CLIENT GUIDE

   Class Proceding Overview

(This is an edited version of our Client Guide which provides general information and is made available to our clients to assist them to understand the class proceeding process. This is not intended to constitute legal advice, which by its nature is situation specific. If you have questions about a specific legal problem, you should consult a lawyer who will provide legal advice only after reviewing all the facts relevant to your situation before providing that advice, rather than relying on the general information provided in this Guide.)

This Guide describes the class proceedings process in Ontario and outlines the major elements of this developing form of action.

The Objectives

The three main objects of the class proceeding legislation are:

(a) judicial economy, or the efficient handling of potentially complex cases of mass wrongs;

(b) improved access to the courts for those whose actions might not otherwise be asserted. This involves claims which might have merit but the legal costs of proceeding were disproportionate to the amount of each claim and hence many plaintiffs would be unable to pursue their legal remedies, and

(c) modification of behaviour of actual or potential wrongdoers who might otherwise be tempted to ignore public obligations.

The Class Proceedings Act, 1992, sets out a detailed code for certifying a proceeding as a class proceeding. In addition, contingent fees and the application of a multiplier to time-based fees are specifically authorized provided that they are approved by the court. Ancillary amendments to the Law Society Act, R.S.O. 1990, c. L.8, have created a Class Proceedings Fund under the auspices of the Law Foundation of Ontario which has appointed a Class Proceedings Committee to administer it. The Fund will provide financial assistance to plaintiffs in class proceedings and will pay costs awarded against representative plaintiffs to which it has provided funding. The Rules of Civil Procedure have been substantially amended and contain specific rules necessary for discovery, costs and appeals due to the particular requirements of a class proceeding.

Certification

An action or application must be certified as a class proceeding and a representative plaintiff or applicant appointed by the court before the proceeding can continue as a class proceeding. Certification is available where:

(a) the pleadings or notice of application discloses a cause of action ;

(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff (applicant) or defendant (respondent);

(c) the claims or defences of the class members raise common issues:

(d) a class proceeding would be the preferable procedure for the resolution of the common issue, and

(e) there is a representative plaintiff (applicant) or defendant (respondent) who:

(i) would fairly and adequately represent the interests of the class;

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members.

The representative plaintiff need not be a typical plaintiff in the sense that he or she must exhibit characteristics typical of the class members; rather, it is sufficient if the court is satisfied that the representative plaintiff can fairly and adequately represent the interests of the class.

There are three types of certification motions. First, a plaintiff or applicant may commence a proceeding and then bring a motion for certification of the proceeding as a class proceeding and appointment as a representative plaintiff or applicant.

Second, a defendant or respondent in two or more proceedings may bring a motion for certification of the proceedings as class proceedings and appointment of a representative plaintiff or applicant.

Third, any party to a proceeding where there are two or more defendants or respondents may bring a motion for certification of the proceeding as a class proceeding and appointment of a representative defendant or respondent.

In many cases, the interest of the members of the class will arise in different ways and the Class Proceedings Act, 1992, permits the court to provide for different subclasses of different representative parties. While this was expected to overcome some of the difficulties in the jurisprudence under the former procedure, the statutory test of common issues will still be examined carefully.

The order certifying the proceeding as a class proceeding must describe the class and appoint representative parties. It must also set out the nature of the claims (or defences if the class is a class of defendants or respondents) and the relief sought by the class (or against the class if the class is a class of defendants or respondents). In defining the class, overly broad descriptions may include persons, such as non-residents, over whom it may be later argued that the court does not have jurisdiction. The order must also provide a mechanism for opting out of the class and a date or time by which class members may no longer opt out.

Once a proceeding has been certified as a class proceeding, the representative party is required to give notice to all potential members of the class. The form of notice must be approved by the court. Members of the class have the ability to opt out of the proceedings until the date or time set out in the order. The certification order may also preserve the individual claims of class members. There is great flexibility to deal with such individual claims and the Class Proceedings Act, 1992, permits the judge who dealt with the class proceeding or any other judge to determine the individual issues; or, a reference may be directed; or, with the consent of the parties, a court may direct that the issues be determined in any other manner. Statistical and survey evidence is permitted for the purposes of determining issues relating to them or distribution of a monetary award under the class proceeding.

The Class Proceedings Act, 1992, confirms that the rights of discovery are the same between the parties to the proceeding as set out in the Rules, however, where a party wishes to examine a class member, court approval is required and the statute sets out criteria which the court is to consider. Where it is necessary, any party may move for directions with respect to the conduct of the class proceeding. Motions in class proceedings are to be heard by a single judge.

In assessing damages, the court may determine the liability in the aggregate and may direct the means of distribution of the judgment amounts. Class proceedings cannot to be abandoned or discontinued without court approval.

Under the Class Proceedings Act, 1992, class members are protected from the class costs and costs can only be awarded against the representative party, except in relation to individual claims for which individual class members are individually responsible if so ordered. Significantly, the Class Proceeding Fund is responsible for payment of costs ordered against a representative party to which the Fund has provided financial assistance. The practical effect of this costs provision is that all representative plaintiffs should seek financial assistance from the Class Proceeding Fund if only to protect the representative plaintiff from an adverse costs order. In exercising its discretion as to costs, the court under the Class Proceedings Act 1992, may consider whether the class proceeding was a test case, raised a novel point of law or involved a matter of public interest. The court is not to consider the impact of a costs award on the Class Proceedings Fund. The cost consequences of rule 49.10(2) regarding failure to accept a defendant's offer do not apply to class proceedings.

The court has established-a Class Proceedings Registry to monitor the commencement and progress of all class proceedings in the province. The registry will avoid members of a class attempting to certify a second proceeding once a class has been certified.

 

   FURTHER QUESTIONS

Any questions? If you have any questions about class proceedings, please contact us at:

W. Bruce Drake
Hooey Remus
Telephone: (416) 362-2051
Facsimile: (416) 362-3646
330 Bay Street, Suite 210
Toronto, Ontario M5J 2S8
 
eMail: bdrake@hooeyremus.com
Website: www.hooeyremus.com

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