5 April 2024

Class Actions Comparative Guide

Norton Rose Fulbright Canada LLP


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1 Legal framework

1.1 Is there a dedicated class action regime in your jurisdiction? If not, how is collective action typically brought?

All 10 Canadian provinces – Quebec, Ontario, British Columbia, Alberta, Manitoba, Saskatchewan, Nova Scotia, New Brunswick, Prince Edward Island and Newfoundland and Labrador – have dedicated class action legislation. The Federal Court of Canada also has a dedicated class action regime for cases under its jurisdiction. The three Canadian territories – Nunavut, the Northwest Territories and the Yukon – do not have dedicated class actions legislation. However, class actions are permitted in the territories at common law in accordance with the Supreme Court of Canada's 2001 decision in Dutton, which effectively authorised class proceedings in all Canadian jurisdictions regardless of whether dedicated class action legislation exists.

1.2 Do any special regimes apply in specific sectors?

The statutory and common law class action regimes in Canada are procedural frameworks that apply to class actions regardless of the sector or industry at issue. Although industry-specific legislation can affect the substance, process and strategies for prosecuting and defending class actions in Canada, there are no special class action regimes that apply only to specific sectors. Securities legislation across Canada provides for statutory rights of action – notably for primary or secondary market representation – which can be advanced in the context of a class action. In that context, securities legislation set out additional procedural requirements, such as obtaining leave from the Court in addition to certification of the class action. Provincial consumer protection legislation also contains provisions which render a class action waiver in a consumer contract unenforceable against the consumer.

1.3 Are the courts in your jurisdiction generally considered sympathetic to class actions?

Canadian courts generally consider the value that a class action brings as a procedural vehicle in an appropriate case and therefore may be sympathetic to some class action litigants, but are nonetheless bound to enforce rules of evidence and apply legal tests rigorously. Appeal courts across Canada, including the Supreme Court of Canada, have repeatedly held that class actions serve important social and legal purposes, including:

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

2 Parties

2.1 Who has standing to bring a class action in your jurisdiction?

In Canada, class actions are procedural vehicles and do not give rise to substantive rights or causes of action. As a result, a person must have a pre-existing legal claim against a defendant in order to have standing to bring a class action. The case law regarding standing to bring a class action in Canada has primarily focused on whether, in a class action against multiple defendants, a proposed representative plaintiff must have a claim against each named defendant. The answer to that question varies from province to province. In Ontario, a representative plaintiff must have a cause of action against each named defendant or, if a plaintiff has a cause of action against one defendant but no cause of action against a co-defendant, there must be another plaintiff available with a cause of action against the co-defendant who would qualify to be a representative plaintiff. In contrast, in British Columbia, Alberta, Saskatchewan and Manitoba, the legislation expressly permits a representative plaintiff who is not a member of the class. Similarly, in Quebec, a representative plaintiff need not have a direct cause of action against or a legal relationship with each defendant, provided that it has ‘sufficient interest' in the action, as is required of all plaintiffs filing proceedings in Quebec in accordance with the general provisions of the Quebec Code of Civil Procedure.

2.2 Can representative bodies bring class actions in your jurisdiction? If so, which bodies may do so and what is the applicable procedure?

Yes, all provinces, except Ontario, expressly permit representative bodies to bring class proceedings if a ‘substantial injustice' would result to the class if the representative body were denied representative status. Ontario's Class Proceedings Act does not directly address the issue of class representation by a representative body, but the common law requirement in Ontario that a plaintiff have a cause of action against each named defendant would appear to prevent purely representative bodies from bringing class actions. In Quebec, the issue of representative bodies instituting class actions is expressly addressed in Article 571 of the Code of Civil Procedure, which permits associations and other groups without legal personality to represent a class as long as:

  • one of its members, the designee, is a member of the class; and
  • the designee's interest is related to the purpose for which the body was constituted.

Despite the ability for representative bodies to bring class actions in most provinces, the vast majority of class actions in Canada are brought by individuals or corporations that are members of the class and have a direct interest in the claim.

2.3 Can parties outside the jurisdiction be members of a class action? What requirements and restrictions apply in this regard?

Yes, non-residents of Canada may be members of a class action. A court's decision to assume jurisdiction over non-resident class members will depend on fact-specific considerations relating to the nature of the class action being brought. In Ontario, for example, courts have held that there are two key issues to consider with respect to non-resident class members:

  • whether the court has jurisdiction over all or some of the defendants in the action; and
  • whether the court should extend its jurisdiction to adjudicate on the claims of class members outside the jurisdiction that do not opt-out of the class action.

In Quebec, national class actions have been judicially approved. The court will consider whether it has jurisdiction over the action, applying the conflict of law rules it applies to all proceedings. For instance, if the defendant has its domicile or residence in Quebec, this will generally be sufficient to establish the court's jurisdiction over a national class. With regard to a class comprised of residents outside of Canada (ie, an international class), Quebec courts have adopted a more stringent approach. The court will also consider:

  • whether the territorial scope of the group is useful and justified by the plaintiff; and
  • whether it respects the principal of proportionality, including by considering the potential complexity of applying the laws of multiple jurisdictions.

2.4 Which parties may be the target of a class action? Can parties outside the jurisdiction be the target of a class action? What requirements and restrictions apply in this regard?

There are no restrictions on the parties against which a class action may be brought. However, the mere fact that an action is a proposed class action does not change the normal conflict of laws requirement that a court must have jurisdiction over an action. Under the common law test for jurisdiction simpliciter, a provincial superior court may assume jurisdiction litigation if there is a ‘real and substantial connection' between the subject matter of the litigation and the province in question. Presumptive indications of a real and substantial connection include an alleged tort being committed in the jurisdiction. As a result, parties outside of Canada can be the targets of a class action provided that the court in which the class action is brought has jurisdiction over that defendant. Quebec courts will also apply the Civil Code of Quebec's general conflict of law rules to determine whether they have jurisdiction over the defendants of a class action. Various factors can serve to establish the jurisdiction of Quebec courts, such as the fault having been committed in Quebec or an injury having been suffered in Quebec. The Federal Court has more limited subject-matter jurisdiction than the provincial superior courts.

2.5 Do class actions proceed on an opt-in or opt-out basis?

Some Canadian provinces are opt-out jurisdictions and some are opt-in. Ontario, Quebec British Columbia, Manitoba, Nova Scotia, Prince Edward Island, Saskatchewan, Alberta and the Federal Court follow an opt-out model. In New Brunswick and Newfoundland and Labrador, class members resident in the province may elect to opt out; but when the class certified includes non-resident members, those persons must specifically opt in to the action.

3 Forum

3.1 In what forum(s) are class actions heard in your jurisdiction?

Class actions are heard in the superior court of each province and territory, and in the Federal Court. The superior courts are courts of inherent jurisdiction established under Section 96 of Canada's Constitution Act, 1867. The Federal Court is a national superior court established under Section 101 of Canada's Constitution Act, 1867. The Federal Court's jurisdiction is generally limited to claims involving federal law and claims against federal government entities.

3.2 Who hears class actions in your jurisdiction (eg, judges or juries)?

Class actions are managed by judges who will preside over the procedural aspects of the class action. In Quebec, all civil proceedings, including class actions, are tried by judges alone. In the other provinces, there is no express prohibition against class actions by jury where a jury is otherwise available for a civil trial. That said, jury tries are rare in civil proceedings. In Ontario and Quebec, class actions are typically case managed by specialist judges with experience conducting class proceedings. Whether the judge who hears the certification motion is the trial judge varies by province.

3.3 Is there any opportunity for class action forum shopping in your jurisdiction? If so, what are the implications?

Class counsel will often forum shop, in that they may file a class action in one or more provinces which have a jurisdictional connection to the claim. The residency requirements for the representative plaintiff will vary. The implications of such a choice include:

  • the relevant rules governing the class action (which vary by province);
  • the certification requirements;
  • the threshold for authorisation (which is generally perceived as being lower in Quebec);
  • whether evidence is admissible as of right on certification (it is not in Quebec); and
  • the necessity of having a representative plaintiff for each defendant (required in Ontario).

A proposed class action may be dismissed if a court finds that it lacks jurisdiction over the subject matter of the litigation and courts have frowned on class actions which are filed in jurisdictions solely to park a claim.

4 Bringing a class action

4.1 What is the limitation period for bringing a class action in your jurisdiction? What requirements and restrictions apply in this regard?

There is no limitation period for bringing a class action. Rather, each class member, including the proposed representative plaintiff, will have a designated time period to pursue his or her individual claims against the defendant before it is barred by a limitation period. Limitation periods vary by province and by cause of action. In Ontario, the basic limitation period for a civil claim is two years from the date of discovery of that claim. In Quebec, the limitation period for an action to enforce a personal right or a movable real right is three years from the day on which the plaintiff's right of action arises, unless otherwise provided. The commencement of a class action will suspend the running of limitation periods in favour of class members until the dismissal, certification or decertification of the class action.

4.2 Do collective actions require certification? If so, what requirements must be met to obtain certification?

Yes, class actions in Canada require certification. In all provinces with dedicated class action regimes, except Quebec, a representative plaintiff must satisfy the following requirements to obtain certification:

  • The pleadings must disclose a cause of action;
  • There must be an identifiable class;
  • There must be common issues;
  • The class action must be the preferable procedure; and
  • The proposed representative must be suitable.

In Quebec, the Superior Court must determine whether the criteria set out in Article 575 of the Code of Civil Procedure are met – that is, whether:

  • the claims of the members of the class raise identical, similar or related issues of law or fact;
  • the facts alleged appear to justify the conclusions sought;
  • the composition of the class makes it difficult or impracticable to apply the rules for mandates to take part in judicial proceedings on behalf of others or for consolidation of proceedings; and
  • the class member appointed as representative plaintiff is in a position to properly represent the class members.

In the territories, a four-part test derived from the Supreme Court of Canada's decision in Dutton will be applied. Specifically, a proposed representative plaintiff must satisfy the following criteria:

  • The members of the proposed class must be clearly defined and able to be identified;
  • There must be issues of fact or law common to all members of the class;
  • If one class member is successful, then all class members must be successful; and
  • The representative plaintiff must be able "vigorously and capably" to represent the entire class.

4.3 What are the formal requirements for bringing a class action?

A person who wants to bring a class action must comply with all formal pleading and standing requirements of the court in which the claim is commenced. In addition, a person must obtain certification from the court.

4.4 What are the procedural and substantive requirements for bringing a class action? Do any minimum thresholds apply in this regard?

A motion or application for certification – or ‘authorisation' in Quebec – is a procedural requirement for proceeding with a class action in all Canadian jurisdictions. In the common law provinces, a plaintiff must establish ‘some basis in fact' for each requirement of the certification test, with the exception of the cause of action requirement, which only considers whether the pleadings disclose an alleged cause of action. In recent years, the threshold for certification in Ontario has become more stringent with amendments to the class proceedings legislation. For example, persons that commence class actions in Ontario must now satisfy the court on certification that:

  • a class action is superior to reasonably available alternative means of determining entitlement of class members to relief; and
  • questions of fact or law common to the class members predominate over any questions affecting only individual class members.

In contrast, in Quebec, the threshold for authorisation remains low, in that:

  • there is no requirement to demonstrate that a class action is a preferable vehicle to bring the claim; and
  • evidence is generally not required to support the allegations in the pleading.

4.5 How are potential class members notified of the proceedings? Is there a deadline by which they must join the class action?

If certification is granted, the representative plaintiff will generally provide notice to class members in a form approved by the court. A court order approving the plaintiff's proposed notice will typically include a detailed directions for notifying class members. The precise manner and method of notice depend on the case and remains within the discretion of the certification judge. A court will consider a variety of factors when approving a plan to give notice to class members, including:

  • cost;
  • the size of the class; and
  • the likelihood that a member would seek to opt out of the action.

In the common law provinces, the court may dispense with notice altogether if it is determined that:

  • there is no reason why class members would opt out; or
  • the cost of providing notice would be unreasonably high.

The deadline for opting in or opting out of a class action (as the case may be) will vary depending on the case, but is typically set between 30 and 90 days from the provision of notice to the class members.

4.6 How is jurisdiction over the class action determined?

Generally, a Canadian court will accept jurisdiction if there is a real and substantial connection between the subject matter of the action and the province or territory. In Quebec, the court will examine whether any of the grounds to establish its jurisdiction set forth under Articles 3134 and following of the Civil Code of Quebec are met. The Federal Court, however, has a narrower subject-matter jurisdiction than the provincial superior courts. Specifically, the jurisdiction of the Federal Court is conferred by the Federal Courts Act and approximately 100 other applicable federal statutes. In cases involving parallel class proceedings in other jurisdictions, a Canadian court may, in some cases, stay a class proceeding in a given province based on the doctrine of forum non conveniens. In British Columbia, Alberta, Prince Edward Island, Saskatchewan and Ontario, the applicable class action legislation requires courts, at the certification stage, to consider multi-jurisdictional class actions commenced elsewhere in Canada involving the same or similar subject matter. The courts in these provinces must consider whether it would be preferable for the claims or common issues to be resolved in that other jurisdiction.

4.7 How is the applicable law determined?

The applicable law will depend on typical requirements and conflict of law rules pertaining to civil action in the forum in which the class action is commenced. For example, in Ontario, the test for the applicable law in a tort claim is the lex loci delicti rule, meaning the law of the place where the tort was committed. In Quebec, the rules to determine the applicable law are set forth under Articles 3083 and following of the Civil Code of Quebec.

4.8 Under what circumstances (if any) must security for costs be provided?

Whether security for costs can be ordered varies by province. For example, under the Ontario Class Proceedings Act, a court, on the motion of a party or class member, may make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for that purpose, may impose such terms on the parties as it considers appropriate. This discretion includes the power to order security for costs. However, although the Ontario courts can order plaintiffs to provide security for costs, this rarely happens due to the principle of access to justice, which is one of the underlying objectives of the class actions regime. In British Columbia, courts have no jurisdiction to order security for costs in class actions. In Quebec, courts may order a plaintiff who is not a resident of Quebec or, in the case of corporate entity, which is not headquartered in Quebec to offer security for cost. To our knowledge, such a security has never been requested in the context of a class action.

5 Disclosure and privilege

5.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply?

Prior to certification, starting with the common law provinces, there is generally no obligation on a representative plaintiff or defendant to disclose a complete list of documents relevant to the merits of the case prior to certification. However, documents and information relevant to the test for certification may need to be disclosed and in some provinces affiants must swear to the fact they have provided all material facts relevant to the certification motion. In Quebec, plaintiffs are generally not entitled to obtain document disclosure from defendants at the certification stage. Defendants must obtain permission from the court to file their own evidence at the certification stage; permission will be granted only if the evidence relates to the criteria for certification. Defendants must also obtain permission from the court to examine the representative plaintiff.

After certification, the procedural rules of court of each forum will determine the extent of document disclosure and production. In the common law provinces, the parties will generally be required to produce all relevant documents in their possession, control or power, absent a claim of privilege. In Quebec, document disclosure is made in response to specific requests from the other party, and these requests are typically made prior to and during examinations for discovery.

After certification, the parties have essentially the same rights to discovery as they would in a traditional action, although the representative plaintiff is the only party against which those traditional rights apply. Before the common issues trial, the scope of discovery is generally confined to the common issues certified by the court.

5.2 What rules on third-party disclosure apply in your jurisdiction? Do any exceptions apply?

Generally, leave of the court must be obtained in order to discover third parties or class members beyond the proposed class representative. As it relates to class members, applications for leave typically take place after discovery of the representative has been completed, in order to be able to demonstrate that an additional examination is necessary. There are a number of factors that a court will consider in determining whether discover of third-party class members is warranted, including:

  • the stage of the proceedings; and
  • the value of the individual claims.

The rules regarding third-party disclosure in normal civil actions generally apply in the context of class actions. Typically, a party must seek permission from a court to obtain the production of documents or examination for discovery from a person that is not a party to the action. Canadian courts are generally reluctant to order third-party discovery.

5.3 What rules on privilege apply in your jurisdiction? Do any exceptions apply?

The law of privilege in Canada is nuanced. As a general rule, parties are not required to disclose privileged documents during litigation, including class action litigation. There are many types of privilege – the most well-known being litigation privilege and solicitor-client privilege. Litigation privilege creates a zone of privacy in relation to communications around the defence or prosecution of litigation; and solicitor-client privilege protects from disclosure the direct communications – both oral and written – prepared by a lawyer or client in connection with the provision of legal advice.

5.4 What are the specific implications of the rules on disclosure and privilege in class action proceedings?

In the context of a class action, the determination of when the solicitor-client relationship arises for plaintiffs, and hence the scope of privilege, can be more complex. Generally, no solicitor-client relationship exists between class counsel and potential class members before certification. Once a class action is certified, counsel represent the class and a solicitor-client relationship exists. In Ontario, courts have held that third-party funding agreements for class actions are not privileged documents.

6 Evidence

6.1 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?

Common law provinces and territories: Evidence on the certification motion, where allowed, is usually through affidavit evidence. In some jurisdictions there can be cross-examination of affidavits, which are provided to the court by way of a written transcript.

Evidence is normally tendered orally at the hearing of the common issues trial on the merits, although the parties may agree to adduce evidence by way of affidavit. Summary trials will proceed by way of affidavit evidence in the normal course. Expert evidence is accepted, and frequently relied on, at the certification motion and any hearing of the merits.

Quebec: A plaintiff in Quebec only has to bring prima facia evidence regarding each of the criteria in Article 575 of the Code of Civil Procedure. A defendant can only file evidence at the certification stage with the court's permission. Applications for leave to file evidence at the certification stage are granted in fairly limited circumstances, as Quebec courts have increasingly shown a reluctance to allow debates on substantive factual or legal issues at the certification stage. Such evidence may be allowed when it aims to manifestly contradict the allegations made by the plaintiff.

6.2 What is the applicable standard of proof in your jurisdiction?

At the certification motion, and in the common law provinces, there must be some basis in fact establishing the certification criteria, other than the requirement of a reasonable cause of action being pleaded. In Quebec, the plaintiff must demonstrate that the facts alleged in the motion for certification justify the conclusions sought. The alleged facts are assumed to be true, as long as the allegations of fact are sufficiently precise. Where the allegations are not sufficiently precise, they must be accompanied by some evidence in order to form an arguable case.

At trial, the civil burden applies, which is proof on a balance of probabilities.

6.3 On whom does the burden of proof rest in class action proceedings?

The burden rests on the plaintiff at both the certification motion and at any hearing on the merits, absent legislation which may impact the burden of proof, which is rare.

6.4 What are the specific implications of the rules on evidence in class action proceedings?

The normal rules of evidence apply in class action proceedings post-certification.

At the certification state, in the common law provinces, hearsay is permitted on a certification motion given that it is interlocutory in nature. In Quebec, as mentioned above, the alleged facts in the certification motion are assumed to be true. For experts, the normal rules regarding the admissibility of expert evidence will apply.

7 Settlement

7.1 Can the class action proceedings be discontinued without a full trial? If so, how, and what are the implications?

Yes, in many provinces, a class action can be discontinued without leave prior to certification. In others, leave of the court is required to discontinue even prior to certification. Any discontinuation after certification requires the leave of the court. The court will consider whether the discontinuation is appropriate and whether notice must be provided to the proposed or certified class.

7.2 Is court approval of the settlement required? If so, what factors will the court consider in this regard?

Yes, court approval of a class action settlement is required. The court must find that in all of the circumstances the settlement is fair, reasonable and in the best interests of those affected by it. In the common law provinces, a court will examine:

  • the fairness and reasonableness of the proposed settlement; and
  • whether it is in the best interests of the class as a whole having regard to the claims and defences in the litigation and any objections raised to the settlement.

In doing so, the court will consider a number of factors, including:

  • the likelihood of recovery or likelihood of success;
  • the amount and nature of discovery, evidence or investigation;
  • the settlement terms and conditions;
  • the recommendations and experience of counsel;
  • future expenses and the likely duration of litigation and risk;
  • the recommendations of neutral parties, if any;
  • the number of objectors and the nature of the objections;
  • the presence of good-faith, arm's-length bargaining and the absence of collusion;
  • the degree and nature of communications by counsel and the representative parties with class members during the litigation; and
  • information conveying to the court the dynamics of and the positions taken by the parties during the negotiation.

The courts have noted that a reasonable and fair settlement is inherently a compromise and need not be perfect from the perspective of the aspirations of the parties. That fact that some class members are disappointed or unsatisfied will not disqualify a settlement because the measure of a reasonable and fair settlement is not unanimity or perfection.

8 Court proceedings

8.1 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Court proceedings are public. Information in the court file may be sealed on the application of the parties if certain requirements are met. Often the parties will agree to keep certain aspects of the discovery process confidential. Court hearings may be closed or publication bans issued. This is rare in the class proceedings context.

8.2 What approaches do the courts typically take to class action proceedings? Are preliminary issues commonly tried first, or are test cases commonly heard? What are the implications of these different approaches for the proceedings?

The certification motion is normally heard and determined first. Preliminary motions which will resolve all or certain aspects of the proceeding may be scheduled prior to or at the certification motion, with leave of the court. The timing of such motions is normally dealt with by a case management judge who is appointed to oversee the class action. In Ontario, defendants have a presumptive right to bring certain pre-certification. In addition, there may be motions to determine which class action will proceed if more than one has been filed and it seeks to certify on behalf of the same class.

8.3 How do class action proceedings unfold in your jurisdiction?

The certification motion and preliminary motions will be heard first. If certified, the action will proceed through discovery and often meditation and will then be set down for the common issues trial. The common issues trial will be heard normally before a judge alone, who will render her or his decision on the common issues as certified. Individual issues will then be dealt with in further proceedings – either before the same judge or, with that judge's approval, another decision maker or by way of a more summary process.

8.4 What is the typical timeframe for class action proceedings?

Normally the certification motion will be heard within one year of the action being served. Common issues trials are rare as the vast majority of cases settle prior to trial, and trials will normally not proceed for a number of years after certification. This may vary depending on the province, on the type of proceeding and the availability of the judge. As well, in some circumstances a motion for summary judgment may proceed at an earlier stage than a common issue trial.

8.5 Is the decision issued in class action proceedings binding on all members of the class?

Yes, a decision on the common issues is binding on all members of the class that have not opted out of the class proceeding.

9 Remedies

9.1 What remedies are available in class actions in your jurisdiction?

Monetary awards, declaratory or injunctive relief are frequently sought in class actions.

9.2 Are punitive damages awarded in your jurisdiction?

Yes. However, in recent decisions the courts have deferred certifying claims for punitive damages absent some basis in fact for the claim, with a view to having the certification order amended to allow for punitive damages to be confirmed as a common issue if evidence of conduct warranting punitive damages becomes available. In Quebec, punitive damages are available only when they are expressly contemplated by legislation. For instance, punitive damages can be available for claims made under the Consumer Protection Act and under the Quebec Charter of Human Rights and Freedoms.

9.3 What factors will the courts consider in deciding on the quantum of damages?

Proportionality is a core focus in respect to the permissible quantum of punitive damages. A proper award must look at proportionality in several dimensions, including that the award is proportionate:

  • to the blameworthiness of the defendant's conduct;
  • to the harm or potential harm directed specifically at the plaintiff;
  • to the need for deterrence;
  • after taking into account the other penalties (civil and criminal) which have or are likely to be inflicted for the same conduct; and
  • to the advantage wrongfully gained by a defendant from the misconduct.

General damages in claims for negligence are capped.

9.4 How are damages allocated among the members of the class?

The court may direct distribution of amounts awarded that it considers appropriate. This can include abatement, credit, payment of a lump sum or instalments; and in certain cases, damages can be awarded in the aggregate to the class. A cy-près distribution (ie, payment of settlement funds or damages awards to a charity or other public interest organisation) may also be permitted where it is not economically feasible to distribute an award to individual class members.

10 Appeals

10.1 Can the court's decision in the class action be appealed? If so, on what grounds and what is the process for doing so?


In the common law provinces, with some exceptions, decisions on certification and the merits can be appealed as of right. In Quebec, a judgment denying authorisation can be appealed as of right by the applicant; but a judgment authorising a class action can only be appealed with leave of the Court of Appeal.

Grounds for appeal include that the judge committed:

  • an error of law;
  • an error of fact; or
  • an error of mixed fact and law.

The standard of review will depend on the type of error that is alleged.

Decisions of the appellate courts can be appealed to the Supreme Court of Canada with leave.

11 Costs and fees

11.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

Legal fees and disbursements, including filing fees, are incurred when litigating a class action. Whether the winning party can recover its costs depends on the province:

  • In some provinces, class proceedings do not give rise to costs awards;
  • In others, they give rise to costs awards based on a tariff; and
  • In others, the costs award is based on a percentage of actual legal fees incurred.

The winning party can recover its costs in those jurisdictions which permit costs awards. Costs and fees are set by the judge presiding over the case.

11.2 How are the costs and fees allocated among the members of the class?

Costs and fees will be allocated among the members of the class with reference to the retainer agreement between the representative plaintiff and class counsel. Normally class members do not pay costs unless as a portion of any recovered amount; and the representative plaintiff is frequently indemnified by class counsel against an adverse cost award.

11.3 What happens if the claim of a class member is withdrawn before the proceedings have terminated?

The proceedings may continue in relation to remaining class members; or they may be discontinued in the absence of a suitable class member that wishes to act as the representative plaintiff. It is not uncommon for a representative plaintiff to be replaced during the course of the proceeding.

11.4 Do the courts manage costs during the proceedings?

The court will establish the quantum of costs as part of the case management role, but will not otherwise manage costs.

11.5 How do the courts assess the costs and fees at the end of the proceedings?

This varies by province and may include reference to a tariff setting out the value of costs associated with certain steps in the proceeding or with reference to a portion of the actual legal fees incurred by the party.

12 Funding

12.1 Is legal aid available for class actions in your jurisdiction? If so, what requirements and restrictions apply in this regard?

Ontario and Quebec have funds which assist in relation to the funding of class actions. Applications must be made to these organisations for funding and the funding will cover disbursements and indemnify plaintiffs for costs awards. In Ontario, the fund considers:

  • the merits of the proposed case;
  • whether the applicant has made reasonable efforts to raise funds from other sources;
  • whether the applicant has a clear and reasonable proposal for the use of any funds awarded; and
  • whether the applicant has appropriate financial controls to ensure that any funds awarded are spent for the purposes of the award.

12.2 Are contingency fees and similar arrangements permitted in your jurisdiction? If so, what requirements and restrictions apply in this regard?

Yes, contingency fees and similar arrangements are permitted. The requirements and restrictions are set out by the relevant provincial law societies, and the court must approve the payment of any fees which are part of a settlement or adjudication of the claims.

12.3 Is third-party funding permitted in your jurisdiction? If so, what requirements and restrictions apply in this regard?

Yes, third-party funding is permitted. Third-party funding must be approved by the court in a class action proceeding. The process of weighing the benefits of third-party litigation funding against its potential champertous risks is an exercise of judicial discretion. The court has held that to approve a third-party funding agreement, the court must be satisfied that:

  • the agreement is necessary in order to provide access to justice;
  • the access to justice facilitated by the third-party funding agreement is substantively meaningful;
  • the agreement is a fair and reasonable agreement that facilitates access to justice while protecting the interests of the defendants; and
  • the third-party funder will not be overcompensated for assuming the risks of an adverse costs award because this would make the agreement unfair, overreaching and champertous.

In Quebec, while third-party funding is permitted, it is rare. Courts have awarded class counsel, as part of their fees, an amount to cover the costs of financing their legal fees when this financing was necessary in order to pursue the litigation.

12.4 What are the specific implications of such various funding arrangements in class action proceedings?

The courts in Canada no longer treat third-party litigation funding agreements as automatically unlawful. The courts will consider litigation funding agreements on their merits with input from the affected parties. The courts continue to be concerned about:

  • the protection of vulnerable parties whose recovery is the subject of the agreement; and
  • the potential for harm to the administration of justice that could accrue if the court were seen to allow third parties that are not parties to the litigation to profit unduly from or unreasonably control that litigation.

Litigation funding provides class counsel with an ability to fund litigation which may be lengthy and protracted.

13 Trends and predictions

13.1 In which areas are class actions most commonly brought? Have there been any major cases of note in recent years?

Class actions have been brought in a number of areas, including:

  • competition;
  • insurance;
  • securities;
  • privacy;
  • environment;
  • franchising;
  • consumer protection;
  • employment;
  • product liability;
  • claims against governments;
  • public interest cases;
  • aboriginal rights; and
  • banking.

There is an extensive body of class action case law in Canada, given the number of class actions that have been brought. The Supreme Court of Canada has been active in considering class actions issues in relation to:

  • the procedural requirements to certify;
  • the type of evidence (both lay and expert) necessary to advance claims;
  • multi-jurisdictional aspects of class actions;
  • legal questions relating to whether causes of action exist at law; and
  • issues such as whether arbitration clauses can preclude class actions.

There is a deep body of law on class action practice in Canada and many practitioners who focus on this area of practice.

13.2 How would you describe the current class action landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The class action landscape remains active in Canada. Legislative amendments in Ontario have arguably raised the bar for certification, which has led to increased filings in other jurisdictions, notably British Columbia. Quebec continues to be active in the class actions area given the low threshold for certification and the active class action bench. Further legislative reforms in Quebec are being considered.

We anticipate continued litigation of class actions relating to:

  • COVID-19 disruptions;
  • privacy and employment issues; and
  • consumer protection claims.

Product liability claims, including as they relate to recalls are also active. One expects that given the volatility in the markets, securities claims may increase. The insurance and banking sectors continue to be frequent targets of class action litigation.

14 Tips and traps

14.1 What would be your recommendations for the smooth progress of class actions in your jurisdiction and what potential pitfalls would you highlight?

National coordination of class actions is critical in Canada, given that each province and the Federal Court have class action legislation. It is important to understand the differences as between provinces and the subtleties as between jurisdictions, including the fact that some provinces have judges who focus largely on class actions A long-term strategy is important in class action litigation, given the various steps that need to be taken, with consideration of:

  • how any certified common issues will or will not determine the merits of any claims; and
  • whether preliminary motions are appropriate.

Given that a class action may take a number of years to proceed to a merits determination, it is also important to consider how the class action will impact on the company and proposed class members in what may become long-running litigation. There is a wealth of case law in the various provinces dealing with class actions, and a specialised bar has emerged who handle these types of cases.

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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