Cy Pres Awards and Class Action Settlements
Cy pres is the equitable doctrine under which a court interprets a document containing a gift to charity by substituting another charity to reflect as closely as possible the donor’s intention. Courts use cy pres when a donor’s original charitable purpose cannot be exactly fulfilled. When literal compliance is impossible, the general intention of the donor should still be carried out as nearly as possible (cy pres) so that the charitable bequest does not fail.
In our area of expertise, estate and trust litigation, cy pres applications are quite common to determine the proper beneficiary(s) of a subject testamentary bequest. Megan Connolly has blogged on the application of the cy pres doctrine to charitable bequests in Wills. Cy pres has been applied in other areas of the law.
In the context of class action proceedings, settlements increasingly include cy pres orders (as they are often called) where part of the settlement funds are paid to charitable and non-profit organizations, to be applied to activities that may reasonably be expected to benefit class members. In a recent decision approving the settlement of a class action against a financial institution involving alleged unauthorized charges for foreign currency transactions, Justice Cullity reviewed cy pres orders in class action settlements and ultimately made an order for the Law Foundation of Ontario to receive $14.2 million to create a trust fund “for the purpose of advancing public access to justice in Canada”. Justice Cullity noted that access to justice had been used as a ground for certifying the proceeding. Class members and other members of the public would benefit from enhanced access to justice in the future.
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Bianca La Neve
Bianca La Neve - Click here for more information on Bianca La Neve.
