A class action lawsuit in Canada allows one or more people to sue on behalf of a larger group or “class” of people who have been impacted in a similar way. The goal of a class action is to provide an efficient way for many people who have suffered small losses to band together and bring a case that would otherwise be too costly for any one individual to pursue on their own. Class actions serve an important role in providing access to justice in Canada.
What are the requirements for a class action lawsuit in Canada?
In order for a lawsuit to proceed as a class action in Canada, it must be certified by a court. The main requirements for certification are:
- The class is identifiable and has common issues of fact or law
- There is a representative plaintiff who can adequately represent the interests of the class
- The claims raise a valid cause of action
- A class proceeding would be the preferable procedure for resolving the common issues
The court will look at these criteria to determine if the case can appropriately go forward as a class action. All provinces have enacted class proceedings legislation that sets out the certification requirements.
Who can start a class action lawsuit in Canada?
A class action is started by one or more representative plaintiffs who have a claim that is typical of the larger class. These representatives take on a leadership role in the case. They instruct the lawyers and oversee the litigation process on behalf of the whole class. To serve as a representative, a person must:
- Be a member of the class they wish to represent
- Have a claim that is typical of the class
- Not have interests that conflict with other class members
- Be able to vigorously prosecute the interests of the class
The court will assess if the proposed representative meets these criteria when deciding whether to certify the action.
How does a class action get certified in Canada?
The process for certifying a class action involves the following steps:
- Plaintiff’s lawyer prepares certification motion materials and evidence
- Motion for certification is filed in court and served on defendants
- Defendants may file evidence in response
- Certification hearing takes place where judge hears arguments from both sides
- Judge decides whether to certify the action as a class proceeding
At the certification hearing, the judge will analyze if the proposed class action meets all the requirements discussed above. The plaintiff bears the burden of showing there is some basis in fact for each certification requirement. This is a preliminary stage, so the judge does not make any decision about the merits of the claim itself at this point. If certified, the litigation continues as a class action. If not certified, the case may continue as an individual claim.
What are the steps in a class action lawsuit in Canada?
The general steps in a class action lawsuit are:
- Case investigation and preparation of certification motion
- Certification motion and decision
- Notifying class members about the certified class action
- Examinations for discovery
- Motions and procedural steps
- Trial preparation
- Trial and judgment
- Settlement approval or appeal, if applicable
- Distribution of settlement funds or damages award to class members
This process can take several years from start to finish. Most class actions settle before making it all the way through a trial and judgment. Settlements must be approved by the court as fair and reasonable before funds can be distributed.
Who pays for a class action lawsuit in Canada?
Class actions in Canada are primarily funded by the law firm representing the class. The firm will front the necessary expenses and take on the risk of the case not succeeding. If the case is lost, the firm does not recoup these expenses. If the case succeeds or settles, the law firm will seek approval from the court to collect fees and expense reimbursement from the settlement funds or damage award.
Contingency fee agreements are commonly used in class actions to provide access to justice. This means the law firm gets paid only if the case succeeds. Their fee is a percentage (often around 30%) of the total recovery. Class members do not have to pay anything out of pocket up front or throughout the case.
How much money can you get from a class action lawsuit in Canada?
The amount of money individual class members may receive from a class action settlement or award depends on a few factors:
- Total size of the settlement or damages award
- Number of class members making claims
- The individual’s losses compared to the losses of others in the class
Settlements and damages awards in Canadian class actions can range from thousands to millions of dollars. In very large consumer cases, individual payouts may be small, perhaps only $20-$100. In cases where class members have significant individual losses, payouts to individuals could be in the tens of thousands.
What are some examples of class action lawsuits in Canada?
Here are a few notable recent class actions in Canada:
- VW Emissions Scandal – $2.4 billion nationwide settlement for Volkswagen’s use of emissions defeat devices in diesel vehicles
- LGBT Purge Class Action – $145 million settlement with federal government for discrimination against LGBTQ employees in armed forces, RCMP and public service
- Indian Hospitals Class Action – $1.1 billion settlement regarding harm suffered at federally operated Indian Hospitals
- LGBT Blood Donation – $5.5 million settlement regarding discrimination for men who have sex with men donating blood
- ixty Ford F150 Truck Fuel Economy – $1.57 million settlement for overstating fuel efficiency of F150 pickup trucks
What types of cases are class actions suited for in Canada?
Some examples of situations where class actions may be appropriate include:
- Mass product defects impacting consumer safety or financial loss
- Systemic discrimination in employment, services, housing, etc.
- Privacy breaches or data security incidents involving personal information
- Price fixing cartels or other anti-competitive conduct
- Securities misrepresentations or misleading disclosure
- Consumer protection violations
- Environmental contamination harms
The key features are that a defined group suffered similar harm that is significant enough to justify a class proceeding, but small enough on an individual basis that a class action is the only realistic means for them to obtain relief.
Should I join a class action lawsuit in Canada?
If you have been harmed in a way that matches a certified class action, there are significant benefits to joining:
- Strength in numbers – More leverage and chance of forcing a settlement or judgment
- Shared costs and risks – Class counsel handles the complex litigation
- Experienced counsel – Specialized lawyers with expertise in class actions
- No upfront costs or fee risk – Lawyers paid only if successful
Joining a class action essentially outsources the claim to experienced lawyers without cost risk. The main downside is less control compared to pursuing one’s own individual lawsuit. Overall, participating in a relevant class action is advisable for most class members in Canada.
How do I join a class action lawsuit in Canada?
The process for joining an existing class action will depend on the case, but generally involves:
- Reviewing the class definition and your eligibility
- Contacting class counsel for information
- Completing a retainer agreement with class counsel
- Providing information about your situation and losses
- Keeping class counsel updated on your contact information
There is no cost to retain class counsel. When a settlement or judgment is reached, class members must submit claims detailing their losses to receive compensation. Class counsel will assist members through the claims process.
Can I start a class action lawsuit in Canada?
Any Canadian resident who was harmed can potentially start a class action, however it is advisable to have the assistance of an experienced class action law firm. The criteria for starting a class action include:
- Sustaining losses similar to those suffered by a proposed class of people
- Believing you can responsibly represent the interests of the class as a representative plaintiff
- Being prepared to take an active role in instructing class counsel
- Committing time and effort to the class action process, which may take several years
Those interested in commencing a class action are encouraged to consult with a specialized law firm to assess the viability of bringing a class proceeding.
What if I want to opt out of a class action in Canada?
Class members have the right to opt out of most class actions certified in Canada. Reasons someone may choose to opt out include:
- Preferring to pursue an individual claim and retain control over their case
- Dissatisfaction with the proposed representative plaintiff or class counsel
- Believing their specific losses and interests will not be adequately addressed in the class action
- Not wanting to share any proceeds from the class action with other class members
The opt out process involves submitting a written request to opt out within the specified timeline to the class action administrator or representative counsel. Those who properly opt out will not be bound by the outcome of the class action.
Can I get involved or object in a Canadian class action?
Class members have various opportunities to participate or object in a class proceeding, including:
- Certification – Class members can object to certification of the lawsuit as a class action
- Settlements – Members can object to any proposed settlement and provide reasons why it should not be approved
- Lawyers’ fees – Members can make submissions on the reasonableness of lawyers’ fee requests
- Distribution – Members can object to the plan for distributing settlement funds to the class
Members who want their voices heard should take note of timelines and participation opportunities communicated by class counsel. Those with significant involvement may be able to recover costs.
Conclusion
Class actions play an important role in Canada’s civil justice system. By aggregating many claims into one case, class actions provide access to justice and judicial economy. They allow wrongs to be efficiently righted even when individual losses are relatively small. For those who have suffered harm as part of a group, participating in a class action typically offers the best chance at meaningful compensation. With the assistance of experienced class counsel, class members can benefit from the economies of scale and merits of a collective approach – all without any upfront costs or risks.