As a second installment to this blog’s series on the changes, or lack thereof, brought about by the new Code of Civil Procedure (“CCP”) to the class action landscape in Québec (to see Part 1 on the new rules of recognition of Multijurisdictional Class Actions, click here), this post will consider the changes made at article 571 of the new CPC to the definition of class action members and class action representatives.
“50 employees or less” rule no longer applies
When it was adopted in 1978, article 999 of the CCP provided that only natural persons could be members of a group. Legal persons were deemed to be better equipped to face lawsuits alone.
This position was tempered in 2002 by allowing legal persons established for a private interest, partnerships and associations with no more than 50 employees during the 12-month period preceding the motion for authorization to be class members, provided they were dealing at arm’s length with the representative of the group. This was done particularly in light of the fact that the province of Québec was the only jurisdiction in North America to limit class action proceedings to natural persons.
The new CCP now allows at article 571 all legal persons established for a private interest, partnerships and associations to be class members – irrespective of the number of their employees or their relationship with the representative. Public corporations such as cities, school boards or hospitals are still barred from being class members.
Since Québec is an “opt-out” regime, once a class action is authorized, such legal entities that meet the definition of class members but do not want to be part of it will have to opt-out of the class (art. 580 of the new CCP, 1007-1008 of the current CCP) if they don’t want to be automatically deemed “in”.
The Young Bar Association of Montréal suggested in its mémoire that since Québec law does not have a “preferable procedure” criterion, similar to that of most common law provinces, this harmonization could be problematic. The Young Bar expressed concern that private corporations would be able to overuse or misuse class action proceedings and would only be limited by the usual criteria of authorization (575 of the new CCP, 1003 of the current CCP).
Legal persons as representatives
Article 571 of the new CCP also provides that legal persons can be the representative or petitioner of a class without being as such a class member. The relevant section of article 571 provides:
A legal person established for a private interest, a partnership or an association or another group not endowed with juridical personality may, even without being a member of a class, ask to represent the class if the director, partner or member designated by that entity is a member of the class on behalf of which the entity is seeking to institute a class action, and the designee’s interest is related to the purposes for which the entity was constituted.
The criteria set forth by article 571 of the new CCP are the same as those of article 1048 of the current CCP. The new article now provides explicitly that the representative does not have to be a member of the class, which was already interpreted this way, with consumer advocate groups such as Option Consommateur regularly appearing as representatives with a designated class member.