In June 3, 2009, the Quebec National Assembly adopted Bill 9 entitled "An Act to amend the Code of Civil Procedure to prevent improper use of the courts and promote freedom of expression and citizen participation in public debate" (the "Act"). Essentially, this law aims to put an end to the use of lawsuits that infringe on the freedom of expression of individuals or public interest organizations. The strategy consists in filing legal proceedings demanding the payment of huge monetary awards, which are disproportionate with the defendants’ ability to pay, in order to intimidate and muzzle them. In most cases, there is an imbalance of power and the significant legal fees can bring about the financial ruin of the defendant and thus foreclose its ability to participate in public debate. This type of lawsuit is known as a SLAPP lawsuit.
There is no doubt that this judicial strategy compromises freedom of expression, one of the essential values of the Charter of Human Rights and Freedoms. For this reason, the State of California, in 1992, amended its rules of civil procedure to allow the Courts to dismiss an action which touches on the defendant’s freedom of expression, when the plaintiff has failed to establish if the action has a chance of success. A similar statute was enacted in the States of New York, Oregon, Massachusetts and Delaware.
The purpose of the Act is mentioned in its preamble which emphasizes the importance of freedom of expression and the objective to "prevent improper use of the courts and discourage judicial proceedings designed to thwart the right of citizens to participate in public debate".
Article 54.1 of the Code of civil procedure allows, with leave from the Court, or even on the Court’s own initiative, to declare a procedure excessive, particularly when it "restricts freedom of expression in public debate". The abuse can result from a clearly unfounded action or proceeding, a frivolous or dilatory action, an action instituted in bad faith or to harm somebody, or even from a belligerent behaviour. In other words, the field of application of the amendments to the Act exceeds the SLAPP suits per se and encompasses all frivolous and excessive lawsuits.
Article 54.2 reverses the burden of proof when a party summarily establishes that the action is abusive. The plaintiff then has the burden to prove that the proceedings which were instituted are not excessive or unreasonable, and that they are not unfounded in law:
54.2. If a party summarily establishes that an action or pleading may be an improper use of procedure, the onus is on the initiator of the action or pleading to show that it is not excessive or unreasonable and is justified in law.
The use of the terms "summarily" and "may" is not neutral. Their ordinary meaning entails a brief, informal, and simple demonstration. In practice, the implementation of this provision may prove to be trickier than it seems. It may in fact be difficult to assess, on a simple reading, whether proceedings are excessive. It is important to note that the Court will have to presume the veracity of the facts alleged in the proceedings when judging such a dismissal of action.
Therefore, in respect of a defamation lawsuit, the Court will have to accept the plaintiff’s proposition that the comments conveyed by the defendant are false, and have harmed the reputation of the victim. In this context, it will be very difficult to assess the excessive character of the lawsuit. Perhaps the Courts will only sanction proceedings where the monetary awards sought are largely disproportionate with the alleged fault and with the financial means of the defendant.
As regards the applicable sanctions, articles 54.3, 54.4 and 54.5 of the Code of civil procedure now allow the partial dismissal of an action, a stay of proceedings, or special case management. A plaintiff may also be ordered to provide a provision for costs. The Court can also condemn a party to pay damages, in particular for the legal fees that were incurred, or even the payment of punitive damages.
Finally, the Act modifies the potential liability of directors and officers by indicating that if they have participated in the decision to institute a legal action which has been recognized as excessive, they can be personally condemned to pay damages. The scope of this obligation is far from marginal, and directors and officers should take such decisions on the basis of legal advice obtained by the corporation which confirms that the legal action to be instituted is well-founded.