Obtaining effective results for class and other group actions
From the perspective of the individual citizen, the class action has become the most powerful vehicle to effect social change. It is the great leveler between you and any large organization, be it a government or corporation. In the past, when people have suffered a loss at the hands of these entities, the economic disparity has rendered them practically powerless in the battle to obtain a remedy. Now, there is power in numbers.
If numerous people have similar claims due to a wrongful act of another person or entity, then it is possible to consider a class action (group lawsuit).
At Nelligan O’Brien Payne LLP, we have launched a number of creative and unique class actions that have obtained remedies for our clients – which they could not have recovered on their own. Examples include class actions related to:
- Food poisoning
- Personal injury
- Defective product
- Remedies for groups of employee
Some of our current and ongoing class actions include:
1) Issue a Statement of Claim
The first step in a class action is the same as in any action: issuing a statement of claim. A statement of claim is a concise statement of the facts that you allege, and a request for an award from the defendant.
2) Defendant issues a Statement of Defence
The defendant delivers a Statement of Defence in which he refutes or admits the allegations in the statement of claim and sets out his allegations of material facts.
3) Bring a Motion to Certify the Class Action
In Ontario, all class actions must be certified by a court. In order to successfully certify a class action, we must demonstrate to a judge that:
- the pleadings or the notice of application discloses a cause of action;
- there is an identifiable class of two or more persons that would be represented by the representative plaintiffs or defendant;
- the claims or defences of the class members raise common issues;
- a class proceeding would be the preferable procedure for the resolution of the common issues; and
- there is a representative plaintiff or plaintiffs.
The motion must be supported by an affidavit sworn by the representative plaintiff or plaintiffs. As well, we will need to present a preliminary litigation plan to the court – i.e. a plan on how to proceed with the litigation if it gets certified as a class action.
4) Pre-Certification Conference
This step assumes that the defendant will oppose our motion for certification of a class action. After we bring our motion to certify the class action, but before the motion is heard, most judges hold pre-certification case management conferences. This conference would be attended by our lawyers and the lawyers for the defendant. In these conferences, the judge tries to narrow down the issues to be argued about certification, as well as set a schedule for what is to proceed until the motion itself is heard.
5) Pre-Certification Examinations and Discovery
The defendant may have the opportunity to cross-examine the representative plaintiff or plaintiffs on his or her affidavit. The cross-examination of the representative plaintiff is limited to the facts relevant to the certification motion itself and is not an inquiry into the merits of the action. This means that the defendant cannot examine the representative plaintiff in detail about the claim he or she is making.
6) Certification Hearing (Stage 1)
In Ontario, the certification stage is sometimes split into two parts. In the first stage of the hearing, the Court will determine the threshold questions relating to whether the proceeding is appropriate for a class action – namely, whether the 5 conditions listed above in topic 3 are satisfied.
7) Certification Hearing (Stage 2)
Stage 2 of the hearing deals with the details of the certification. It will set out items such as:
- the precise class description;
- the description of any sub-classes (if necessary);
- defining the common issues; and
- setting out the litigation plan in detail.
To prepare for this stage we will have carefully constructed the class definitions and prepared a detailed litigation plan.
8) Notice to Class Members
After the certification order has been made, the court will approve a method of providing notice to all class members of the class action. This procedure is in place to let every class member know that a class action has been commenced on their behalf, and to give them the opportunity to opt out of the class action if they feel it necessary. The notice describes the proceeding, including the names and addresses of the representative plaintiffs.
Notice can be sent a variety of ways, including mail, advertisements and posting.
Notice can be an expensive part of the litigation. For that reason, many courts require the defendant to pay at least part of the cost of the notice. Also, it is common for the defendant to pay the costs of notice as one of the terms of any settlement.
9) Opting Out: usually 90-120 days
After notice of the class action is sent out there is a window of opportunity for disinterested class members to opt out of the class action. This window has tended to range from 90-120 days, but could be longer in some cases. Usually opting out involves writing to the representative plaintiffs, the lawyer or the court.
10) Mediation: after date for trial set
The Court requires all cases to go to mediation before they are ever tried in a courtroom. Any settlement of the class action has to be approved by the Court. Our experience has demonstrated that more than half of personal injury related cases are settled at or shortly after mediation.
The mediation in this instance will be focused on trying to settle the common issues, and also drafting an agreed statement of facts. It may also address any individual claims.
11) Examination for Discovery
At this point, the defendant may choose to cross-examine the representative plaintiffs. We have the right to examine the defendant as well.
12) Trial of Common Issues
Class Action trials are almost always done in two parts. In the first part, the court will decide the merits of the common issues. For example, in our case the court will decide what, if any, legal duties Dr. Barwin owed to his patients and the children he helped them conceive and whether he breached those duties.
13) Individual Damage Assessment
Part two of the trial involves the damage assessment for each individual class member. This is usually not done in a formal trial setting, but instead in front of arbitrators, mediators or other non-judicial dispute resolution experts. The damage assessment would settle issues such as the length of the notice period that each class member would receive, and the value of the class member’s damages entitlement.
- Particulars of Claims by each class member
Each class member prepares a written document explaining their situation, i.e. whether they were patients of Dr. Barwin or a child of one of his former patients, the nature of the fertility issue, and whether or not Dr. Barwin used his own sperm in the insemination procedure, etc.
- Mediation of individual claims
The individual claims of class members will be mediated in an effort to settle them.
- Arbitration of any claims that do not settle at mediation
After arbitration, an award will be issued.
Frequently Asked Questions
Q: Can the statement of claim be modified to add other common issues?
A: In Ontario, the representative plaintiff cannot amend the pleadings without the permission of the Court. The Court will not allow the representative plaintiff to add new common issues that contain “serious new allegations which fundamentally change the nature of the action to one quite different from the action originally certified.”
Q: What are the conditions for opting out of the class action?
A: After certification is granted, there is usually a limited window of opportunity to opt out. This window has tended to range from 90-120 days in Ontario, but can run longer in some cases. The decision to opt out should be in writing and is normally sent to counsel for the plaintiff, or to the court. These conditions will be included in the notice to the class that goes out after certification
Q: How are the parameters of the class determined?
A: The class is chosen by the moving party – in other words, the representative plaintiff or plaintiffs. The Court can then either accept the class or require a different class. Courts are generally deferential to the class chosen by the representative plaintiff. The Supreme Court of Canada has stated that so long as the class is bounded (i.e. not unlimited) and defined by reference to objective criteria, it is acceptable. This means, for example, that a class cannot exclude specific individuals for personality reasons (“We don’t like Bob, so he cannot join our class.”).
Q: Who gets input into the statement of claim?
A: Technically, the only persons who need to be consulted are the representative plaintiffs. However, as a practical matter, we will consult everybody who has retained our firm and will continue to distribute information to those individuals regularly.
Q: What is the difference between a class action and a group action?
A: The difference is the obligation to certify the class action. A class action binds everybody who meets the description of the class, so the court needs to supervise its creation. A group action, on the other hand, only binds the members of that group who bring the claim. A class action takes more time to put together because of the certification motion, but usually ends up being cheaper because costs are shared among the entire class.
Q: How is the case managed between the lawyer, the representative plaintiff, and the class members?
A: The representative plaintiffs have the duty to perform certain tasks with respect to the litigation, including being examined during discovery. Being the representative plaintiffs can sometimes be a time consuming job, perhaps a couple of hours a week. As for the class members, they will be consulted with respect to strategic decisions in the litigation and will be updated frequently about what is going on.
Q: How are individual claims handled in the settlement?
A: Usually according to a formula agreed to as part of the settlement. If there is any dispute about the individual value, we would represent you.
Questions About Fees
Q: How are any unrecovered legal expenses apportioned among the class members?
A: They are apportioned equally among the class members.
Q: Is this case being brought on a contingency basis?
A: Yes. Ontario law allows a class action to be brought on a contingency basis. The best contingency arrangement is what is called the “multiplier” approach (called the “Lodestar” approach in the U.S.). The lawyer in this situation would charge a base hourly fee for the case. The court would then multiply that hourly rate by some number, and the product would be the lawyer’s fee. The size of the multiplier is determined by the Court and is the result of a number of factors, including the difficulty of the case and the result obtained. Multipliers in Ontario have typically ranged from 1 to 3.
Q: Will other class members be asked to pay a retainer when they opt in?
A: No. There is no opt-in procedure with a class action. All individuals who meet the definition of the class are in automatically, unless they choose to opt out.