Canada: Three Quebec Court Of Appeal Justices Reiterate That A Low Threshold Is To Be Applied At The Authorization Stage; One Calls For The Legislature To Rethink The Entire Authorization Process

In Charles v. Boiron Canada inc., 2016 QCCA 1716, the Quebec Court of Appeal (Justices Bich, Savard and Levesque) again overturned a refusal by the Quebec Superior Court to authorize a class action in a consumer law matter. In brief concurring reasons, Justice Bich wonders whether the authorization process still has any real utility and calls for help from the legislature, in light of recent Supreme Court of Canada precedents.

Background

The case involves a homeopathic product called "Oscillococcinum" (and a version for children called "Oscillo") marketed as reducing cold symptoms. Although the product is made with 85% sucrose and 15% lactose, studies filed by the respondent manufacturer with Health Canada (which approved the sale of the product) support the positive effects of the product as marketed by the manufacturer. Based on these studies, the Superior Court authorization judge found that the Petitioner could not demonstrate a "prima facie" case of misrepresentation, even if the Petitioner had filed an expert opinion contradicting the studies filed with Health Canada. The Quebec Superior Court ("QCSC") also concluded that the Petitioner had not demonstrated that she was in a position to represent the class members adequately, noting that basically all the Petitioner had done was to read an article on the internet, consult a lawyer and let the latter manage the case from there on, without communicating with the Respondent to complain or ask questions. Accordingly, the QCSC dismissed the putative class action.

The Decision of the Quebec Court of Appeal ("QCCA")

The QCCA held that the authorization judge went too far in analyzing the merits of the case at the authorization stage. The QCCA concluded inter alia that the authorization judge should not have weighed the evidence filed on both sides at the authorization stage and should not have assumed that the approval process with Health Canada was reliable. The QCCA once again reiterated that a low threshold was to be applied at the authorization stage.

The decision is particularly noteworthy for the concurring reasons of Justice Bich, which some have interpreted as a cry for help from the Quebec legislature concerning the authorization process.

Justice Bich writes that the Supreme Court of Canada ("SCC") has recently imposed such a lax test for authorization that one may wonder whether the "filtration mechanism" still has any utility other than to deal with class definitions, common questions, notices and other more technical issues. (para. 70) Justice Bich questions whether such a low threshold justifies that the Court and the parties dedicate such considerable efforts and resources to debating it. (para. 71) She mentions that the class action procedure has been in place in Quebec for four decades now and wonders whether there is still a need for "a locked entry door which must be unlocked on a case by case basis in this way"; "If the goal is to weed out manifestly ill-founded claims, would not it be easier to deal with those with the tools already available in the Code [of Civil Procedure], i.e. motions to dismiss and sanctions for abuse?" (para. 71; our translation) Justice Bich also questions the purpose of the new right to appeal judgments granting authorization provided by the new Code of Civil Procedure, characterizing the legislature's reasons for expanding the right of appeal as "elusive". (para. 72) In Justice Bich's view, class actions are meant to facilitate access to justice and, in its current form, the authorization process appears to hinder such access to justice. (para. 73) Accordingly, she considers that it is time for the legislator to review the entire authorization process. (para. 74)

Our Comments

Despite Justice Bich's critique of the authorization process, it is important to note that the QCCA did not in any way alter the applicable criteria of a "prima facie" case. The "filtration mechanism" remains one of the key features of the Quebec's class actions regime.

As Justice Bich herself recognizes, instead of simply setting aside the authorization process, another possible solution could be for the legislature to actually reinforce it, which would enable authorization judges to more efficiently dismiss claims that are doomed to failure:

"[74] Some will retort that if things have turned out this way, it is because the legislative provisions, which are based on theoretically solid foundations, are poorly understood or poorly applied. This is possible, I admit, but saying so resolves nothing.  For my part, I would be inclined to say that if the practice, after 38 years, has not been able to give life to the theory, it is because the theory is flawed or outdated, or because the model that claims to incarnate it needs to be not just patched up or touched up, but completely renovated.  I allude above to the possibility of eliminating the authorization process or, perhaps better, that it be integrated into the action [on the merits] itself, but others, with whom one may just as easily agree, suggest rather that it should be reinforced, to give it the teeth that we have denied it so far. In any event, it is time for the legislator to consider the issue and it was frankly surprising that the matter was not on the agenda for the most recent reform of the Code of Civil Procedure." (our emphasis, our translation)

It remains to be seen whether the legislature will react to Justice Bich's comments, particularly considering the fact that the entire Code of Civil Procedure was very recently revised and that the legislature appears to some to have given more weight to the authorization process by providing for a new right to appeal authorization judgments. In the circumstances, another possible solution would be for the SCC to revisit or nuance some of its recent decisions regarding the threshold to be applied at the authorization stage in Quebec. By doing so, the SCC could address several of the issues regarding the authorization process on which Justice Bich commented in her concurring reasons.

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