Class Action - Frequently Asked Questions
What is a class action?
A class action is a civil lawsuit brought by one or more representative plaintiffs on behalf of a larger group of persons (the class members). A class action attempts to have common or similar claims resolved in a single proceeding with the result binding upon all class members and opposing parties.
When Are Class Actions Preferable to Individual Actions?
Where multiple plaintiffs are similarly situated, a class action eliminates the need to participate in repetitive and costly hearings and individual suits. In cases where it would not be economical or practical for an individual to bring a claim and multiple claimants are similarly affected, it may be viable to proceed as a class action.
When does an Action Become a Class Action?
In Ontario, a matter which is started as a class proceeding requires an Order for Certification from the Court certifying it as a class action.
What is Certification?
At the certification stage the court will consider whether there is a cause of action and identifiable class, whether common issues are raised, whether a class action is preferable for the resolution of common issues and whether there is a suitable representative plaintiff. Then, if the Court believes a class action is appropriate it will certify the action.
Who is the Representative Plaintiff?
The representative plaintiff is a class member who represents the entire class in the action. The representative plaintiff must fairly and adequately represent the interests of the class, not have an interest in conflict with other class members, and have a plan for pursuing the action (prepared by the lawyers) and notify class members. Representative plaintiffs take on greater rewards and risks than other class members and they must discuss those with a lawyer.
What Happens After Certification?
Traditionally, a very large number of class actions that get certified end up settling. However, if a settlement is not reached the action will proceed in the manner of a traditional lawsuit and move towards resolution of the common issues by a trial before a judge.
What about Individual Issues?
In many cases, following a determination of the common issues, it is necessary to determine individual issues. Broad discretion is given to the Court to arrange for the distribution of monetary relief. The Court may order individual assessments for class members or may divide relief awarded among the class members in some fair way. There is no shortage of options available to the parties and the court, which must approve any settlement.
What happens if a Class Action is lost?
Canadian law often requires that a losing party in a lawsuit pay a portion so the winning parties legal costs. This is a risk present in any lawsuit, including a class action. However, in a class action only the representative plaintiff bears this responsibility and so it is important that the representative plaintiff discusses these risks in advance. Generally, class members are not required to bear the risk of costs and then our legal fees are dealt with on a contingency basis.
How do Legal Fees Work?
The representative plaintiff usually enters into an agreement with class counsel with respect to legal fees and disbursements. Any agreement, with respect to legal fees in a class action must be approved by the Court. Generally, class counsel is paid on a contingency basis, which provides that class counsel is only paid if the class action is successful and costs are recovered from the defendants.
How do I Know if my Case Should Proceed as a Class Action?
If you think you have a case that should be commenced as a class action, please contact a class action lawyer at Thomson, Rogers for a free consultation.