Quebec class actions need no introduction, although they are in perpetual refinement and constantly evolving. 2017, year 2 of Quebec’s refurbished class action regime further to the enactment of the new Code of Civil Procedure (“CCP”) was no exception to the previous years and brought many interesting developments to class proceedings in Quebec.
In accordance with data made available by the Superior Court, 65 class actions have been instituted in 2017, an amount similar to the previous year, bringing to 338 the numbers of active class actions before the court, whether before or after authorization, or at the liquidation stage. These cases have led to 175 judgments rendered by the Superior Court in 2017 in class action matters.
I. 2017 – Thank You, Farewell
A. Asselin, a breeze or a storm?
Last year was prominently that of the Asselin1 matter rendered by the Court of Appeal and having already been discussed at length. The Court was reiterating the leniency and generosity of the authorization criteria, using a vocabulary of a rarely seen liberality to describe the applicable test in Quebec. Some have seen in the decision a lowering of the burden to authorize a class action in the Belle Province.
However, the threshold in relation to the authorization criteria was already low and flexible, Quebec being seen as a class action friendly jurisdiction for a long time given its leniency at the authorization stage. Could that burden be even lower?
The authorization criteria provided by Article 575 CCP have remained unchanged since class actions were introduced in Quebec law in 1979. In 2014, in Fortier v. Meubles Léon ltée2, the Court of Appeal, after the decisions of the Supreme Court of Canada in Infineon Technologies AG v. Option consommateurs3 and Vivendi Canada Inc. v. Dell’Aniello4, already indicated that the threshold at the authorization stage had not been increased, nor lowered. With the lack of a statutory change or further teachings from the Supreme Court of Canada, one can wonder what event in the legal order could warrant implementing a novel burden at the authorization stage.
The first judgments having been rendered at the authorization stage further to Asselin do not seem to have seen in it a new analytical framework overhauling that prevailing before. Time will tell us which faith the case law will reserve to Asselin, as well as the matter is pending at the leave application stage before the Supreme Court of Canada, which could give rise to further developments.
B. Other Novel Issues
Otherwise, many interesting decisions and novel issues arose in the course of 2017 in class action matters.
Notably, the Court of Appeal in Groupe Jean Coutu (PJC) Inc. v. Sopropharm5, recognized the existence of a right of appeal with leave of judgments rendered before the authorization stage under Articles 31 or 32 CCP, distancing itself from the applicable case law under the former Code of Civil Procedure that permitted such an appeal in very limited circumstances. However, the Court highlighted that the appeal of a judgment rendered before the authorization of a class action should be reserve to exceptional cases.
Also, the Court of Appeal in Vidéotron v. Union des consommateurs6, confirmed potentially for the first time that a class action can advance a claim in punitive damages only and autonomously. This decision also brings important clarification in consumer protection law by affirming that compensatory damages beyond the remedies provided by s. 272 of the Consumer Protection Act do not benefit from any presumption and must be proven under common law by showing the criteria to establish civil liability, i.e. a fault, damages and causation.
II. 2018 – On the Radar
Class actions will remain preeminent in the Quebec and Canadian legal landscape in 2018 and a reality of businesses conducting activities in Quebec.
A. Upcoming Developments
Amongst the developments likely to occur in the upcoming 12 months, the following could give rise to further issues or rebalance Quebec class proceedings:
a) The approval of a settlement and the fees payable to class counsel : In a rare decision, the Superior Court in Option Consommateurs v. Banque Amex du Canada7 refused to approve a settlement agreement, notably as a result o the low chances of success of the litigation and the unjust and unreasonable fees payable to class counsel. The court was also reminding to be careful and avoid class proceedings becoming an overly lucrative business and a source of financing for not-for-profit organizations. The Court of Appeal granted leave to appeal of that decision and will release rare reasons on the test for the approval of a settlement and the fees to be paid to class counsel.
b) The production of documents by the defendant before the authorization stage: In Derome c. Amaya Inc.8 brought under the Quebec Securities Act, the Superior granted a motion by the plaintiff seeking disclosure of certain information and documents before authorization and ordered the defendant to provide same to the plaintiff for the latter to meet its burden. The Court’s rationale was based primarily on general principles calling for collaboration between the parties during the litigation. Again, the Court of Appeal will be seized with the issue shortly.
c) The standing to sue a defendant with which the plaintiff has no legal relationship: Contentious issue amongst many, the Court of Appeal in Ameublements Tanguay inc. v. Cantin9 reaffirmed the principle set forth in Marcotte and the possibility in certain circumstances for a plaintiff to institute a class action against multiple defendants even if lacking a legal relationship with all of them, indicating that the legal interest to sue has to be addressed with flexibility in the context of class proceedings and in accordance with the role the representative plaintiff has to play therein. However, this case arises in the context of a claim for false representations that each individual defendant would have independently made to its own clients. A Motion for leave to appeal of that decision to the Supreme Court of Canada is pending.
B. The New Class Action Division for the District of Montreal
The Superior Court recently announced the anticipated launch of a novel process and operations for the Class Action Division for the District of Montreal as of September 1, 2018, unless the court’s priorities were to change.
The new Class Action Division will operate with a group of 10 justices specifically dedicated to hear all class action authorization demands filed in the District of Montreal and that will benefit from increased availabilities for that purpose. The measure seeks to shorten delays and increase efficiency in dealing with class actions.
The anticipated operation of the Class Action Division summarizes as follow:
a) The group of 10 justices will collectively handle all class actions filed in Montreal, each judge having various matters under case management and benefiting from the assistance of his or her colleagues whenever needed;
b) Should a class action be authorized, the matter will be reassigned to another judge that is not part of the dedicated group. Contrary to the current practice, the authorization of a class action will entail the designation of a new judge to case manage the litigation. Conversely, the group of 10 justices will not handle the merits of a class action;
c) Transition measures will be implemented for all class actions at the authorization stage to be transferred to a judge of the dedicated group, as well as those judges will likely be freed from the class action at the merits stage they are currently case managing.
These new measures should improve the handling of class actions at the authorization stage, especially in terms of scheduling and offering greater availabilities and flexibility in their procedural journey.
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.
Also, class actions tend to occur more and more quickly, sometimes hours after an event impacting the operations of a business has been made public. Business managers and officers should now more than ever be aware of this reality and factor it in their response plans to address a class action when in presence of a perturbing event affecting its clientele, the public or its stakeholders widely.