In Christopher v. Royal Bank of Canada, 2025 ONSC 5263, the Ontario Superior Court of Justice approved a proposed settlement in a class action alleging that RBC charged duplicative non-sufficient funds (NSF) fees on pre-authorized debit (PAD) transactions without proper disclosure. The settlement was made pursuant to section 27.1 of the Class Proceedings Act, 1992, with consent from RBC and involved approximately 172,000 class members across Canada.
Background
The plaintiff, Brittany Christopher, filed the claim alleging breach of contract and unjust enrichment based on RBC charging NSF fees multiple times for the same PAD transaction during the period August 30, 2020 to August 1, 2022. RBC’s standard contracts did not disclose that re-presentments of PADs could trigger additional NSF fees until a contractual amendment in 2022.
The class was certified by Justice Akbarali in 2023 with agreement from both parties, and the class members are defined as individuals who were charged NSF fees on re-presented PAD transactions in the specified timeframe.
Settlement Terms
After extensive arm’s-length negotiations facilitated by the Honourable Todd Archibald, the parties agreed to a $7,050,000 all-inclusive settlement fund. After deductions for fees, disbursements, taxes, and a funder’s court-approved levy, each eligible class member will receive an estimated payout of approximately $25.
Notably, the settlement avoids a traditional claims process by distributing funds through direct deposit using an RBC-generated list of eligible class members. This method maximizes participation and minimizes administrative costs.
Court’s Analysis of Fairness
Justice Leiper highlighted several factors supporting approval:
- The likelihood of success was uncertain and litigating aggregate damages would be costly and complex.
- The settlement terms reflected thorough, good-faith negotiations informed by expert financial analysis and comparable settlements.
- Approximately 93% of class members are expected to benefit, with no objections received from the class.
- The direct notice and simplified distribution honors procedural fairness and efficiency.
Class Counsel Fees and Representative Plaintiff Honorarium
Class counsel sought approval of fees totalling 27.5% of the gross settlement, plus disbursements and funder’s fees, which the court found fair given the risks undertaken and results achieved.
A $5,000 honorarium was approved for Ms. Christopher in recognition of her active participation, significant personal contribution, and the challenges she faced in representing the class while on long-term disability leave. This honorarium aligns with recent jurisprudence that emphasizes the recognition of exceptional effort by representative plaintiffs.
Practical Implications
This case demonstrates the importance of carefully negotiated settlements that provide broad class benefit without burdensome claims processes. It also reflects judicial balancing of risk, efficiency, and access to justice in the approval of class action settlements.
For plaintiffs and lawyers involved in consumer and financial services class actions, the decision provides valuable insights into certification, settlement dynamics, and fee approvals under Ontario’s Class Proceedings Act.
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