Where multiple aspiring class representatives file concurrent applications involving the same parties, concerning the same object and presenting identical facts, the court cannot allow all the applications to proceed. This raises the question: which application will be allowed to proceed and what will happen of the others? The answer in Québec differs significantly from the answer in the common law provinces.
The Servier Rule: First to File
The rule in Québec, as the Court of Appeal set out in Hotte c. Servier, is rather simple: the first applicant to file an application is allowed to seek the authorization to proceed with the class action. Meanwhile, subsequent applications are stayed. In the event the first applicant later fails in obtaining the authorization, a subsequent applicant may try and take its place.
A Relaxation of the Servier Rule
The main benefit of the Servier rule is its simplicity. Compared to the approach in other provinces, which requires courts to hold a carriage hearing and determine which of the concurrent applications should proceed considering several factors, the Québec approach is predictable and avoids costly legal battles at such an early stage of the proceedings.
Yet, the Servier rule does have its shortcomings. An applicant racing to file its application is favoured over one wishing to take more time and ensure the quality of its application. The rule also allows filing an application for purposes other than the active advancement of the claim, such as obtaining a settlement.
In 2012, the Court of Appeal in Schmidt c. Johnson & Johnson relaxed the rule in an effort to maintain the benefits while averting the shortcomings. This new flexible rule provides that:
- There is a presumption that the first application takes precedence over subsequent applications, in accordance with the Servier rule;
- Subsequent applications are stayed only to be heard, chronologically, in the event the first application is dismissed;
- Subsequent applicants may however rebut the presumption. This rebuttal does not require embarking on a comparative exercise to show which application is better. Rather, it requires showing serious defects in the first application and other indicia suggesting that the first application is not being pursued in the best interest of the putative class members.
Since Schmidt, the case law remains surprisingly thin on this issue. In December of 2015, in Badamshin c. Panasonic Corporation et al., (December 22, 2015, Montreal, 500-06-000703-146, 500-06-000704-144, 500-06-000705-141, 500-06-000712-147 (QC)), the Superior Court, faced with four applications, applied for the first time the approach set out in Schmidt. Justice Déziel found that the first application was not being advanced in the best interest of the class members, and consequently, that the presumption was rebutted. Certainly, as competition among class counsel heats up, concurrent application disputes are bound to arise more and more in the future.