Class actions are constantly evolving and always reinventing themselves, knowing only as limit the creativity of litigants within the perpetual evolution of the law and business practices.
2016 was no exception to the previous years and brought significant developments in class action law, fostered by the new Code of Civil Procedure (“CCP”).
2016 – Interesting Developments and Statistics
The Supreme Court of Canada, the Court of Appeal of Quebec and the Superior Court of Quebec have rendered their share of interesting decisions in 2016. The rulings that more specifically drew our attention last year are the following:
- The scope of the newly enacted right of appeal of a judgment authorizing a class action (Article 578 CCP)
During the spring of 2016, the Court of Appeal was seized with three motions for leave to appeal of judgments authorizing class actions under new Article 578 CCP. Given the novelty of the issue, a complete formation of the Court dealt with all these motions in a joint hearing.
On November 22, 2016, the Court of Appeal rendered three intertwined decisions construing the newly enacted right of appeal of judgments authorizing a class action.1 The Court found that leave to appeal of such a judgment could be granted when it bears a significant error in relation to the authorization criteria or in relation to the facts pertaining to their application, or when in presence of a flagrant jurisdictional issue.
In all three cases, the motion for leave to appeal of the judgment authorizing the class action was dismissed.
- The obiter in Charles v. Boiron Canada Inc.2
In January 2015, the Superior Court denied to authorize a proposed class action in relation to alleged misleading representations regarding the efficiency of a homeopathic product aiming to relieve the effects of the flu.3
In October 2016, the Court of Appeal overruled that judgment and authorized the institution of a class action, notably in light of its recent analysis of the authorization criteria in Sibiga v. Fido Solutions Inc.4
However, it is the obiter from Justice Marie-France Bich, j.c.a. that struck our attention, in which heavy comments were made about the ineffectiveness of the authorization stage, the would-be generalized dissatisfaction of Quebec’s class proceedings system, including how it is addressed by the parties and the courts. Something to reflect on in the New Year.
- Multijurisdictional Class Actions
Multijurisdictional class actions remained part of the legal landscape in 2016. Notably, the Supreme Court of Canada in Endean v. British Columbia,5 recognized that superior court justices handling such cases could sit outside their home province jointly with their counterparts from other provinces, if in the best interests of justice and implemented guidelines in that regard.
Newly enacted Article 577 CCP offering greater protection to Quebec residents in multijurisdictional class actions was also addressed by the Superior Court to safeguard their rights and best interests in that context.6
Also, in other Canadian provinces, it is worth noting that the doctrine of abuse of process was revived to sanction and dismiss class actions raising the same issue filed successively by the same Class Counsel in numerous provinces. This could eventually raise interesting developments in Quebec.7
In terms of statistics, we listed 66 proposed class actions filed in 2016, largely involving Consumer Law, Product Liability, Competition & Antitrust and Securities claims, up to approximately 20% compared to the 54 proposed class actions we listed in 2015. These cases will certainly bring their load of further interesting developments in 2017 and the years to come.
Finally, in its last annual report filed on June 27, 2016, the Fonds d’aide aux actions collectives (Quebec’s Class Action Assistance Fund) highlighted that, between April 1, 2015 and March 31, 2016, class actions having been authorized amounted to approximately 50% and that an important number of settlements occurred during that same period.
Another interesting fact is that a significant increase of discontinuances filed in multijurisdictional proceedings in Quebec has been noticed by the Fonds d’aide aux actions collectives, an indication that Quebecers’ rights can be more and more litigated in other jurisdictions.
2017 – On the Radar
Class actions will remain part of Quebec’s and Canada’s landscape in 2017. Given our courts’ views about the broadness of the authorization criteria, the increase of class action specialized firms and the growing influence of the jurisdictions surrounding us, it is to be expected that the number of class actions to be instituted in 2017 will reach or exceed last year’s level.
Amongst the anticipated developments to occur, we foresee the following:
- The Unfriendly Substitution of the Plaintiff and a Potential Variation to the “First to File Rule”
In January 2017, the Court of Appeal will jointly hear two distinct cases in which the Superior Court has, on one hand, ordered the substitution of the Plaintiff at the request of a third party and, on the other hand, granted carriage of a claim to a competing class action filed second and suspended the first claim having been filed.8
The rulings to be rendered by the Court of Appeal may change established practices in Quebec regarding the conduct of class proceedings by competing Class Counsel and may lead to further preliminary issues in that regard, or foster the intervention of third parties, or class members to take over the control of cases.
- Settling Class Actions and the Burden Upon the Parties
The legal test to approve a settlement in class proceedings was not overhauled by the new Code of Civil Procedure.9 However, we are currently witnessing the imposition by the courts of further requirements and a heavier burden to demonstrate the justness and the reasonableness of the settlement, and that it is in the best interest of the class members.10
Should this trend continue, more sustained evidence at the stage of the approval of a settlement may be required along with a more rigorous demonstration of the fairness of the settlement for the class members.
- Are the Corporations With More Than 50 Employees Coming to Town?
Since January 1, 2016, legal persons, partnerships and associations are entitled to class membership, regardless of their number of employees.11 Various class actions brought before 2016 have already been amended to include such entities in their class definition.
The increase of larger businesses as Plaintiff or class members should give rise to new types of claim that are not seeking a remedy for individuals, in addition to more significant quantum.
In addition to these developments, it is to be expected that the Articles of the new Code of Civil Procedure which have modified the law applicable to class actions will continue to be much written about in 2017.
Finally, practitioners should pay special attention to the Registre central des actions collectives (Quebec’s Class Action Registry) and the impact of Article 573 CCP. Indeed, according to the Notice to the Members of the Bar from the Class Action Division of the Superior Court dated December 9, 2016,12 all pleadings (from plaintiffs and defendants) must now be entered into the Registry.
Considering the increasing number of class actions instituted year after year in Quebec, business managers need more than ever to be concerned about this reality in the conduct of their activities, the modification of their practices or the implementation of new processes or products.