Ontario Consumer Class Actions DRAFT Distribution Protocol

Transcription

1 Ontario Consumer Class Actions DRAFT Distribution Protocol SUMMARY OF SETTLEMENT DISTRIBUTION PRINCIPLES 1. The following provides a summary of the settlement distribution principles to be applied under this Distribution Protocol. The Distribution Protocol will operate on the following basis: a) Settlement Class Members with Approved Claims will receive a Minimum Settlement Benefit of $50 dollars per claimant subject to any pro-ration that may be required under the rules of this Distribution Protocol. If the claims results warrant an increase to the Minimum Settlement Benefit, class counsel and the claims administrator may increase the Minimum Settlement Benefit to a maximum of $75; b) Settlement Class Members with Approved Claims may also be eligible to receive additional amounts above the Minimum Settlement Benefit with reference to the Loan Fees and Interest charges established under the rules of this Distribution Protocol in connection with their Eligible Loans; c) Amounts payable to Settlement Class Members with Approved Claims above the Minimum Settlement Benefit will be calculated with reference to each Settlement Class Member s Claimant Input Value. Settlement Class Members will receive payment for their Claimant Input Value above the Minimum Settlement Benefit amount on a pro-rata basis as can be paid by the amounts available in the Net Settlement Fund up to the maximum of the full Claimant Input Value or as otherwise provided for by the terms of this Distribution Protocol; and, d) Proof requirements will be reasonably and flexibly administered in order to facilitate claims by Settlement Class Members but to make reasonable protections against fraudulent or improper claims. Settlement Class Members will be given the opportunity to provide information about their Eligible Loans. Acceptable proof may be taken from either the Settlement Class Members or the data provided by Cash Store, DCPI or both. DEFINITIONS 2. For the purpose of this Distribution Protocol: a) Approved Claims means proof of an Eligible Loan or Loans and the establishment of a Claimant Input Value for the Settlement Class Member. b) Cash Store means Cash Store Financial Services Inc., The Cash Store Inc., and Instaloans Inc. c) Cash Store Claim means Timothy Yeoman v. The Cash Store Financial Services Inc., The Cash store Inc., Instaloans Inc., DirectCash Bank, DirectCash ATM Processing Partnership, DirectCash ATM Management Partnership, DirectCash

2 Payments Inc., DirectCash Management Inc., and DirectCash Canada Limited Partnership (Court File No. 7908/12 CP). d) Claimant Input Value means the amount designated to each claimant as derived from the data provided by the Cash Store, DCPI and/or the Settlement Class Member and accepted by the Claims Administrator that is compromised of the Loan Fees and Interest charged to the Settlement Class Member on an Eligible Loan(s). e) Claims Administrator means RicePoint Administration Inc. or such other claims administrator as is retained by Class Counsel and approved by the Court. f) Claims Filing Deadline means the date by which Claims (and any required supporting documentation) must be postmarked or electronically submitted in order for Settlement Class Members to be considered for settlement benefits under this Distribution Protocol, subject to the discretion of Class Counsel, the Claims Administrator, or by further order of the Court. g) Class Counsel means Harrison Pensa LLP. h) Court means the Ontario Superior Court of Justice who shall have ongoing authority and supervision with respect to the Distribution Protocol. i) DirectCash or DCPI means DirectCash Bank, DirectCash ATM Processing Partnership, DirectCash ATM Management Partnership, DirectCash Payments Inc., DirectCash Management Inc., and DirectCash Canada Limited Partnership. j) Directors & Officers Claim means Timothy Yeoman v. Gordon J. Reykdal, Michael J. L. Thompson, Halldor Kristjansson, and Edward C. McClelland (Court File No. 4172/14). k) Distribution Protocol means this plan for distributing the Net Settlement Fund to Settlement Claims Members. l) Eligible Loan(s) - means any payday loan including basic lines of credit taken on or after September 1, 2011 at an Ontario location of Cash Store or Instaloans. m) Instaloans means Instaloans Inc. n) Loan Fees and Interest means the amount of any fees, charges or interest of any kind added directly or indirectly to an Eligible Loan by any of the Defendants. o) Minimum Settlement Benefit means a payment of $50 unless reduced by proration or unless increased to as high as $75 if warranted by claims results. p) Net Settlement Funds means the aggregate of the settlement amounts recovered pursuant to the Settlement Agreements and accrued interest after payment of court-approved Class Counsel fees, disbursements, and applicable taxes,

3 including all costs associated with claims administration, all taxes (including interest and penalties) accruable with respect to income earned by the Settlement Agreements and all costs associated with providing notice to Settlement Class Members. q) Ontario Consumer Class Actions means collectively the Cash Store Claim, the Directors & Officers Claim and the Third-Party Lender Claim r) Pre-Judgment Interest Rate means interest paid pursuant to the Courts of Justice Act, RSO 1990, c. C.43 s) Settlement Agreements means the settlement agreements reached in the Ontario Consumer Class Actions. t) Settlement Class Members means any person who entered into a payday loan transaction (including basic lines of credit ) at a location of The Cash Store Inc., Instaloans Inc., or any of their Canadian affiliates in Ontario between Sept 1, 2011 and February 12, 2014 or such other date as the last payday loan was granted in Ontario at any location of The Cash Store Inc., Instaloans Inc., or any of their Canadian affiliates in Ontario. u) Third-Party Lender Claim means Ronald Payne and Timothy Yeoman v. Trimor Annuity Focus Limited Partnership, Trimor Annuity Focus Limited Partnership, Trimor Annuity Focus Limited Partnership #2, Trimor Annuity Focus Limited Partnership #3, Trimor Annuity Focus Limited Partnership #4, Trimor Annuity Focus Limited Partnership #5, Trimor Annuity Focus Limited Partnership #6, Alberta Ltd., Alberta Ltd., B.C. Ltd. (formerly c.o.b. as McCann Family Holding Corporation), L-Gen Management Inc., OMNI Ventures Ltd., Bridgeview Financial Corp., Inter-Pro Property Corporation (USA), and FSC Abel Financial Inc. (Court File No. 4172/14). SETTLEMENT BENEFITS AVAILABLE TO SETTLEMENT CLASS MEMBERS 3. A Settlement Class Member with an Approved Claim will be paid the Minimum Settlement Benefit, subject to such pro-ration as may be necessary if the Approved Claims received amount to more than the value of the Net Settlement Fund, or if an increase to the Minimum Settlement Benefit is warranted at the conclusion of the claims process. 4. Settlement Class Members may also be eligible under the rules of this Distribution Protocol for compensation above the Minimum Settlement Benefit provided that the Net Settlement Fund is not exhausted by payment of the Minimum Settlement Benefit. In order to establish eligibility by Settlement Class Members to additional benefits, all Approved Claims will be assigned a Claimant Input Value reflecting the value of the Loan Fees and Interest paid by the Settlement Class Member on Eligible Loans. It is anticipated that not all Eligible Loans to Settlement Class Members will have a Claimant Input Value that exceeds the Minimum Settlement Benefit.

4 5. The Claimant Input Values for Approved Claims will be totaled in the aggregate at the conclusion of the claims process. After the total aggregate value of the Minimum Settlement Benefits payable to Settlement Class Members is calculated and deducted from the aggregate Claimant Input Value of all Approved Claims, the balance of the approved Claimant Input Values will be pro-rated for payment to Settlement Class Members relative to the Net Settlement Funds available for distribution to claimants. 6. The following is a hypothetical illustration of how the pro-rata distribution will be implemented: At the conclusion of the claims process there are 45,000 accepted claims and the accepted Claimant Input Values total $9MM in the aggregate. There are Net Settlement Funds of $6MM. The $50.00 Minimum Settlement Benefit to all Settlement Class Members will therefore consume $2.25MM of the Net Settlement Fund and will leave $6.75MM in aggregate Claimant Input Values to be compensated under the rules of the Distribution Protocol. After payment of the Minimum Settlement Benefit to all class members, there will be $3.75MM remaining in the Net Settlement Fund. The $6.75MM in aggregate uncompensated Claimant Input Values will be prorated against the $3.75MM in the Net Settlement Fund. As a result, the settlement Distribution Protocol would be capable of paying approximately 55% of the approved Claimant Input Values to Settlement Class Members respectively above and beyond the Minimum Settlement Benefit.. 7. Subject to paragraphs 8 and 9 below and any further order of the Court, the rate of compensation payable to individual Settlement Class Members will be capped at their respective full Claimant Input Value if higher than the minimum and will be subject to the minimum payment under the Distribution Protocol. 8. In the event that undistributed funds remain after the distribution process or if subsequent recoveries are achieved in the litigation, any funds recovered shall first be applied to the Approved Claims of Settlement Class Members up to their respective full Claimant Input Value. Thereafter, Class Counsel and the Claims Administrator shall have discretion to pay Settlement Class Members a Pre-Judgment Interest Rate on the value of the Approved Claims. 9. In the event that undistributed funds remain after payment of full Claimant Input Values and a Pre-Judgement Interest Rate to Settlement Class Members, a supplementary notice and claims window may be offered, if Class Counsel and the Claims Administrator determine that it is feasible, necessary and appropriate, to facilitate payment of the settlement recoveries to additional Settlement Class Members. In the event that a supplementary claims window is not feasible or undistributed funds remain after a

5 supplementary claims window, Class Counsel shall design an alternative method of distributing any remaining funds and shall seek approval from the Court in respect of any such method. THE CLAIMS PROCESS 10. The claims process will be designed in order to establish a Claimant Input Value for every eligible Settlement Class Member who files an Approved Claim. 11. The claims process will rely upon the data provided to Class Counsel and the Claims Administrator by Cash Store and DCPI and/or any information that can be provided by the Settlement Class Member. All claims made by a Settlement Class Member shall be crossreferenced against the data provided by Cash Store and DCPI. Proof requirements shall be reasonably streamlined and flexible for the ease of the Settlement Class Members with a view to facilitating meritorious claims with reasonable protection against fraudulent or improper claims. Reasonable declarations may be accepted and estimations including the application of averages derived from the data provided by Cash Store and DCPI may be employed by the Claims Administrator in order to establish a reasonable Claimant Input Value for the Settlement Class Members in the absence of other information. It is recognized that there may be limitations in the data provided by Cash Store, DCPI and/or the Settlement Class Members. As a result, the Claims Administrator will apply a standard of reasonableness, not perfection, in its assessment and decision making in respect of a Settlement Class Member s Claimant Input Value. 12. Data submission requirements in the claims process for Settlement Class Members shall be established by the Claims Administrator on a simplified basis in order to give effect to the purposes of this Distribution Protocol. 13. Data submission requirements may include asking Settlement Class Members to provide their name, date of birth, current address and any address that was submitted to the Cash Store or Instaloans in the course of taking out an Eligible Loan, a customer or loan identification number (where possible) and as much supporting documentation as possible. Examples of supporting documentation include but are not limited to the following: a) The Cash Store loan agreement (sometimes referred to as a Promissory Note ); b) A loan statement or other document provided by The Cash Store or DirectCash, describing the particulars of the loan or any charges, etc.); c) An agreement with DirectCash (sometimes referred to as the DirectCash Wallet Agreement or DC Wallet Agreement); d) Pre-authorized debit agreements; e) Letters, s, or other documents received from The Cash Store or DirectCash, collection agency, or other party attempting to collect the loan;

6 f) DirectCash bank account statement; g) banking or other financial records evidencing the amount of the loan, and fees and charges associated with the loan; h) documents relating to devices received in association with the loan; and i) comparable verification that is acceptable to the Claims Administrator. DURATION OF THE CLAIMS PERIOD 14. The claims period will last for a duration of four months, subject to the potential to extend or supplement the duration of the claims window, as provided for in paragraph 9 herein. 15. In the event that Class Counsel and the Claims Administrator determine that there should be an extension to the claims period, or that a supplementary claims window should be undertaken, they shall implement the reasonable extension or supplementary claims window as they consider necessary and appropriate. THE CLAIMS ADMINISTRATOR S DUTIES AND RESPONSIBILITIES 16. The Claims Administrator shall administer the Settlement Agreements and this Distribution Protocol under the ongoing authority and supervision of the Court. 17. The settlement amounts shall be held in an interest bearing trust account at a Canadian Schedule 1 bank in Canada and all payments from the settlement amounts shall be made from that account. 18. The Claims Administrator s duties and responsibilities shall include the following: a) providing notices to the Settlement Class Members as required pursuant to this Distribution Protocol; b) receiving, organizing and cleansing the Defendants data where possible, including names, addresses and loan information for incorporation into the claims administration process; c) developing, implementing and operating electronic web-based systems and procedures for receiving and adjudicating Claims. The Claims Administrator shall encourage Settlement Class Members to claim via the online claim portal where possible and shall facilitate this process; d) developing and implementing processes to detect possible fraudulent conduct, including monitoring claims for unusual activity and multiple claims being filed from the same address, and using the same loan identification information; e) making timely decisions in respect of Claims and notifying the Settlement Class Members of the decision promptly thereafter; f) arranging payment to Settlement Class Members in a timely fashion after the Claims Filing Deadline;

7 g) dedicating sufficient personnel to respond to Settlement Class Members inquiries in English or French, as the Settlement Class Member elects; h) arranging payments of administration-related expenses; i) maintaining, in an easy to understand format, the clams administration information and information regarding the proposed distribution, so as to permit Class Counsel to audit the administration at the discretion of Class Counsel or if ordered by the Court; j) reporting to Class Counsel respecting Claims received and administered, and administration-related expenses; k) cash management and audit control; l) preparing and submitting such financial statements, reports and records as directed by Class Counsel and/or the Court; and m) fulfilling any tax reporting and arranging payments required arising from the settlement amounts, including any obligation to report taxable income and make tax payments. All taxes (including interest and penalties) due with respect to the income earned by the settlement amounts shall be paid from the settlement amounts. CLAIMS ADMINISTRATOR S DECISION 19. In respect of each Settlement Class Member who has filed a claim in accordance with this Distribution Protocol, the Claims Administrator shall: a) establish processes for the determination of eligibility and to decide whether the Settlement Class Member is eligible to receive settlement benefits payable out of the Net Settlement Fund in accordance with the Settlement Agreements, orders of the Court and this Distribution Protocol; b) verify that the Settlement Class Member has taken out an Eligible Loan or Loans during the class period for which some share of the Eligible Loan or the Loans Fees and Interest were repaid; c) make a determination of the Claimant Input Value for each Settlement Class Member; and d) make a determination of the appropriate pro-rata share for each Settlement Class Member in addition to the Minimum Settlement Benefit. 20. The Claims Administrator shall send to the Settlement Class Member, by or regular mail, a decision as to the approval or rejection of the claim. Where the Claims Administrator has rejected all or part of the claim of the Settlement Class Member, the Claims Administrator shall include its grounds for rejecting all or part of the claim. DEFICIENCIES

8 21. If, during claims processing, the Claims Administrator finds that deficiencies exist in a claim or other required information, the Claims Administrator shall notify the Settlement Class Member, by or regular mail, of the deficiencies. The Claims Administrator shall allow the Settlement Class Member thirty (30) days from the date of such notice to correct the deficiencies. If the deficiencies are not corrected within the thirty (30) day period, the Claims Administrator shall reject the claim without prejudice to the right of the Settlement Class Member to cure the deficiencies, provided the Settlement Class Member is able to meet the Claims Filing Deadline and other requirements set forth herein. The online claims portal shall be designed so as to minimize the possibility of deficient claims. 22. A deficiency shall not include missing the Claims Filing Deadline. Subject to further order of the Court, the Claims Administrator shall not accept claims postmarked or electronically submitted after the Claims Filing Deadline. REVIEW OF CLAIMS DECISIONS 23. If a Settlement Class Member believes that a rejection of a claim in whole or in part is incorrect, they may request a review of the determination within 15 days of receipt of their decision letter by sending a statement in writing asking for a Claims Review, and setting forth the reason(s) that they believe the result is incorrect. The review will be undertaken by the Claims Administrator or other such referee as may be appointed by Class Counsel. The Claims Review decision shall be final and binding upon the Settlement Class Member. 24. The Claims Administrator may forward the requests for a Claims Review to the Court where there is a concern regarding possibly fraudulent claims. DISCRETION AND AUDIT 25. The Claims Administrator and Class Counsel shall have discretion in the interpretation of this Distribution Protocol and in the management of the claims administration to give effect to this Distribution Protocol in the interest of Settlement Class Members, having regard to principles of procedural and substantive reasonableness, and respecting the need for efficiency in the delivery of benefits to eligible Settlement Class Members. 26. If the discretion granted by this Distribution Protocol is insufficient to manage or resolve any issue that may arise in the course of this administration, the Claims Administrator and Class Counsel may seek directions from the Court at any time in order to address or resolve any matter requiring such direction. 27. At its discretion, the Claims Administrator may elect to audit any claim and may reject any claim in whole or in part where, in the view of the Claims Administrator, the claimant has submitted insufficient, false, or inaccurate information in support of a claim, or has otherwise engaged in dishonest or fraudulent conduct. PAYMENT OF SETTLEMENT AWARDS TO SETTLEMENT CLASS MEMBERS 28. As soon as practicable after the claims evaluations, the Claims Administrator shall make arrangements to pay Approved Claims as expeditiously as possible.

9 29. Class Counsel and the Claims Administrator will endeavor to utilize methods of delivering payment of the Net Settlements Funds to Settlement Class Members in a secure, accessible, efficient and cost-effective manner. Prior to the commencement of the claims process under this Distribution Protocol, Class Counsel and the Claims Administrator shall establish the method of payment for delivery of settlement benefits to Settlement Class Members. COMMUNICATION WITH SETTLEMENT CLASS MEMBERS 30. Notice programs will be formulated to provide effective notice to Settlement Class Members of their rights to make claims. The claims administration shall be managed in order to maintain current Settlement Class Member contact information, until the completion of the claims process. Maintenance of current and updated Settlement Class Member information will include any process required to manage the recovery and distribution of any subsequent litigation proceeds. Emphasis shall be made by the administration to prompt Settlement Class Members to provide notice of changes in contact particulars such as or residential addresses. CONFIDENTIALITY 31. All information received from the Defendants or the Settlement Class Members is collected, used, and retained by the Claims Administrator pursuant to the Personal Information Protection and Electronic Documents Act, SC 2000 c 5 for the purposes of administering the Settlement Agreements, including evaluating the Settlement Class Member s eligibility status under the Settlement Agreements. The Claims Administrator will administer the Distribution Protocol in a manner that is cognizant of the possibly sensitive nature of the circumstances in which Settlement Class Members may have taken their loans. The information provided by the Settlement Class Member is strictly private and confidential and will not be disclosed without the express written consent of the Settlement Class Member, except in accordance with the Settlement Agreements, orders of the Court and/or this Distribution Protocol. 32. Under no circumstances will any data received or assembled for or in connection with any Settlement Class Member in connection with this Distribution Protocol, be made available directly or indirectly to any person who might attempt to use the data to enforce collection or any debt or liability against a Settlement Class Member. AMENDMENT 33. The terms of this Distribution Protocol may be amended on a motion by Class Counsel with approval of the Court.