Imperial Tobacco: Epiq's budget approved, its conduct request denied

The order Epiq Class Action Services Canada Inc. proposed for itself had a paragraph 4. It would have had the Ontario court order that "the activities and conduct of Epiq (for certainty, including in each of its capacities as PCC Agent and Claims Administrator), as set out in the Second O'Connor Affidavit, are hereby ratified and approved," with only Epiq entitled to rely on the approval, and only "with respect to its own personal liability." The proposed Quebec order carried the same approval as its paragraph 8, per the Motion Record of Epiq, Sept. 1, 2026, Tab 3, para. 4; Tab 4, para. 8. The order Justice Jessica Kimmel signed has seven paragraphs, none of them that one; paragraph 3 approves the budget attached as Exhibit "D" to Michael O'Connor's affidavit for Epiq, per the Order (Budget Approval), Sept. 9, 2026, paras. 1–7.

That order is dated September 9, 2026, the day of the joint hearing before the Ontario court and the Superior Court of Québec; Justice Kimmel's digital signature on it is dated September 29, per the Order (Budget Approval), Sept. 9, 2026, p. 3. The joint reasons of Justice Kimmel and Justice Catherine Piché carry no date of their own; their heading gives only the hearing's. They record that the courts decided at the hearing to approve the budget and reserved on the rest, and that the Attorney General of Quebec, having said it would seek an adjournment, did not. They close: "We have today signed the orders requested by Epiq dated September 9, 2026 in all three Ontario CCAA proceedings and in the Québec Proceeding, with proposed paragraph 4 (in Ontario) and 8 (in Québec) dealing with the approval of its conduct and activities removed," per the Endorsement of Justices Kimmel and Piché, Sept. 29, 2026, paras. 2–4, 40. The arguments on the motion were reported here on September 9, and Justice Kimmel's reasons removing the 10% cost variance limit on September 11.

What three months cost

The budget runs from September 1 to November 30, 2026 and totals $19,958,210. By program, it allots $8,303,694 to Epiq's work as PCC agent, assisting claimants under the pan-Canadian plan in preparing and submitting claims; $8,141,549 to administering Quebec claims; $3,494,057 to administering pan-Canadian claims; and $13,689 and $5,222 to the two notice plans. On the consolidated sheet, one line, for project specialists and project attorneys, carries $6,532,035, and sales tax comes to $2,419,854, per the O'Connor Affidavit, Sept. 1, 2026, para. 7, Ex. "D", pp. 1–6.

Mr. O'Connor attributes part of the cost to demand. Pan-Canadian claimants "have required a higher level of assistance from the PCC Agent than was originally anticipated," he says, and call centre and email volumes have run higher than expected, partly because of "the success of the notice program, particularly the television commercials," of which more than 4,700 had aired, per the O'Connor Affidavit, Sept. 1, 2026, paras. 24, 31. As of August 16, Epiq had received 8,433 claims under the pan-Canadian plan and 73,427 under the Quebec plan, 46,320 of the Quebec claims in the week of August 10 to 16. It had reviewed and determined 17,362 and approved 9,766; 6,990 were incomplete and 606 rejected, per the O'Connor Affidavit, Sept. 1, 2026, para. 45, n. 2.

The budget does not price the claims that arrived at the end, the late surge reported here on September 9. The joint reasons record Epiq's explanation that its estimates "do not reflect or consider the over 100,000 new claims" filed just before the deadline, per the Joint Endorsement, Sept. 29, 2026, para. 9.

In the judges' words, the budget should be assessed "in light of the actual experiences to date with the administration of the Compensation Plans and the expected volume of work ahead to bring the program across the finish line and to finally pay compensation to the eligible claimants." The monitors and plan administrators, and the Quebec class action plaintiffs and their counsel, had had a full year of Epiq's periodic reporting and accounts, and supported it. Quebec class counsel, who pay their own agent, Proactio, to help claimants complete their claims, were "in a particularly unique position" to judge it, and had pointed to complexities "which may explain why the costs reflected in the First Quarterly Budget are higher than those contemplated by the Framework for Year 2," per the Joint Endorsement, Sept. 29, 2026, paras. 12–13.

The class plaintiffs' aide memoire names among them more than 80,000 claims filed in the Quebec program by the deadline, against a total class it says Justice Riordan's judgment projected at approximately 100,000, and more than 19,000 claimants still waiting for Santé Québec to provide the medical records their claims require, per the Aide Memoire of the Quebec Class Action Plaintiffs, Sept. 8, 2026, para. 16. "Having considered all the written and oral submissions presented in support of the approval of the First Quarterly Budget, the Courts find it to be reasonable and appropriate in the circumstances and it is approved," per the Joint Endorsement, Sept. 29, 2026, para. 14.

The black bars

The budget's last page is headed "2025 Standard Rates." Between the paid media line at the top and the heading "Other" near the bottom, the item numbers, descriptions and rates are blacked out; at the foot of the page is the line "Rates subject to standard adjustment increases." The redacted information, Mr. O'Connor's affidavit says, "contains Epiq's confidential and commercially sensitive information," per the O'Connor Affidavit, Sept. 1, 2026, para. 21, Ex. "D", p. 7.

The amended claims administrator orders of September 9 allow Epiq to ask the plan administrators, or the two courts, for permission to redact confidential or commercially sensitive information from the public copies of its budgets, per the Amended and Restated Claims Administrator Order, Sept. 9, 2026, paras. 17–18. "Such permission has been granted," the joint reasons say. The monitors and plan administrators, the court-appointed mediator, PCC representative counsel, Quebec class counsel, the tobacco companies and their lawyers had reviewed the redacted rates, and no concerns had been raised about them. "The Courts take comfort in that, but nonetheless issued a direction on September 14, 2026, requesting that Epiq provide them by direct email with unredacted copies of the First Quarterly Budget," per the Joint Endorsement, Sept. 29, 2026, paras. 15–16.

Having received them, the courts were satisfied the information had been properly redacted. The unredacted materials need not be filed; had they been, they would have met the Sierra Club requirements as reformulated in Sherman Estate v. Donovan, "and they would have been sealed." The redactions are confined to the hourly rates of Epiq timekeepers and standardized task rates, "so as to minimally intrude upon the public interest in the openness of our courts while protecting legitimate commercial requirements for confidentiality," per the Joint Endorsement, Sept. 29, 2026, para. 17.

For later budgets the judges set terms. If Epiq means to redact, it must make clear in the prayer for relief of its notice of motion that it seeks permission; send the courts unredacted versions in advance, by email and in confidence, "with the redactions replaced by highlighting for ease of reference for the Courts"; and give them the evidence and analysis to be satisfied the material could be sealed, "irrespective of whether or not it will be placed in the court file under seal." If redactions reach further, "stakeholders are reminded that orders for the sealing or redaction of documents, or any order that infringes on the open court principle, need to be supported by evidence and these requests should not be glossed over," per the Joint Endorsement, Sept. 29, 2026, para. 18.