Lawsuit's spoils set to benefit law schools
Thursday, March 26, 2009
- Organization: Globe & Mail
Payout by TD also targets charities
An unusual $14-million payout by Toronto-Dominion Bank - part of the settlement from class-action lawsuit - is about to touch off a feeding frenzy among its cash-starved recipients: the country's 16 law schools.
Coming at a time when university endowments have taken a major hit from the economic recession, competition among the law schools is expected to be keen. "Everyone is already talking about it," an administrator at one Ontario law school said yesterday. "There is serious buzz."
The lion's share of the spoils will go to those that propose the best projects involving legal ethics and professionalism, said Harvey Strosberg, one of the lawyers representing about four million TD Visa cardholders who were levied an improper surcharge on the conversion of foreign funds.
"It's a matter of the ingenuity of the law schools," Mr. Strosberg said. "Obviously, consumer protection law, banking law, things that deal with foreign exchange and credit cards - those jump out at you."
Mr. Strosberg said a committee of lawyers, judges and academics will be created to oversee the distribution of the money, provided a judge approves of the plan at a hearing scheduled for late April.
Spokesmen for some law schools expressed delight yesterday. "This will be a huge shot in the arm to an area of legal education that doesn't often get in the limelight," said Lorne Sossin, associate dean of the University of Toronto law school.
Prof. Sossin said the notion of using settlements from cases where consumers were badly treated to enhance legal professionalism creates "a really virtuous circle."
Besides the amount earmarked for law schools, an additional $14-million of the $55-million settlement will go to charitable organizations capable of promoting financial literacy among youth, disadvantaged and minority groups.
Lawyers who acted for the plaintiffs will receive $11-million, while the Law Foundation of Ontario will get $4.3-million.
Only $11-million of the total can actually be distributed to individual cardholders, since most of them cannot be identified through bank records, said Paul Pape, another lawyer for the plaintiffs.
Mr. Pape said he is keen to see young lawyers better educated on ethical issues before they arrive on the doorstep of big firms, where they tend to be left to sink or swim because partners are so fixated on making money.
"Law schools could be doing a better job of preparing graduates to be lawyers," he said. "The idea here is to take some of this money and encourage law schools to do a better job of preparing students for the modern realities of practising law."
Two other banks - Bank of Nova Scotia and Canadian Imperial Bank of Commerce - settled similar lawsuits within the past year. Mr. Strosberg said much of the settlements in those cases went to cancer research.
All three lawsuits were launched almost a decade ago, when two Ontario doctors who had visited New York noticed unexplained surcharges on their Visa bill statements.