Legal framework and trends

Available actions

What types of class/collective action are available in your jurisdiction, and what are their respective benefits and drawbacks? Are there any restrictions on when a class/collective action can be used?

Class actions can be brought in every province and in the Federal Court. While other forms of collective action also exist (eg, representative actions), class actions have become the preferred method of litigating collective claims. Virtually any claim seeking collective redress can be litigated as a class action, provided that it meets the procedural requirements (discussed below). There is no category of claims that has been determined to be inappropriate for class action litigation.

Compared to other forms of collective action, class proceedings offer plaintiffs the following advantages:

  • Canadian courts permit the certification of national and even international classes.
  • In many jurisdictions, class actions operate on an opt-out basis.
  • Class counsel are permitted to be paid through contingency fee arrangements (subject to court approval).
  • In some jurisdictions, limitation periods are tolled for all members of the proposed class while the action is pending.
  • Statutory provisions in many jurisdictions permit the use of statistical evidence and the awarding of aggregate damages.

In some provinces, partial funding is available to plaintiffs. The drawbacks for plaintiffs include the fact that settlements and counsel fees must generally be approved by the court. In some jurisdictions, a proposed class action cannot be discontinued or withdrawn without court approval.


How common are class/collective actions in your jurisdiction? What types of claim/dispute are they typically used for?

Class actions are relatively common in Canada. There is an active bar of plaintiffs’ lawyers who work closely with counsel in the United States. Copycat class actions that mimic US litigation are common.

Class actions are recognised in Canada as a means of addressing claims which would not otherwise be pursued because of economic or other social impediments, thereby:

  • providing access to justice;
  • improving efficiency in handling mass claims; and
  • modifying the behaviour of wrongdoers.

Typical claims brought before the courts include:

  • constitutional challenges and claims regarding the activities of government entities;
  • statutory interpretation matters;
  • consumer claims;
  • negligent misrepresentation claims;
  • securities claims;
  • insolvency proceedings;
  • product liability claims;
  • environmental claims;
  • competition law claims;
  • contractual disputes with public utilities;
  • claims related to the contractual interpretation of insurance policies and agreements between customers and financial institutions;
  • labour and employment disputes;
  • real property disputes;
  • patent, trademark and copyright disputes;
  • franchising disputes; and
  • mass tort claims.

Legal base

What is the legal base for class/collective actions in your jurisdiction?

Class actions are a procedural vehicle and do not alter the substantive rights of the parties. The entitlement to assert claims for relief is derived from:

  • common law;
  • statutes (both federal and provincial); and
  • the Code of Civil Procedure in the Province of Quebec.

Comprehensive class actions legislation exists in:

  • Alberta (since 2004);
  • British Columbia (since 1995);
  • the Federal Court (since 2002);
  • Manitoba (since 2002);
  • New Brunswick (since 2006);
  • Newfoundland (since 2001);
  • Nova Scotia (since 2008);
  • Ontario (since 1993);
  • Quebec (since 1978); and
  • Saskatchewan (since 2002).

In 2002 the Supreme Court of Canada held that class actions can be brought in all Canadian jurisdictions at common law and provided a procedural blueprint for such proceedings, even where no authorising statute exists.

Court system

Briefly describe your jurisdiction’s court system and procedure rules.

Canada’s judicial authority is divided between federal and provincial courts. Authority over property and civil rights falls within provincial jurisdiction. As a result, most class actions can be brought in only the provincial courts.

All provincial and territorial courts of superior jurisdiction have inherent jurisdiction to hear cases on any subject, except those that are specifically limited to another level of court by statute. Therefore, virtually all civil claims, including class actions, may be brought in these provincial or territorial courts.

Canada has a parallel federal court system. The Federal Court of Canada has civil jurisdiction, limited to matters identified in specific federal statutes, including class actions against the federal government or a federal ministry or crown agency.

One of the unique challenges in Canada is that the courts of each province are independent of one another, yet each has the authority to certify a national class action. It is possible to have overlapping class actions proceeding at the same time, each representing the same class and asserting the same claims. There is no equivalent to the US multi-district litigation procedure and the coordination of proceedings in different jurisdictions largely depends on the decisions of individual judges.


How are appeals of class/collective actions handled?

Appeal routes vary from one jurisdiction to another.

In Ontario, an order certifying a class proceeding can be appealed only with leave of the court, whereas an order denying class certification can be appealed as of right. The test for leave requires a consideration of whether the issue is one of public importance. Ontario’s appellate review includes an appeal to an interim appeal court, the Divisional Court of Ontario and thereafter the Ontario Court of Appeal.

In Quebec, plaintiffs have always had a right to appeal if certification is denied. As a result of amendments to the Code of Civil Procedure, which came into force on 1 January 2016, defendants have the right to seek leave to appeal from a judgment authorising a class action. The test for granting leave is stringent and appeals will be allowed only in exceptional cases.

In British Columbia, Alberta and the Federal Court, an appeal is as of right regardless of whether the class action is certified. In Saskatchewan and Manitoba, an order certifying or refusing to certify a proceeding as a class action may be appealed only with leave of a justice of the Court of Appeal. In New Brunswick, Nova Scotia and Newfoundland and Labrador, leave is required to appeal an order certifying or decertifying a class action.

A further appeal to the Supreme Court of Canada requires leave, which is granted in only a small minority of cases.

Statute of limitations

What is the statute of limitations for bringing class/collective actions?

Class actions are not subject to special limitation periods. The applicable limitation period will depend on the nature of the claim asserted and will be the same period that would apply if the claim were being brought in an individual capacity. Limitation periods are governed by various statutes both federally and provincially.


Are any reforms envisaged or underway in relation to class/collective actions?

The Law Commission of Ontario is conducting a review of Ontario’s class proceedings legislation. This is the first review of class action legislation in Ontario since the legislation was enacted in 1993. The Law Commission is due to issue its report by the end of 2018.

In British Columbia, the class proceedings legislation was amended (effective 1 October 2018) to require proposed representative plaintiffs to provide notice of proceedings to representative plaintiffs in other jurisdictions, where the same or similar claims or issues are being litigated and representatives from other jurisdictions have the right to appear to make submissions. The court must consider whether it is preferable to resolve the claim (or any part of it) in another Canadian jurisdiction and is in line with amendments previously made by Alberta and Saskatchewan to their equivalent legislation.

The Canadian Bar Association (CBA) National Task Force on Class Actions has drafted the Judicial Protocol for the Management of Multi-jurisdictional Class Actions, which was passed at the CBA Council Meeting on 14 August 2011, to address the approval and administration of multi-jurisdictional class settlements. In 2016 the task force revised the protocol to provide best practices for case management and coordination between actions and judges in different jurisdictions. It requires plaintiffs’ counsel to develop a notification list of all known counsel and judges in overlapping proceedings which must be provided to the court at each case conference. The protocol was adopted by the CBA on 15 February 2018. It represents best practices and a roadmap for coordinating pan-national class action proceedings.

In the Districts of Montreal and Quebec, on 1 September 2018 a dedicated group of 10 judges overseen by a coordinating judge were assigned exclusivity to hear class actions at the authorisation (ie, certification) stage. The aim is to ensure that cases proceed quickly to the authorisation stage and are overseen by judges who have particular expertise and knowledge.

Class formation and procedures


Who has standing to bring a class/collective action? Are there any explicit restrictions?

Any legal person – whether an individual, corporation or entity that has the legal status to be a plaintiff (eg, partnerships or associations) – can commence a class action, provided that the proposed plaintiff is a suitable representative of the class.

Litigation about the standing of a plaintiff to bring a class action has focused on whether:

  • there must be at least one plaintiff with a viable claim against each defendant in cases involving multiple defendants; or
  • a representative plaintiff can bring a class action against defendants against which the plaintiff has no personal cause of action.

Canadian courts have differed in their approach to this issue and the answer varies from province to province.


What criteria and procedural requirements apply for class certification?

The procedures and requirements for certifying a class proceeding are relatively similar throughout all Canadian jurisdictions, with the exception of Quebec.

Class actions outside of Quebec In all of the common law provinces and territories in Canada, a proposed class action is commenced by filing a statement of claim, application or petition and the plaintiff subsequently brings a motion asking the court to certify a class action. This requires the party proposing to certify the action to serve and file a motion with supporting evidence and a statement of law and fact in support of the motion. The proceeding does not become a class action until it is certified. Some common law jurisdictions use the term ‘applications’ instead of ‘motions’. For ease of reading this summary the term ‘motions’ is used to refer to both motions and applications. In some provinces it may also be possible to certify a defendant class, however, it is more common that it is the plaintiff who is moving to certify a plaintiff class.

Generally, class action statutes in the common law provinces and the federal courts impose the following requirements for an action to be certified as a class action:

  • the pleadings disclose a cause of action;
  • there is a class capable of clear definition;
  • there are issues of law or fact common to all class members;
  • a class action is the preferable procedure to advance the litigation; and
  • the representative plaintiff adequately represents the interests of the class.

The plaintiff bears the onus of proving all of the above requirements.

For purposes other than demonstrating that the pleadings disclose a cause of action, the plaintiff must establish that there is ‘some basis in fact’ for concluding that the requirements can be met. The court must determine whether it is plain and obvious that the pleadings fail to disclose a cause of action, assuming the factual allegations to be true.

To meet the requirement for an identifiable class, the class definition must:

  • identify those persons who have a potential claim for relief against the defendants;
  • define the parameters of the lawsuit to identify those persons who are bound by its result; and
  • describe who is entitled to notice of the action
  • must include at least two persons.

The plaintiff must establish that there are common issues necessary to the resolution of each class member’s claim. A common issue must be capable of determination at a common issues trial and cannot be dependent on individual findings of fact. Class members do not need to be identically situated and common issues need not predominate over individual issues. Where questions relating to causation or damages are proposed as common issues, the plaintiff must demonstrate a workable methodology for determining such issues on a class-wide basis.

The plaintiff must also show that a class proceeding would be the preferable procedure for resolution of the common issues. The requirement for a preferable procedure captures two propositions:

  • a class proceeding must be a fair, efficient and manageable method of advancing the claim as a whole; and
  • a class proceeding must be preferable to other methods of advancing the claim (eg, joinder of actions, test cases and consolidation of actions).

The question of preferability will be examined through the lens of the three principal advantages of a class action:

  • judicial economy;
  • access to justice; and
  • behaviour modification.

The final certification criterion, while not onerous, requires the plaintiff to show that they can fairly and adequately represent the proposed class. A proposed representative plaintiff must have a viable personal claim, demonstrate a willingness and ability to adequately advance the interest of the class and cannot be in a conflict of interest with other proposed class members.

Class actions in Quebec In Quebec, a claimant must obtain authorisation to commence a class action. Class actions are not individual actions that become class actions if certified, but are proceedings initially filed on behalf of the whole class and may be struck entirely if the application for authorisation is denied.

The test for authorisation requires the court to determine whether:

  • the recourses (ie, claims) of the members raise identical, similar or related questions of law or fact;
  • the facts claimed seem to justify the conclusions sought;
  • the composition of the class makes joinder difficult or impracticable; and
  • the proposed representative plaintiff is in a position to represent the members of the class adequately.

The court need not consider whether a class action would be preferable to other forms of proceeding. The moving party must only show that joinder and representative proceedings would be impracticable.

Joining claimants

How are claimants joined to the class/collective action? Are actions formed on an opt-in or opt-out basis?

Canada has both opt-in and opt-out jurisdictions. If the action is certified or authorised, class members will be given notice of the claim in the manner ordered by the court. Notice is typically published by various forms of media. The court order will set the date by which class members must decide whether they want to participate, which is typically 30 to 60 days after notice is published.

Class members who reside in the province where the class action was certified (or authorised, in the case of Quebec) will be members of the class unless they take a positive step to opt out of the class proceeding. The same opt-out requirement applies to class members resident in other provinces, unless the action is certified in New Brunswick or Newfoundland and Labrador. Class actions in those provinces are opt out for provincially-resident class members and opt in for class members resident elsewhere in Canada.

The Ontario Court of Appeal has held that, at least in Ontario, a court may certify an international opt-out class, provided that the court has jurisdiction over the representative plaintiffs’ claims and foreign class members share common issues with those representative plaintiffs. An application for leave to appeal was denied by the Supreme Court of Canada.


What is the typical timeframe for class/collective action proceedings?

Outside Quebec In the common law provinces and territories, the main stages of the litigation are:

  • the commencement of the litigation through the issuance of a statement of claim, notice of civil claim or similar pleading;
  • the appointment of a case management judge;
  • pre-certification motions with leave of the court, which may include:
    • carriage motions;
    • motions for leave to bring secondary market claims, as required under certain provincial securities legislations;
    • pleadings motions;
    • summary judgment motions; and
    • jurisdiction and stay motions;
  • the filing of a responsive pleading by the defendant either voluntarily or by order of the court;
  • the exchange of certification motion materials and written argument; and
  • the certification hearing and presentation of oral argument.

The judge hearing the motion will decide whether to certify the action as a class proceeding and will address the other requests in the motion materials. Typically, a decision granting certification will:

  • define the class;
  • appoint one or more class representatives;
  • set out the common issues certified by the court;
  • specify the time and manner for notice of certification to be given to the class, and how class members can indicate whether they wish to participate in the class action; and
  • address any other procedural issues raised at certification.

If certified, the next steps will usually be:

  • giving of notice to the class of certification and running of the opt-out/opt-in period;
  • documentary and oral discovery;
  • trial of the common issues; and
  • trial of any individual issues on individual causation and damages.

It is not uncommon for one to two months to pass before a case management judge is appointed, who will set a schedule for the steps leading up to certification. Certification motions are usually heard within six months to one year of the date on which a case management judge is appointed. Depending on the complexity of the case and whether there are any appeals, it can take several years for a case to proceed to a common issues trial.

Class actions in the Federal Court seem to progress more quickly, but there have not been enough class actions brought in that jurisdiction to reach a definitive conclusion on timing.

Quebec Class action litigation follows a slightly different path. The main stages are:

  • the filing of an application for authorisation;
  • the initial case management hearing and request for leave to bring pre-authorisation motions; and
  • the oral arguments contesting the application to authorise the bringing of a class action.

If the class action is authorised, the judgment granting the motion will typically:

  • describe the class whose members will be bound by any judgment;
  • identify the principal questions to be dealt with collectively and the related conclusions sought;
  • order the publication of a notice to the members; and
  • specify the date after which a member can no longer request exclusion (to opt out) from the group.

If authorisation is granted, the steps that usually follow are:

  • giving of notice of authorisation and running of the opt-out period;
  • filing of the class pleading;
  • documentary and oral discovery;
  • filing of a statement of defence;
  • trial of the common issues; and
  • determination of any individual issues.

Parties can expect to argue the authorisation motion within one year from the date on which the class action motion is filed. If authorised, and depending on the complexity of the case, it often takes more than three years before the parties proceed to trial on the merits.



What disclosure/discovery mechanisms are available, if any? In what circumstances will a court order disclosure of documentary evidence?

In the common law provinces and territories, pre-certification document disclosure is generally granted in only exceptional cases.

Because certification is intended to be procedural, the threshold for pre-certification production is intended to prevent the process from becoming bogged down by evidence that goes to the merits.

There is no pre-certification oral discovery. Generally, the only examination that may be permitted is a cross-examination on filed affidavits which may require leave in some provinces. During cross-examination, parties may be able to require affiants to produce specific documents relevant to certification.

In Quebec, the court may use its discretion to allow appropriate evidence for the hearing, which may include an examination of the representative plaintiff. The defendant must specify the content and objective of the evidence that it seeks. The judge will allow the motion where the evidence is relevant for determining the criteria for authorising the class action.


What rules and standards govern non-disclosure of documents on the grounds of professional privilege, litigation privilege or other confidentiality considerations?

The normal Canadian principles of privilege apply to class proceedings. All Canadian jurisdictions recognise both solicitor-client privilege and litigation privilege.

Solicitor-client privilege attaches to communications between lawyers and clients made for the purpose of giving or receiving legal advice.

Litigation privilege generally applies to documents created for the dominant purpose of actual or anticipated litigation, and the privilege terminates with the conclusion of litigation. The scope of litigation privilege varies from province to province.

Canadian law attaches a privilege to without prejudice communications aimed at possible settlement of the case.

Evidence filing

What is the procedure for filing evidence with the court?

Outside Quebec Normally, the plaintiff will file a motion record in support of certification which will set out the proposed class definition and the common issues, together with other applicable requests, including the appointment of a class representative and approval of a notice plan for the certification.

The respondent is entitled to file affidavit evidence in opposition to the certification motion.

Following the exchange of affidavits and the completion of cross-examinations – which, in some provinces, require leave of the court – each party will file written argument with the court.

Quebec The representative plaintiff is not required to file an affidavit in support of the application for the authorisation of a class action.

The application for authorisation:

  • states the facts giving rise to the proceeding;
  • specifies the nature of the litigation for which authorisation is sought; and
  • describes the group that the plaintiff proposes to represent.

The facts alleged are deemed to be prima facie true. The representative plaintiff bears only the lower burden of demonstration.

The defendant does not have the right to file a formal, written contestation of the motion, as it can only be opposed orally. However, the judge may allow some evidence to be submitted, as noted above.


What rules and standards apply to the submission of factual and expert witness testimony? What is the general value of this testimony? In what circumstances will the court order witness examination?

In the common law provinces, evidence is required to satisfy the certification criteria. Such evidence is generally presented in the form of affidavits and primarily addresses:

  • the identity of the proposed representative plaintiff;
  • the nature and scope of the proposed class; and
  • the viability of the common issues.

Defendants may also file evidence to demonstrate the availability of preferable alternative procedures for the proposed class members to advance their claims.

In Quebec, the parties can file evidence on the authorisation motion only with leave of the court.

Most evidence on certification motions will be factual in nature, in the form of affidavits from the parties. Expert evidence is commonly filed to demonstrate that damages can be calculated on an aggregate basis. Canadian courts have held that the plaintiff bears the onus of proving that a methodology exists for doing so, without the need for proof by individual class members. Courts apply the normal Canadian rules for the admission of expert evidence, which must satisfy the court that the evidence is:

  • relevant;
  • necessary to assist the trier of fact;
  • not inadmissible due to any exclusionary rule; and
  • presented by a properly qualified independent expert.

The submission of factual and expert witness testimony is governed by the rules of procedure applicable in each province or territory. Courts are granted wide discretion to hear viva voce evidence, and there are procedural mechanisms for parties to take evidence out of court from a non-party, which is rarely used on class certification or authorisation motions.


Declaratory relief

How and in what circumstances can declaratory relief be sought?

There are no special rules that govern the availability of declaratory relief in class proceedings. Superior courts in all provinces have the power to grant declaratory relief. The Federal Court has been given this power by statute. Canadian courts are generally reluctant to grant declaratory relief where it will not have practical consequences.

Interim relief

How and in what circumstances can interim relief be sought?

Interim awards or injunctive relief may be sought as part of a class proceeding. Other than timing, the availability of such relief is no different in class proceedings than in other litigation. Canadian courts have expressed the view that the certification motion should be the first step in most class proceedings.


How are damages calculated, recovered and distributed in class/collective actions? Are there any caps on damages?

The method by which damages are calculated in a class action is no different than in an individual claim, except that class actions legislation in all Canadian jurisdictions provides for the use of statistical evidence and the awarding of aggregate damages in appropriate cases.

Damages in tort are intended to place claimants in the position that they would have occupied but for the alleged wrongdoing. Damages in contract are intended to place claimants in the position that they would have occupied had the contract been performed. Claimants may also seek damages for specific pecuniary losses sustained (ie, special damages), as well as losses expected to be sustained in the future. Claimants also assert equitable claims, such as unjust enrichment or waiver of tort. Remedies for those claims may be based on the wrongful benefit obtained by the defendant (eg, the disgorgement of profits).

In addition, various statutes provide for both compensatory and non-compensatory damages.

Non-pecuniary damages at common law are capped at approximately C$375,000 subject to inflation, for catastrophic claims. Apart from specific limits on damages in accordance with statutes, there are no other caps on damages in a class action in Canada.

Are punitive damages available?

Claims for punitive damages, aggravated damages and moral damages (in Quebec) are commonly sought in class actions. Punitive damages are available if the court finds the defendant’s conduct to be sufficiently reprehensible. Such awards in Canada, other than in Quebec, tend to be modest. Common law courts have generally refused to certify class actions where punitive damages are the only relief sought on a class-wide basis.

Quebec courts have been generous in awarding punitive damages in class action proceedings. Therefore, punitive damages have become a significant component of damages claims and awards in Quebec, especially in consumer cases. Under Quebec civil law, punitive damages are not a common law penalty but a measure provided for in the Civil Code of Quebec and are available if they are authorised by an enabling statute. They must not exceed what is sufficient to fulfil their preventative purpose.

Other relief

What other forms of relief are available?

Plaintiffs in class actions frequently seek damages calculated on an aggregate basis. The statutes permit the courts to address the assessment of damages by the use of statistical evidence and aggregate assessments.

An aggregate assessment may be certified as a common issue only where:

  • resolving the other certifiable common issues could be determinative of liability (including specific causation); and
  • the quantum of damages could reasonably be calculated without proof by individual class members.



What mechanisms and strategies are available to and commonly used by defendants in class/collective action suits?

Defendants to class actions can avail themselves of a broad array of strategies, depending on a number of factors, including:

  • the nature of the case;
  • the identity of the plaintiffs;
  • the defendants’ assessment of the merits of the case and their appetite for litigation;
  • the defendants’ business and strategic goals; and
  • public relations considerations.

Commonly used strategies include the following:

  • Jurisdictional challenges – defendants may argue that:
    • the claims are subject to arbitration clauses;
    • the court lacks jurisdiction simpliciter over the parties or the subject-matter of the claims; or
    • another jurisdiction would be a more appropriate forum for the claims.
  • Stay motions – defendants may seek to stay a class proceeding, either temporarily or permanently.
  • Filing of a defence – in most jurisdictions, there is no rule requiring defendants to plead in response to a class action before certification. Defendants will need to decide whether doing so is strategically advantageous.
  • Pleadings or summary judgment motions – depending on the jurisdiction, it may be possible for defendants to bring a motion, either before or at the certification hearing, to have the claim dismissed on its merits, either on purely legal grounds or by demonstrating that the claim is not factually supported.
  • Security for costs – defendants may be able to require representative plaintiffs to post security to provide for the payment of any adverse costs that may be awarded against the plaintiffs at a later date.
  • Attempts at pre-certification settlement – defendants may attempt to avoid a class action by settling, either with the representative plaintiffs or a broader group, before certification or implement their own claims processes to compensate prospective class members, in order to lay the foundation for arguing that a class action is unnecessary to achieve access to justice.

Joint defence agreements

What rules and standards govern joint defence agreements? What are the benefits and drawbacks of these agreements?

A joint defence agreement will allow parties and their counsel to share confidential information without losing otherwise applicable solicitor-client or litigation privilege if the information is shared in furtherance of common defence interests.

The benefits of such agreements include:

  • advantages from shared development of legal or factual defences and strategic approaches; and
  • efficient allocation of tasks to avoid the duplication of efforts and reduce expenses.

Entering into a joint defence agreement may limit the freedom of action of both client and counsel, to the extent that duties arise to the wider defence group and may present risks of future disqualification of counsel should adversity of interests arise in the proceeding or related litigation. These disadvantages can be managed by the inclusion of appropriate provisions.


Cost burden

Who bears the costs of proceedings? Can this burden be shifted in any way?

The rules regarding costs are specific to the legislation and rules of practice in each province.

In Ontario, the loser-pays system of costs applies to class proceedings. However, the court may also examine whether the case was a test case or involved a novel point of law or a matter of public interest, in exercising its discretion to depart from the normal rules as to costs. Court rules provide that the obligation to pay costs may be reduced or reversed if a party has made a settlement offer and subsequently obtains a result equal to, or better than, the basis on which the party was prepared to settle the motion or trial. Ultimately, costs are determined at the discretion of the court. British Columbia, Newfoundland, Manitoba and the Federal Court have adopted a no-costs approach to class actions in relation to the certification application, the common issues trial or any appeals. Costs will apply in relation to appeals to the Supreme Court of Canada pursuant to its rules.

Quebec applies a loser-pays rule; however, its tariff of costs payable in a class action is vastly reduced. A similar approach applies in Saskatchewan, Alberta, New Brunswick, Nova Scotia and the territories, but costs awards are generally far more modest than in Ontario.


How are costs calculated? What level of costs is typically recovered? Would you consider the costs regime in your jurisdiction to be more claimant or defendant friendly?

The quantum of costs awards varies from province to province.

In Ontario, successful parties typically receive a costs award that includes all reasonable disbursements that were necessary for the relevant step in the proceeding, together with their costs on a partial indemnity basis, which generally amounts to between 30% and 60% of the actual legal fees that the party paid to its lawyers. In certain cases, a court may award costs on a substantial indemnity basis (usually about 60% to 80% of the fees actually incurred) or very rarely, a full indemnity basis (100% of the fees actually incurred). The quantum of costs is always at the discretion of the court.

As noted above, costs awards in Quebec, Saskatchewan, Alberta, New Brunswick, Nova Scotia and the territories are generally more moderate than in Ontario. British Columbia, Newfoundland, Manitoba and the Federal Court apply a no-costs approach to class actions, subject to limited exceptions.

Attorneys’ fees

What rules and restrictions (if any) govern attorneys’ fees? Are contingency fee agreements allowed?

In the common law provinces, the retainer agreement between class counsel and the representative plaintiff must be in writing and must address:

  • the terms on which payment will be made;
  • the estimated fee; and
  • the basis on which the fee will be paid.

Alberta also specifically requires that contingency fee arrangements be witnessed and formally served on the representative plaintiff within 10 days.

Contingency fees are generally permitted in all Canadian jurisdictions. Ontario’s legislation expressly authorises the use of a contingency fee in class actions. The retainer agreement between class counsel and the representative plaintiff (including the nature and quantum of class counsel fees) ultimately requires court approval.

Contingency fee agreements are also the norm in Quebec, subject to court approval.

Litigation funding

Third-party funding

Is third-party litigation funding allowed in your jurisdiction? If so, how common is its use?

Third-party funding of class actions has been permitted in Canada and is subject to approval by the courts. These funding arrangements have on occasion been invalidated on the basis of public policy, in relation to the terms of a particular funding agreement. Courts have generally held that third-party funding agreements should be approved where they are in the best interests of the class.

Public funding

Is legal aid or any other form of public funding allowed for class/collective actions?

In addition to funding by private entities, in Quebec and Ontario there are public sources of funding available to representative plaintiffs. In Ontario, the Class Proceedings Fund was created to assist representative plaintiffs in financing disbursements and to pay any costs awarded against them. In Quebec, a public fund named the Fund for Collective Action was created to assist with the funding of:

  • legal fees;
  • expert fees;
  • the costs of notice; and
  • other expenses necessary for the bringing of action.

Both funds are accessible through an application process. Where funding is provided, both funds are subrogated to the amount of their funding and are entitled to a percentage of the award or settlement.


Is after-the-event (ATE) or similar insurance available in your jurisdiction? If so, how common is its use?

Third-party litigation funding arrangements, including ATE insurance, are growing in use across Canada, including in class action litigation.



What rules, restrictions and procedures govern settlements of class/collective action suits?

All settlements of class actions in Canada must be approved by the court or courts in which the class action has been brought. The plaintiff must prepare a plan of notice to be given to the class describing the settlement and stating:

  • the date and location of the hearing to approve the settlement;
  • the procedure and time for delivery of objections; and
  • the right to attend in person at the hearing, regardless of whether it is the intention of the class member to object to the settlement.

The notice plan must be approved by the court or courts before which the settlement hearings will take place.

The party seeking approval of the settlement must prepare a motion, supported by evidence, to seek approval of the settlement and file evidence in support. At the hearing, the moving party must demonstrate to the court that the settlement is fair, reasonable and in the best interest of the class. The court can choose only whether to approve the settlement.

An order approving the settlement will address:

  • the acceptance of the settlement agreement;
  • the appointment of any third parties necessary to administer or adjudicate claims; and
  • any further requirements for notice of the approval of the settlement to be given to class members.

The court must approve the payment of any fees that are to be paid to class counsel.

Once approved, settlement agreements will almost always include comprehensive releases precluding further proceedings.

In some cases, some or all of the settlement funds may be paid out by way of a cy-près distribution to one or more non-profit organisations.

Class member objections

How are class member objections to settlements handled?

Objectors may appear in person at the settlement approval hearing and argue why they oppose the settlement. Often, objectors will provide written objections to class counsel, who provide them to the court.

Separate settlements

How are separate settlements handled?

In Canada, partial settlements of class actions are possible. A settlement can apply to only:

  • part of a class;
  • one or more of several defendants; or
  • some of the claims advanced in the pleading.

Subject to court approval, the parties may agree to settle the claims of only some class members, provided that there is a reasonable basis for the differential treatment of those class members.

It is common for plaintiffs to settle with different defendants in the same proceeding at different times, and to use the resulting fees to fund the continued litigation against the other defendants. Settling defendants may agree to cooperate with class counsel by providing relevant documents and/or access to potential witnesses.

While less common, it is also possible to settle some of the claims advanced in a class proceeding, while leaving other claims to continue through litigation. Provided that settlements are fair and reasonable and in the best interests of the class, there are no legal prohibitions on such settlements.

Alternative dispute resolution

Availability and prevalence

Is alternative dispute resolution (ADR) available for class/collective action suits? If so, which ADR forms are commonly used?

The parties may voluntarily use all forms of ADR. While the parties may agree to arbitration of a certified class action, any final resolution may remain subject to court approval. The most common form of ADR used is to appoint one or more former judges or lawyers to act as arbitrators, with the procedure for the arbitration and any appeals governed by provincial or federal arbitration statutes.

Court-ordered mediation

Does the court customarily order pre-trial mediation in relation to class/collective action suits?

Mediation of class actions is not mandatory in any Canadian jurisdiction.

Class-action waivers

Are class-action waivers in arbitration agreements allowed?

The Supreme Court of Canada has affirmed that arbitration clauses should be enforced in the absence of legislative direction to the contrary and has repeatedly called for judicial deference to be shown to arbitrators to determine their own jurisdiction. Each unique arbitration clause and class-action waiver will be interpreted as against any applicable statutes, with the understanding that the courts will allow freedom of contract to prevail over the procedural right to class actions. The enforcement of an arbitration clause is unlikely when class proceedings are brought under provincial consumer legislation that expressly prohibits such clauses (eg, in Ontario, Quebec and Alberta) or where legislation creates a right to commence a court action for relief in respect of conduct regulated by the statute.