On December 3, 2012 the Québec Court of Appeal rendered
its decision in the case of Schmidt v. Johnson & Johnson
Inc. 2012 QCCA 2132
("Schmidt"), in which it
formally nuanced Québec's so-called
"first-to-file" rule under which the first lawyer to file
a class action alleging a given cause of action against a defendant
would receive carriage of the matter over all similar class actions
filed subsequently. This rule had arisen in order to efficiently
deal with competing class actions filed by different plaintiff law
firms, a common occurrence in highly publicized cases. In many
other Canadian provinces, the issue of competing class actions is
dealt with by carriage motions, where the competing law firms
battle for carriage of the file by convincing a court that they are
the most competent and experienced, and that their proceedings are
the most comprehensive and clearest formulation of all the
potential claims on behalf of the class.
Mr. Justice Dalphond, writing for the Court of Appeal in
Schmidt, acknowledged the efficiency of the first-to-file
rule, while recognizing its disadvantages, insofar as the rule
often creates a stampede of plaintiff's counsel to the
courthouse in high-profile cases, and may result in ill-considered
or poorly-drafted proceedings whose only merit is that they are the
first to arrive at the courthouse door, at the expense of the class
members they purport to represent. Choosing a middle path between
the starkness of the first-to-file rule and the sometimes
inefficient and unseemly battles between competing plaintiff's
counsel in carriage motions, Dalphond J. in Schmidt
institutes a more flexible rule to deal with competing class
actions, as follows:
the first motion to be filed with the clerk of the court is, in
principle, the one that will be heard in priority;
subsequent class actions will be stayed and will be heard, in
the order they were filed, only if the preceding class action is
the priority of the first class action filed may be challenged
by the attorneys responsible for any subsequent class actions
the party challenging the priority of a previously filed class
action has the burden of establishing that the prior class action
is not in the best interests of the putative members, but rather
constitutes an abuse of the first-to-file rule such that the
subsequent action should proceed instead.
In order to avoid the harsh, personalized rhetoric that
sometimes accompanies the contest between counsel competing for the
mandate to represent the proposed class during carriage motions,
Mr. Justice Dalphond proposes that the matter be decided solely on
the basis of the written proceedings filed by each plaintiffs'
counsel firm, and not on the relative personal merits or experience
of the individual attorneys involved.
It is difficult to predict what the outcome of the decision in
Schmidt will be on future class action proceedings. One
question raised by Schmidt, but left unresolved, is how
amendments to class proceedings will be dealt with where one party
seeks to amend to "improve" their class action prior to a
carriage challenge from a subsequently-filed competing class action
that is more comprehensively researched and better drafted. One
thing appears certain, however: by nuancing the former bright-line
test of the first-to-file rule, practitioners in Québec can
expect to see more contested motions for carriage of class action
mandates between putative counsel for the plaintiff class. On the
other hand, this process is likely to produce higher quality
written proceedings by plaintiffs, and possibly, better class
action counsel backing them up.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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