recently stated in Kobe Stee

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