Canadian Class Actions: A Beginner’s Guide to Collective Litigation

Denis Grigoras

Denis is a lawyer who draws on his background in complex legal disputes and transactions to problem-solve for his clients.

Class action lawsuits serve as an important mechanism for plaintiffs in Canada to pursue legal remedies as a collective. This type of litigation offers a more efficient way to resolve disputes that share common issues.

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Canadian Class Actions

Introduction:

Class action lawsuits serve as an important mechanism for plaintiffs in Canada to pursue legal remedies as a collective. This type of litigation offers a more efficient way to resolve disputes that share common issues. In this comprehensive guide, we will discuss the main aspects of class actions in detail, covering the initiation of proceedings, the certification process, litigation of common issues, addressing individual concerns, and the distribution of monetary awards.

I.  Starting a Class Action:

Initiating a class action lawsuit in Canada follows the same process as any other legal action. For instance, in Ontario, one would file a statement of claim or notice of application, while in British Columbia, a notice of civil claim, petition, or requisition is required. In Ontario, it is necessary to include the phrase “Proceeding under the Class Proceedings Act, 1992” in the title of the proceedings.

Provincial differences in class action legislation:

Each province in Canada has its own class action legislation and rules, which can result in differences in procedure and outcomes. For example, Quebec’s class action regime is based on civil law, while the rest of the provinces follow common law principles. It is important for plaintiffs and their counsel to be aware of these differences when pursuing a class action.

Federal class actions:

In addition to provincial class actions, there are also federal class actions that can be pursued under the Federal Courts Act. These cases typically involve matters under federal jurisdiction, such as intellectual property disputes, competition law issues, and certain types of product liability claims. Federal class actions follow similar procedural rules to those in the provinces, but with some distinct differences that can impact the course and outcome of the litigation.

Pre-filing considerations:

Before initiating a class action, plaintiffs and their counsel should carefully consider the merits of the case, the composition of the potential class, and the likelihood of obtaining certification. This may involve conducting preliminary research, consulting with experts, and analyzing the potential damages that could be awarded to the class members.

II.  Obtaining Certification:

The certification process:

Before a case can progress as a class action, the court must certify it. The certification order will designate the representative plaintiff(s), outline the class, determine the common issues, and at least tentatively approve a feasible plan. It is crucial for class counsel to prepare a well-defined class description, a focused set of unambiguous common issues, and a comprehensive plan for managing the class action. Although courts may permit amendments to certification documents, class counsel should not presume that any shortcomings can be effortlessly rectified at a later stage.

Certification criteria:

In order to obtain certification, a proposed class action must typically meet several criteria, which can vary slightly between jurisdictions. These criteria often include:

  1. A discernible class of plaintiffs that can be readily identified.

  2. Common issues among class members that can be efficiently addressed through a class action.

  3. A suitable representative plaintiff who can fairly and adequately represent the interests of the class.

  4. A well-defined litigation plan that demonstrates the class action is the preferable procedure for resolving the common issues.

  5. No conflicts of interest among class members or between the class members and the representative plaintiff.

The certification hearing:

The certification hearing is a crucial step in the class action process, where the court will decide whether the case should be allowed to proceed as a class action. At this hearing, the representative plaintiff and their counsel must present evidence and arguments supporting the certification of the class action, while the defendant(s) may present counterarguments and evidence to challenge the certification.

Appealing a certification decision:

If a court denies certification, the representative plaintiff may seek to appeal the decision to a higher court.

III.  Procedural Differences between Provinces:

Pre-certification requirements:

In most Canadian provinces, a proceeding is not considered a class action until it has been certified by the courts. In contrast, in Ontario, a matter that is initiated as a class action must undergo certification to proceed as one. Regardless of certification, actions initiated under the Class Proceedings Act, 1992, are deemed class proceedings, necessitating the courts to handle them in specified ways. For instance, even before certification, court approval is required for discontinuance. This requirement also applies to proceedings initiated under Alberta legislation, despite the province’s differing definition of a class proceeding.

Discontinuance and conversion to a regular proceeding:

In Mewburn v. Peers, the court ruled that once an action had been formally initiated as a class action, regardless of certification, it could not be discontinued or converted to a regular proceeding without court approval. This ruling was based on the court approval requirement outlined in section 35 of the Act, which applies to proceedings that are “the subject of an application for certification.” The court interpreted this to include any action initiated as a class action since all such actions must undergo an application for certification. Consequently, this decision aligns Alberta’s law on discontinuance of actions initiated as class proceedings with that of Ontario.

IV.  Common Issues Litigation:

Post-certification process:

Once a class action has been certified, it will proceed similarly to a traditional lawsuit, involving documentary and oral discovery, pre-trial motions, and the exchange of expert reports. These steps aim to resolve the common issues identified during the certification process.

Pre-trial case management:

Class actions are often subject to case management by the courts, which involves active judicial oversight to ensure that the litigation proceeds efficiently and fairly. This may include setting deadlines, scheduling pre-trial conferences, and managing disputes over document production, discovery, and expert evidence. Effective case management can help to streamline the litigation process and promote a timely resolution of the common issues.

Motion practice:

During the course of a class action, the parties may bring various motions before the court to address procedural or substantive issues. These may include motions to compel document production or discovery, motions to amend the pleadings, and motions for summary judgment. The outcome of these motions can have a significant impact on the course and outcome of the litigation.

Settlement negotiations and mediation:

Many class actions are resolved through settlement rather than trial. This can involve direct negotiations between the parties, as well as mediation or other forms of alternative dispute resolution. Settlements must be approved by the court to ensure that they are fair, reasonable, and in the best interests of the class members.

V.  Individual Issues:

Addressing individual issues:

Following the resolution of the common issues, it may be necessary to address individual issues that are specific to particular class members. The class action legislation provides courts with discretion to determine individual issues through further hearings, the appointment of a referee under the rules of court, or any other method deemed appropriate.

Individual assessments:

In some cases, individual assessments may be required to determine the extent of each class member’s damages or entitlement to other forms of relief. These assessments can be time-consuming and complex, particularly in cases involving large numbers of class members or varying degrees of harm. The courts may establish procedures for conducting individual assessments in an efficient and fair manner, such as through the use of standardized forms, templates, or questionnaires.

Opting out and individual litigation:

In most Canadian class actions, class members have the option to “opt-out” of the class action and pursue their claims individually. This may be an attractive option for class members who believe that they have a strong case and would prefer to control their own litigation rather than relying on the representative plaintiff and class counsel. However, individual litigation can be expensive and time-consuming, and opting out carries the risk that the individual claimant may not achieve a better outcome than they would have received through the class action. Class members considering opting out should carefully weigh the potential benefits and risks before making a decision.

VI.  Distribution of Monetary Awards:

Post-common issues resolution:

Often, after resolving the common issues, further procedures are necessary to determine individual liability and establish a method for distributing awarded amounts to individual class members. Courts have broad discretion to arrange for the distribution of monetary relief through “any means authorized by the court.” This can include court-ordered mediation, the appointment of a third-party administrator, or a simple mathematical division among class members.

Case management after common issues resolution:

The 2022 Ontario Court decision of Cavanaugh v. Grenville Christian College demonstrates the wide discretion given to the case management court following a judgment on the common issues. In this case, Justice Perell established an extensive process, referred to as an “Individual Issues Litigation Plan,” which allowed approximately 1,400 class members to move their individual cases toward completion.

Notice to class members:

Once a class action has been certified, and a settlement or judgment has been reached, class members must be notified of the outcome and provided with information about their rights and options, including the process for submitting claims and the deadline for doing so. This notice may be provided through direct mail, email, publication in newspapers or online, or any other method approved by the court.

Claims administration:

The administration of claims in a class action can be a complex and time-consuming process, particularly in cases involving large numbers of class members or complicated calculations of individual damages. Third-party claims administrators may be appointed by the court to manage the claims process, including the review and verification of claims forms, the calculation of individual awards, and the distribution of funds to eligible class members.

Cy-près distributions:

In some class actions, it may not be possible or practical to distribute all of the funds from a settlement or judgment to individual class members. In these cases, the courts may approve a cy-près distribution, which involves the allocation of the remaining funds to a charitable organization or other entity that serves the interests of the class members. This can provide a means of indirectly benefiting the class members and promoting the underlying objectives of the class action.

Conclusion:

Canadian class actions provide an important avenue for plaintiffs to seek collective redress for shared grievances. Understanding the intricacies of the class action process, from commencement to distribution of monetary awards, is vital for both plaintiffs and their legal counsel. As class actions continue to evolve in Canada, staying informed about the latest developments in legislation, case law, and best practices can help ensure that class actions remain an effective tool for achieving justice for those who have been wronged.

By gaining a comprehensive understanding of the Canadian class action landscape, plaintiffs and their legal counsel can navigate the complexities of the process more effectively, increasing the likelihood of a favourable outcome. With thorough preparation and strategic planning, class actions can serve as a powerful means to hold wrongdoers accountable and deliver justice to those who have been harmed by their actions.

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