Tag: class-action lawsuit

4 PILLARS CLASS ACTION LAWSUIT SETTLEMENT: OUR DEFINITIVE GUIDE TO THE PEARCE V 4 PILLARS LAWSUIT SETTLEMENT

Post author By Brandon Smith
Post date March 7, 2022

We hope that you and your family are safe, healthy, and secure during this COVID-19 pandemic. Ira Smith Trustee & Receiver Inc. is absolutely operational and Ira, in addition to Brandon Smith, is readily available for a telephone consultation or video meeting.

4 Pillars class action lawsuit: What is a class action proceeding?

Class action lawsuits are familiar to many people. Group legal actions occur when a group of people who have been injured in the same way as defined by law seeks legal action on their behalf. A class action lawsuit involves plaintiffs (persons who have been injured) and defendants (people who are being sued) who are all brought together by the courts, who determine whether a settlement should be reached between them. A class action lawsuit claims to be owed money.

The British Columbia court certified a class-action lawsuit in Pearce v 4 Pillars Consulting Group Inc. (the “4 Pillars class action lawsuit”) on October 29, 2019. In my November 25, 2019, 4 PIllars class action lawsuit Brandon’s Blog titled, HOW DOES DEBT RELIEF WORK: APPARENTLY NOT GREAT 4 EVERYONE, I discussed the issues raised in this class-action lawsuit.

The British Columbia appellate court allowed the 4 Pillars class action lawsuit to proceed as a class action proceeding, dismissing the 4 Pillars’ objections. In my May 24, 2021, 4 PILLARS LAWSUIT GETS GIGANTIC APPROVAL TO PROCEED FROM COURT OF APPEAL FOR BRITISH COLUMBIA Brandon’s Blog I wrote about that decision.

In this 4 Pillars class action lawsuit, the British Columbia Court approved a settlement plan on January 13, 2022. According to the court, the Settlement Administration Plan has been approved and shall be implemented and enforced. In this Brandon’s Blog, I give a brief overview of the 4 Pillars class action lawsuit and describe the Settlement Administration Plan.

4 Pillars class action lawsuit: The 4 Pillars lawsuit class-action

The 4 Pillars class action lawsuit was filed in the British Columbia Supreme Court against 4 Pillars Consulting Group Inc. It is alleged that 4 Pillars’ debt consulting business has violated the provincial Business Practices and Consumer Protection Act (BPCPA) and the federal Bankruptcy and Insolvency Act (Canada) (BIA).

Mr. Paul Pearce attempted to certify his action as a class action. This lawsuit seeks to recoup damages for the debt consulting fees that 4 Pillars charged its clients. The fees were paid in connection with: (i) a consumer proposal under the BIA; or (ii) an informal debt settlement proposal with the person’s creditors, all after April 1, 2016.4 Pillars class action lawsuit: B.C. Court of Appeal Finds Class Action Waiver Clause Unconscionable and Contrary to Public Policy

4 Pillars Consulting Group Inc. appealed the lower court’s 4 Pillars class action lawsuit decision to the Court of Appeal. Its decision was released on May 17, 2021. In agreement with the lower court, the court ruled that a genuine issue must be determined at trial based on all the evidence. So the 4 Pillars’ request to strike the plaintiffs’ BPCPA claims was denied by the judge. The certification stage approved by the lower court was upheld on appeal.

According to 4 Pillars, the class action waiver clauses in its standard form contract signed by its clients and the contracting process they agreed to, barred them from participating in any class proceedings including a class dispute resolution process or class arbitrations. This court ruled that such a class action waiver clause contractual term violated public policy considerations and the substantive rights that the class claimants should have.

There was a substantial conflict between the class action waiver and the administration of justice, as found by the court. That contractual term would successfully bar class actions. It was held to be an unfair contract and that there was unequal bargaining power.

Essentially, class action waiver clauses denied Mr. Pearce, and the class members, access to justice and a legal dispute resolution procedure for claims arising from the connection between them. Accordingly, class certification was upheld and the enforceability of class action waiver clauses was held to be in violation of the class members’ rights and on public policy grounds.

As a result of the Court of Appeal for British Columbia’s decision, access to justice will be given and a trial will be necessary to determine all the legal issues including whether claims can arise from BIA-related offenses. Therefore, 4 Pillars also did not succeed in having this issue struck from the 4 Pillars lawsuit. The claimants wanted to proceed to get their measure of justice.

4 Pillars class action lawsuit: What the Court of Appeal for British Columbia says about the role of 4 Pillars

Both courts found that the 4 Pillars debt restructuring services were:

meeting debt-stricken consumers who are either insolvent or on the verge of insolvency and working with them as advisors to individuals;
assisting those on the brink of insolvency in drafting a consumer proposal for a LIT;
engaging in back and forth discussions with the LIT in an effort to get the LIT to agree to a consumer proposal that is favorable to the debtor;
input, on behalf of the debtor, on any response or request from creditors;
debtors are charged upfront regardless of whether 4 Pillars actually achieve debt relief for the debtor; and
charge higher fees than licensed and regulated professionals.

Debt restructuring businesses (those not licensed by the Superintendent of Bankruptcy) charge this way in general. It is unclear what value they provide if any. Their business model preys on people’s fears of getting advice directly from Licensed Insolvency Trustees.

Services described above are provided by a Trustee at no additional charge over and above the tariff fee set by the government. During our no-cost initial consultation, I provide financial advice regarding unmanageable debt and if you are a candidate for informal debt settlement, I will let you know exactly what to do. In cases where you have too much personal debt and are not eligible for an informal settlement, I have prepared many consumer proposals that have worked. I also serve as a credit counsellor as part of that process.

4 pillars class action lawsuit

B.C. Supreme Court decision leads to 4 Pillars class action lawsuit settlement

As a result of the class action in British Columbia, I wondered if 4 Pillars would have trouble in Ontario and elsewhere because the appellate court denied the appeal and sent the 4 Pillars lawsuit to trial. It is obvious that 4 Pillars do not want these legal questions answered by a court trial. I also stated that there is a strong possibility that this 4 Pillars class action lawsuit may ultimately strike directly at the heart of the business model of 4 Pillars. Canadian franchisees need to be concerned.

4 Pillars must have been troubled by this too, in addition to losing the litigation and a verdict based on BIA-related offences and running afoul of the legislative intent of the BIA. The 4 Pillars class action lawsuit settlement was negotiated because the company could not afford to lose at trial and they obviously found this to be the most acceptable alternative to litigation. On January 13, 2022, the court approved the Settlement Administration Plan. There is now commercial certainty in BC as a result of this settlement.

It is feasible that a portion of the costs claimants paid to 4 Pillars locations in British Columbia might be refunded as a result of the negotiated settlement. The class action alleges that 4 Pillars franchise businesses breached the BPCPA by providing debt restructuring solutions. The 4 Pillars class action lawsuit sought restitution for monies 4 Pillars supposedly received unjustifiably. Accusations made versus the Defendants are unproven, as well they are rejected by 4 Pillars.

The 4 Pillars class action lawsuit was certified that all persons who paid 4 Pillars fees for a consumer proposal under the BIA or an informal debt repayment proposal with their creditors in BC between April 16, 2016, and August 15, 2021 (the “Class”) are entitled to join. Paul Pearce was appointed as the plaintiff’s representative by the court.

Three settlement agreements were approved by the Honourable Justice Mayer of the British Columbia Supreme Court on January 29, 2021, and November 15, 2021. As a compromise of disputed claims, these settlements are not an admission or finding of liability by the settling Defendants. The approved settlements shows that the goals of class proceedings are being met.

4 Pillars class action lawsuit settlement: What are the terms of the settlement?

Class members who submit claims are eligible to receive a refund of up to 100% of the eligible fees they paid. Collectively, the Defendants have set up a $7,000,000 Settlement Fund to pay the claims. In addition, a claim that will be assigned to the Class against one of Defendant’s insurers could result in a recovery of up to $800,000.

A person’s refund will be figured out by the total quantity of claims made against this Settlement Fund after paying the approved legal expenses. The quantity of the Settlement Fund readily available to pay claims will be pro-rated if the full amount of claims is less than the Settlement Fund available to pay claims.

The Court has approved legal fees on a contingency fee basis equal to 1/3 of the Settlement Fund (plus taxes) and $103,533.31 in disbursements (including taxes and interest). The Settlement Agreements and Settlement Administration Plan contain all the terms and conditions of this court-approved settlement.

4 Pillars class action lawsuit settlement: How do I make a claim?

To receive compensation under the settlement, each Class member must complete the online Claim Form by April 28, 2022. The potential claim will be vetted and if it meets the qualifications approved by the court, the claim will be admitted as an approved claim. There is more than one class of individuals able to claim on the Settlement Fund.

4 Pillars class action lawsuit settlement: What if I don’t want to participate?

In order to opt out of the lawsuit, people not wanting to submit their individual claims must notify class counsel in writing to the Canadian lawyer acting on behalf of the class by not later than April 28, 2022, providing your name and address and indicating that you wish to opt out. Should you opt out of the settlement, you will not receive compensation.

4 Pillars class action lawsuit settlement: Settlement Claims Deadline

To receive compensation under this settlement of the representative action, people must submit their individual claims by submitting a Claim Form by April 28, 2022.

4 Pillars class action lawsuit settlement: Trouble ahead for 4 Pillars in Ontario and elsewhere because of the class action in British Columbia?

I’m looking forward to seeing if this 4 Pillars class action lawsuit settlement is pursued in the Superior Courts of other provinces for the administration of justice where other 4 Pillars franchisees operate. I hope you found this 4 Pillars class action lawsuit Brandon Blog informative.

Are you worried because you or your business are dealing with substantial debt challenges and you assume bankruptcy is your only option? Call me. It is not your fault that you remain in this way. You have actually been only shown the old ways to try to deal with financial issues. These old ways do not work anymore.

The Ira Smith Team utilizes new modern-day ways to get you out of your debt difficulties while avoiding bankruptcy. We can get you the relief you need and so deserve.

The tension put upon you is big. We know your discomfort factors. We will check out your entire situation and design a new approach that is as unique as you and your problems; financial and emotional. We will take the weight off of your shoulders and blow away the dark cloud hanging over you. We will design a debt settlement strategy for you. We know that we can help you now.

We understand that people and businesses facing financial issues need a realistic lifeline. There is no “one solution fits all” method with the Ira Smith Team. Not everyone has to file bankruptcy in Canada. The majority of our clients never do. We help many people and companies stay clear of bankruptcy.

That is why we can establish a new restructuring procedure for paying down debt that will be built just for you. It will be as one-of-a-kind as the economic issues and discomfort you are encountering. If any one of these seems familiar to you and you are serious about getting the solution you need, contact the Ira Smith Trustee & Receiver Inc. group today.

Call us now for a no-cost consultation.

We will get you or your business back up driving to healthy and balanced trouble-free operations and get rid of the discomfort factors in your life, Starting Over, Starting Now.

Brandon Blog Post

CANADIAN TRANSPORTATION AGENCY APPROVES CEASE OPERATIONS TO CASH REFUNDS

Post author By Brandon Smith
Post date April 6, 2020

If you would prefer to listen to the audio version of this Brandon’s Blog, please scroll to the bottom of this page and click on the podcast.

Introduction

As a result of the unprecedented situation caused by the COVID-19 pandemic, global airlines have either suspended operations entirely or are flying a shadow of their former schedule. Travellers are clamouring to get their money back. People who cannot work due to the coronavirus pandemic, need their money back to buy groceries or make their next rent or mortgage payment. While the Canadian government is working at warp speed to try to make things financially better for Canadians in the face of this virus crisis, it has also given the Canadian Transportation Agency the approval to give the airlines the clear for takeoff to ground your cash refund.

In this Brandon’s Blog, I describe how the government has given the airlines the green light to red light your refund and provide some useful suggestions.

The contract of carriage

Practically every country shut its borders to outsiders. On March 13, 2020, the Government of Canada provided a blanket travel advisory against all non-essential travel outside of Canada. Airlines, in action to the travel limitation, have cancelled trips. The friendly skies are a lot quieter these days.

When you purchase a flight you become a party to the airline’s contract of carriage. It is full of the usual legalese that you don’t read and just click accept as fast as you can. You do this because you really want to buy the ticket and you are afraid of losing that special reduced fare. It is a contract that sets out obligations between the airline and you and what happens in various events such as delay, cancellation by the airline and cancellation by the passenger.

The initial response of the airlines to COVID-19

Early on, the COVID 19 virus was just something that happened in China. It wasn’t something close to home. As the COVID-19 situation unfolded, the airlines implemented a number of policy changes to try to instill consumer confidence in members of the public who were thinking of voluntarily choosing not to fly. Most waived change penalties and allowed customers to seek credit for a future flight.

Most airlines became generous and allowed credit for even the most restrictive tickets, ones that normally become worthless when the passenger cancels. But what if the passengers didn’t proactively cancel and are left holding tickets for flights that aren’t operating because of the airlines, for one reason or another, cancelled on the passenger? Canadians are wondering now what happens to their money, at a time where they are already worried about an uncertain economic landscape.

Then the Canadian Transportation Agency changed everything

It is generally accepted under most contracts of carriage that when an airline cancels your flight they need to rebook you or provide a refund back to the original payment. COVID-19 has put all airlines in a liquidity crisis and they, like everyone else, need to conserve their cash. So, they do not want to give refund payment for all the cancelled flights. Especially with little to no revenue coming in right now.

Then the Canadian Transportation Agency came out with some important announcements. They were framed as public service announcements in keeping their staff and the general public safe from the coronavirus.

In reality, it is to help Canada’s airline industry. I am not saying that protecting Canada’s airlines is unnecessary or wrong, it isn’t. It just works against Canadians who need to be counting every penny. The announcements are:

Exempting the airlines from having to pay additional compensation to anyone whose flight was either delayed or cancelled.
Paused the dispute resolution mechanism between airlines and passengers until June 30, 2020. While passengers can continue to submit complaints, nothing is going to be done with them. The June 30 date is also subject to extension, depending on circumstances at that time.
Canadian regulations concerning the conduct of our airlines were created in anticipation of relatively localized and temporary flight interruptions. None contemplated the kind of global mass flight terminations that have taken place over recent weeks as a result of the pandemic. It is necessary to consider just how to strike a reasonable and also sensible balance between airlines and their passengers in these remarkable and also unprecedented situations. They went on to say that in general, a suitable method in the existing context could be for airlines to provide affected travellers with coupons or credits for future travel, as long as the vouchers or credits do not expire in an unreasonably short period of time (24 months would certainly be considered practical most of the times).

So there you have it. In one fell swoop, the Canadian government, through the Canadian Transportation Agency, sanctioned the airlines to not have to pay compensation or give people back their cash when the airline cancelled flights because of the travel bans.

What the airlines are doing

The airlines’ stance is that they are offering affected passengers a credit equal to the value paid, for use on future travel, for up to 24 months. I was one of the affected travellers. In response to an email, I received advising my flights were cancelled, my airline was insistent that I had to state, either in writing or on a recording, that I was cancelling my flight before I could receive the credit.

Hold on – I am not cancelling; the airline already cancelled my flight and my contract entitles me to a refund. The airlines are referring to the statement issued by the Canadian Transportation Agency which, after suspending hearing passenger disputes, seeks fairness amongst parties because they see the COVID-19 pandemic as a force majeure. Something outside of anyone’s control. Their guidance seeks to balance things by directing airlines to provide credit, not a refund.

So what can affected passengers do?

Customers who bought their tickets from the airline and paid by credit card may wish to attempt to initiate a chargeback. Credit card issuers are pushing back and a 3-way fight will ensue as they act as a mediator between passengers and airlines. I believe in most cases the offer of credit will be viewed as a reasonable compromise by the card issuers, in light of the Canadian Transportation Agency CTA guidance. Otherwise, they will have to either take the credit or see if they can book the same trip far enough out to guess when the “all clear” will be sounded and when they think they could get time off work to travel again.

Now, some people may think that since they bought insurance for their trip, they can claim against the policy. Wrong! If you have trip interruption insurance, that only covers you if you have already gone on at least the first leg of your journey, and are away from home. It covers your additional expenses if you need to return home sooner or later than planned and compensates you for non-refundable portions of unused, pre-paid travel arrangements.

Similarly, trip cancellation coverage also won’t help you. That coverage is in case you need to cancel your trip at the pre-departure stage. It can repay 100% of your trip price if you require to cancel your trip for a reason that is covered by the insurance.

What is so bad about credit for future travel?

So what’s so bad about a credit? When everything returns to normal, whenever that may happen, people will want to travel again and will have credit. Unfortunately, that doesn’t help anyone who really needs the money now that they paid for a vacation they can’t take anyway.

Worse, a credit, as opposed to a future confirmed reservation, is not payment for a defined service. Rather, it is your prepaid deposit and the airline’s ordinary unsecured debt to you. What if the airlines need to seek bankruptcy protection as a result of the financial stress being placed on them? What if like Air Canada bankruptcy protection, which it has already done twice before, they need to restructure under the Companies’ Creditors Arrangement Act (Canada) (CCAA). That unsecured debt could easily be compromised to the point where it either partially or totally vanishes. At least a future reservation cannot be eliminated (we hope!).

On March 27, 2020, a class-action lawsuit was filed in the Federal Court in Vancouver, B.C. It is on behalf of all Canadians who paid for flights not taken, cancelled and not refunded. The class is seeking a refund of the payment in its original form. So, if you paid by credit card, you get the cash put back on your card. If you paid in cash, you get back the cash. It will be interesting to see how that litigation eventually shakes out.

Summary

The Ira Smith Team family hopes you and your family members are remaining safe, healthy and balanced. Our hearts go out to every person who has been negatively affected either by mere inconvenience or misfortune. We salute Canada’s front line health care, police, fire emergency and safety workers.

All Canadians need to do their part to stop the spread of this infection. Social distancing and self-quarantining are sacrifices that are not optional. Unfortunately, families are separated from each other.

Ira Smith Trustee & Receiver Inc. has always employed clean and safe techniques in our professional practice. We continue to do so. We are not allowing any visitors to our office. If anyone needs our assistance, Ira or Brandon are available to help you. Telephone consultations and/or virtual meetings are available for anyone wanting to discuss their personal or corporate situation.

Are you now worried about how you are going to survive? Are you worried about how long your company will be able to pay employees who are not working and meet all of its other obligations? Those worries are normal. The executives at Canada’s airlines are also worried about the survival of their respective companies. Airlines may have to file for bankruptcy protection in order to do restructuring and turnaround.

The Ira Smith Team understands these fears. More notably, we know the requirements of the business owner or the person who has too much individual debt. Because you are dealing with these stressful financial issues, you are anxious.

It is not your fault you can’t fix this problem on your own. The pandemic has thrown everyone a curveball. We have not been trained to deal with this. You have only been taught the old ways. The old ways do not work anymore. The Ira Smith Team makes use of new contemporary ways to get you out of your debt problems while avoiding bankruptcy. We can get you debt relief now.

We look at your whole circumstance and design a strategy that is as distinct as you are. We take the load off of your shoulders as part of the debt settlement strategy we will draft just for you.

We understand that people facing money problems require a lifeline. That is why we can establish a restructuring procedure for you and end the discomfort you feel.

Call us now for a no-cost consultation. We will listen to the unique issues facing you and provide you with practical and actionable ideas you can implement right away to end the pain points in your life, Starting Over, Starting Now.

Tags Air Canada bankruptcy, canadian transportation agency, canadian transportation agency cta, cash refund, CCAA, class-action lawsuit, Companies’ Creditors Arrangement Act, contract of carriage, coronavirus, covid-19, credit card, flight cancellation, Ira Smith Trustee, liquidty crisis, OTC-CTA Canada, pandemic