Class Actions and Québec's Draft Bill to Enact the New Code of Civil Procedure
Litigation and Dispute Resolution Bulletin
November 10, 2011
On September 29, 2011, the Québec Minister of Justice, Jean-Marc Fournier, tabled draft legislation to establish a new Code of Civil Procedure.
This article will examine the similarities and differences between the old and new rules governing class actions.
Au revoir "recours collectif", bonjour "action collective"
Articles 573 to 606 of the draft bill concern class actions. This procedural vehicle, which is referred to as a "recours collectif" ("collective recourse") in the French version of the existing legislation, is called "action collective" ("class action") in the draft bill.[1]
Broadened Definition of "Member"
From now on, legal persons established for a private interest, partnerships and associations can without restriction be members of a class, as has always been the case for natural persons: gone is the old limitation that to be members, legal persons established for a private interest, partnerships, and associations could have no more than 50 employees.
Let's compare the two texts:
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Draft Bill |
Current Code |
|
573. A class action is a procedural means enabling one member of a class of persons ("representative plaintiff") to act as plaintiff, without a mandate, on behalf of all the members of the class.
In addition to natural persons, a legal person established for a private interest, a partnership or an association can be a member of a class. It can itself request status as representative plaintiff if the director, partner or member it designates is a member of the class on behalf of which it is seeking to institute a class action, and the designee's interest is related to the objects for which it was constituted. |
999. In this Book, unless the context indicates a different meaning,
(a) "judgment" means a judgment of the court;
(b) "final judgment" means the judgment which decides the questions of law or fact dealt with collectively;
(c) "member" means a natural person, a legal person established for a private interest, a partnership or an association that is part of a group on behalf of which such a person, a partnership or an association brings or intends to bring a class action;
(d) "class action" means the procedure which enables one member to sue without a mandate on behalf of all the members.
A legal person established for a private interest, partnership or association may only be a member of a group if at all times during the 12-month period preceding the motion for authorization, not more than 50 persons bound to it by contract of employment were under its direction or control and if it is dealing at arm's length with the representative of the group. |
Authorization Criteria
The criteria for determining whether a class action can be authorized remain essentially unchanged.
Here are the two texts:
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Draft Bill |
Current Code |
|
577. The court authorizes the class action and appoints the class member it designates as representative plaintiff if it is of the opinion that:
(1) the claims of the members of the class raise identical, similar or related issues of law or fact;
(2) the facts alleged appear to justify the conclusions sought;
(3) the composition of the class makes it difficult or impracticable to apply the rules for mandates to sue on behalf of others or for joinder of demands; and
(4) the class member the court has decided to appoint as representative plaintiff is in a position to adequately represent the class members. |
1003. The court authorizes the bringing of the class action and ascribes the status of representative to the member it designates if of opinion that:
(a) the recourses of the members raise identical, similar or related questions of law or fact;
(b) the facts alleged seem to justify the conclusions sought;
(c) the composition of the group makes the application of article 59 or 67 difficult or impracticable; and
(d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately. |
Later on, we will look at the issue of the principle of proportionality and discuss whether this principle should be taken into account by judges who have to decide whether to grant a motion for authorization to institute a class action or not.
Multi-Jurisdictional Class Actions
The draft bill takes into account pan-Canadian and international class actions, now called "multi-jurisdictional class actions". Article 576 provides that, "[if] the subject matter of the class action is the same as or similar to the subject matter of a multi-jurisdictional class action that includes class members in Québec, the demand for authorization and notice must be notified, if the court considers it necessary, to the representative plaintiff in the multi-jurisdictional class action."
The judge who authorizes the institution of a class action can create a subclass of members located outside Québec.
Article 579 provides that "the court cannot refuse to authorize a class action on the sole ground that the class members are party to a multi-jurisdictional class action already underway outside Québec." On the other hand, the same provision also states that "if the court is convinced that another court is in a better position to decide the issues raised and that the rights and interests of the class members resident in Québec are being properly taken into account, it can suspend the examination of the demand for authorization, the time limit for filing the originating demand or the conduct of the class action until a judgment is rendered by that other court or a transaction is made or a settlement is reached."
Paragraph three of the same article provides that "[if] a multi-jurisdictional class action has been instituted outside Québec, the court, in order to protect the interests of the class members resident in Québec, can disallow the discontinuance of a demand for authorization, or authorize another plaintiff or representative plaintiff to institute a class action involving the same subject matter and the same group if it is convinced that the class members' interest would thus be better served."
Under "Judgment and Execution Measures", article 596 provides that:
If a demand for the homologation of a transaction or the recognition of a judgment in a foreign class action is presented to the court, the court makes sure that the rules of the Civil Code that apply to the recognition and enforcement of foreign decisions have been complied with and that the notices given in Québec in connection with the class action were sufficient.
The court must also make sure that the terms governing how Québec residents are to exercise their rights meet the requirements imposed in class actions brought before a Québec court, that Québec residents can exercise their rights in Québec in accordance with the rules applicable in Québec and that, in the case of an aggregate award, the remittance of any undistributed part of the award to a third person will be decided by a Québec court insofar as the Québec residents' share of the award is concerned.
Asymmetrical Appeal Rule Remains in Place
It was hoped that the rule limiting the right of appeal to cases where plaintiffs lose at the Superior Court would be abolished.
Unfortunately, the asymmetrical appeal rule still stands, and the new article 580 remains substantially similar to article 1010 of the current code.
Here are those texts side by side:
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Draft Bill |
Current Code |
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580. A judgment authorizing a class action cannot be appealed. A judgment denying authorization can be appealed as of right by the person who filed the demand for authorization or, with leave of the Court of Appeal, by a member of the class on whose behalf the demand for authorization was filed.
The appeal is heard and decided by preference. |
1010. The judgment dismissing the motion is subject to appeal pleno jure by the applicant or, by leave of a judge of the Court of Appeal, by a member of the group on behalf of which the motion had been presented. The appeal is heard and decided by preference.
The judgment granting the motion and authorizing the exercise of the recourse is without appeal. |
This unjust rule is indefensible, and essentially undermines one of the pillars of the legal system – the right to appeal.
In our legal system, the Court of Appeal's role is to correct errors made by trial or motion judges.
By preventing the appeal of Superior Court decisions authorizing a class action, the code effectively prevents errors made by Superior Court justices from being corrected. Claiming that authorization is merely a preparatory step or an administrative decision is unacceptable; the authorization decision is much more – it defines the class and the main questions of fact and law to be adjudicated collectively. A Superior Court judge can err in principle even at this stage, and it is crucial to allow these errors to be corrected.
Moreover, this sort of lopsided system exists only in Quebec. The right to appeal a decision certifying a proceeding as a class action is available in the rest of Canada and in the United States.
In Ontario, where the right to appeal a decision certifying an action as a class action exists, the Court of Appeal extends a certain deference to the trial judge's opinion unless it believes that there are errors in principle in the reasons for his or her decision. See Andersen v. Wilson,[2] and Cassano v. The Toronto-Dominion Bank.[3]
If we want the province of Québec to be a place where important (and pan-Canadian) class actions can be heard by the province's courts, it would be useful to harmonize the procedural and appeal rules with those of the other Canadian provinces, especially when the Québec rules cannot be justified as equitable or as complying with the fundamental principles of justice.
In a similar vein, if we want Québec class action decisions to be recognized abroad, we should ensure that the Québec rules of civil procedure meet the minimum standards of fair play and the principle of equality of arms and the rights of the defence.
A second criticism can be levelled on this subject: what happens if the majority of the conclusions sought by the plaintiff are rejected but the class action is authorized nonetheless?
Can plaintiffs who did not win all of the points of their case appeal and seek the conclusions that were dismissed at the trial of first instance?
The answer is no, as seen in Regroupement des citoyens contre la pollution v. Alex Couture.[4]
When the Act to Reform the Code of Civil Procedure[5] was passed, an evaluation of the application of the new rules was planned.[6] A report was prepared in 2009.[7]
The evaluation report responds as follows to the suggestion made by several members of the Bar that decisions allowing a motion for authorization to institute a class action be allowed to be appealed, with leave:
[TRANSLATION]
The rule introduced by the reform therefore remains preferable as, on one hand, the motion for authorization already constitutes the initial filtration mechanism for class actions and, on the other hand, a court decision authorizing a class action in no way limits the defendant in how it can argue the merits of its case.[8]
Interestingly, the committee uses the same reasoning but refrains from pushing the analysis any further. We can only hope that lawmakers will be more attentive to the concerns of the stakeholders.
The lawmakers' objective of encouraging swift proceedings is understandable, but comes at too high a cost. A solution to this compromise would be to allow the appeal of judgements authorizing a class action, with leave from a judge of the Court of Appeal which would both speed up the process and serve justice.
Notices
There are few differences between the draft bill and the current code in terms of notices.
Here are both texts side by side:
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Draft Bill |
Current Code |
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581. When a class action is authorized, a notice is published or notified to the class members
(1) describing the class and any subclass;
(2) setting out the principal common issues to be dealt with and the conclusions sought;
(3) stating the representative plaintiff's name, contact information for the representative plaintiff's lawyer and the district in which the class action is to proceed;
(4) stating that class members have the right to intervene in the class action;
(5) stating that class members have the right to opt out of the class action and specifying the procedure and time limit for doing so;
(6) stating that no class member other than the representative plaintiff or an intervenor can be required to pay legal costs arising from class action; and
(7) providing any additional information the court considers appropriate, including the address of the website for the central registry of class actions. |
1006. The notice to the members indicates:
(a) the description of the group;
(b) the principal questions to be dealt with collectively and the related conclusions sought;
(c) the right of a member to intervene in the class action;
(d) the district in which the class action is to be brought;
(e) the right of a member to request his exclusion from the group, the formalities to be followed and the time limit for requesting his exclusion;
(f) the fact that a member who is not a representative or an intervener cannot be called upon to pay the costs of the class action; and
(g) any other information the court deems it useful to include in the notice. |
The new article 583 provides that "[a]t any stage of a class action, the court can order a notice to be published or notified to the class members if it considers it necessary for the preservation of their rights." Notices must be given in terms that are "clear and concise."[9]
Conduct of Class Action
The draft bill does not substantially differ from the current code as regards instituting a class action.
Here are the texts:
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Draft Bill |
Current Code |
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585. The originating demand in a class action must be filed with the court not later than three months after the class action is authorized, under pain of the authorization being declared lapsed.
If a demand for a declaration of lapse is filed, the representative plaintiff, or another class member asking to be substituted as representative plaintiff, can prevent the authorization from being declared lapsed by filing an originating demand with the court. |
1011. The representative brings his demand in accordance with the ordinary rules. If he does not do so within three months of the authorization, the court may declare it perempted upon motion by any interested party served on the representative and accompanied with a notice of at least 30 days of its presentation. The notice must also be published at least 15 days before the date of presentation of the motion, in the same manner as the notice of the judgment granting the motion to authorize the bringing of the class action, unless the court orders another mode of publication.
So long as the motion is not decided, the representative or another member requesting to be substituted for him may still avoid the declaration of peremption of the authorization by bringing his demand; in such case, the court grants the motion, but for the costs only. |
Unexplainably, article 586 does not allow defendants to request that proceedings be split, though plaintiffs may do so.
There may be some advantage to splitting a legal action, dealing with liability first before assessing damages. But why should only plaintiffs be entitled to present such a request to the courts?
Let's now compare article 586 of the draft bill and article 1012 of the current code:
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Draft Bill |
Current Code |
|
586. The defendant cannot urge a preliminary exception against the representative plaintiff unless it concerns a substantial number of the class members and pertains to a common issue to be dealt with in the class action. Nor can the defendant request a splitting of the proceeding or file a crossdemand. |
1012. Except in the case where he claims to have a recourse in warranty, the defendant cannot urge a preliminary exception against the representative unless it is common to a substantial part of the members and bears on a question dealt with collectively. |
The new article 587 essentially restates articles 1014 and 1016 of the current code.
Those texts read as follows:
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Draft Bill |
Current Code |
|
587. The representative plaintiff must have the authorization of the court to amend a pleading, to discontinue the demand, to withdraw a pleading or to waive rights arising from a judgment. The court can impose any conditions it considers necessary to protect the rights of the class members.
An admission by the representative plaintiff binds the class members unless the court considers that the admission causes them prejudice. |
1014. An admission by a representative binds the members unless the court considers that the admission causes them prejudice.
1016. The representative cannot amend a proceeding, or discontinue, in whole or in part, the action, a proceeding or a judgment, without the permission of the court and except on the conditions it deems necessary. |
The member intervention rules essentially remain unchanged.
The texts read as follows:
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Draft Bill |
Current Code |
|
588. A class member cannot intervene voluntarily for the plaintiffs except to assist the representative plaintiff or to support the representative plaintiff's demand or claims. The court authorizes an intervention if it is satisfied the intervention is helpful to the class. The court can limit an intervenor's right to file a pleading or participate in the trial. |
1017. A member cannot intervene voluntarily in demand except to assist the representative, to aid his demand or to support his pretensions.
The court admits the intervention if of opinion that it is useful to the group.
1018. In the case of a conservatory intervention, the court may at any time limit the right of an intervener to produce a proceeding or to participate in the proof or hearing, if it is of opinion that the intervention is prejudicial to the conduct of the action or is contrary to the interests of the members. |
The rules on examining the members are essentially the same.
Here are the texts:
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Draft Bill |
Current Code |
|
589. A party cannot submit a class member other than the representative plaintiff or an intervenor to a pre-trial examination or to a medical examination, nor can a party examine a witness outside the presence of the court. The court can make exceptions to these rules if it considers that doing so would be helpful for its determination of the common issues of law or fact. |
1019. A party cannot, before the final judgment, submit a member other than a representative or an intervener to an examination on discovery or a medical examination unless the court considers the examination on discovery or medical examination useful to the adjudication of the questions of law or fact dealt with collectively.
1020. A witness cannot be heard out of court without the permission of the court. |
The rules for annulling an authorization to bring a class action are essentially the same.
Here are the texts:
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Draft Bill |
Current Code |
|
590. The court can at any time, on a party's request, revise or annul the authorization judgment if it considers that conditions relating to the issues of law or fact or to the composition of the class are no longer satisfied.
If the court revises the authorization judgment, it can allow the representative plaintiff to amend the conclusions sought. If circumstances so require, the court can also, at any time, even on its own initiative, modify or divide the class.
If the court annuls the authorization judgment, the proceeding continues between the parties before the competent court pursuant to the rules of Book II. |
1022. The court may, at any time, upon the application of a party, revise the judgment authorizing the bringing of the class action if it considers that the conditions set forth in paragraph a or c of article 1003 are no longer met.
The court may then amend the judgment authorizing the bringing of the class action or annul it, or allow the representative to amend the conclusions sought.
In addition, if the circumstances so require, the court may, at any time, and even ex officio, change or divide the group. |
The rules for retaining the interest to act as representative are essentially the same.
Compare the texts:
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Draft Bill |
Current Code |
|
591. The representative plaintiff is deemed to retain sufficient interest to act even if his or her personal claim is extinguished. The representative plaintiff cannot waive status as such without the authorization of the court. Such authorization cannot be given unless the court is able to appoint another class member as representative plaintiff.
If the representative plaintiff is no longer in a position to adequately represent the class members or if his or her personal claim is extinguished, another class member can ask the court to be substituted as representative plaintiff or propose some other class member for that purpose.
A substitute representative plaintiff continues the proceeding from the stage it has reached but, with the authorization of the court, can refuse to ratify acts already done if they have caused irreparable prejudice to the class members. A substitute representative plaintiff is not liable for legal costs and other expenses in relation to acts done prior to the substitution that he or she has not ratified, unless the court orders otherwise. |
1023. The person wishing to waive his status of representative can only do so with the authorization of the court.
The courts accepts the waiver if it is able to ascribe the status of representative to another member.
1024. A member may, by motion, apply to the court to have himself or another member substituted for the representative.
The court may substitute the applicant or another member consenting thereto for the representative if it is of opinion that the latter is no longer in a position to represent the members adequately.
The substituted representative accepts the trial at the stage it has then reached; he may, with the authorization of the court, refuse to ratify the proceedings already had if they have caused an irreparable prejudice to the members. He cannot be bound to pay the costs and other expenses for proceedings prior to the substitution, unless the court orders otherwise. |
Finally, the rules for approving transactions are essentially the same, although the exception for acquiescences that are unconditional in the whole of the demand has been repealed. Why, however, is unclear.
Here are the texts:
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Draft Bill |
Current Code |
|
592. A transaction, acceptance of a tender, or an acquiescence is valid only if approved by the court. Such approval cannot be given unless notice has been given to the class members.
In the case of a transaction, the notice must state that the transaction will be submitted to the court for homologation on the date and at the place indicated. It must specify the nature of the transaction, the mode of execution chosen and the procedure to be followed by class members to prove their claim. The notice must also state that class members have the right to make submissions to the court as regards the proposed transaction and the distribution of any remaining balance. The judgment homologating the transaction determines, if necessary, the terms of its execution. |
1025. Transaction, acceptance of a tender or acquiescence, except where it is unconditional in the whole of the demand, is valid only if approved by the court. This approval cannot be given unless a notice has been given to the members.
The notice must state
(a) that the transaction will be submitted to the court for approval, specifying the date and place of such proceeding;
(b) the nature of the transaction and the method of execution;
(c) the procedure to be followed by the members to prove their claims; and
(d) that the members have the right to present their arguments to the court as regards the transaction and the distribution of any balance remaining.
The judgment determines, is such is the case, the terms and conditions of application of articles 1029 to 1040. |
Judgment and execution Measures
There are not that many differences between the draft bill and the current code where judgments and execution measures are concerned.
Here are the texts:
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Draft Bill |
Current Code |
|
593. The judgment on a class action describes the class to which it applies, and is binding on all class members who have not opted out.
Once the judgment has become final, the court of first instance orders the publication of a notice stating the substance of the judgment and its notification to each known class member. |
1027. Every final judgment describes the group and binds the member who has not requested his exclusion from the group. |
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Draft Bill |
Current Code |
|
594. If the judgment awards damages or a monetary reimbursement, it specifies whether members' claims are to be recovered as shares of an aggregate award or as individual claims. |
1028. Every final judgment condemning to damages or to the reimbursement of an amount of money orders that the claims of the members be recovered collectively or be the object of individual claims. |
However, the draft bill innovates by allowing the Superior Court to award the representative an indemnity. In that vein, see article 595:
595. The court can award the representative plaintiff an indemnity for expenses and disbursements and an amount to cover legal costs and his or her lawyer's fee. Both are payable out of the aggregate award or before payment of individual claims.
Note that this provision also deals with the fees charged by the representative plaintiff's lawyer.
The text seems to codify the existing case law on lawyers' fees.
The new article 596 deals specifically with the homologation of transactions or recognition of "foreign" judgments.
It would seem that the purpose of this provision is to take into account the Supreme Court of Canada's ruling in Canada Post Corp. v. Lépine.[10]
Aggregate Awards
There is no notable difference between the current rules and those proposed in the draft bill.
Compare the texts:
|
Draft Bill |
Current Code |
|
597. The court makes an aggregate award for all class members if the evidence allows a sufficiently precise determination of the total claim amount. The amount of the aggregate award is determined without regard to the identity of individual class members or the exact amount of their respective claims.
After determining the amount of the aggregate award, the court can order that the award be deposited in its entirety, or according to the terms it specifies, in a financial institution carrying on business in Québec; the interest on the amount deposited accrues to the class members. The court can reduce the amount of the aggregate award if it orders an additional form of redress, or can order redress appropriate to the circumstances instead of a monetary award.
If execution measures prove necessary, instructions are given to the bailiff by the representative plaintiff. |
1031. The court orders collective recovery if the evidence produced enables the establishment with sufficient accuracy of the total amount of the claims of the members; it then determines the amount owed by the debtor even if the identity of each of the members or the exact amount of their claims is not established. |
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Draft Bill |
Current Code |
|
598. If the court makes an aggregate award, it provides for individual liquidation of the class members' claims or for distribution of a share to each class member. If, in the court's opinion, such liquidation or distribution is inappropriate or too costly, the court can order that an amount be remitted to a third person it designates.
Before deciding to remit an amount to a third person, the court hears the parties' representations, the Class Action Assistance Fund and any other person whom the court considers has a relevant opinion. |
1032. The judgment ordering the collective recovery of the claims orders the debtor either to deposit the established amount in the office of the court or with a financial institution operating in Québec, or to carry out a reparatory measure that it determines or to deposit a part of the established amount and to carry out a reparatory measure that it deems appropriate.
Where the court orders that an amount be deposited with a financial institution, the interest on the amount accrues to the members.
The judgment may also, for the reasons indicated therein, fix terms and conditions of payment.
The clerk acts as seizing officer on behalf of the members. |
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Draft Bill |
Current Code |
|
599. If the judgment provides for individual liquidation of the class members' claims or for distribution of a share to each class member, the court designates a person to carry out the operation, gives the person the necessary instructions, including instructions as to proof and procedure, and determines the person's remuneration.
The court disposes of any undistributed amount in the same manner as when it remits an amount to a third person, unless the judgment is against the State, in which case the undistributed amount is paid into the Consolidated Revenue Fund. |
1033. If the judgment ordering collective recovery provides for the individual liquidation of the claims of the members or the distribution of an amount to each of them, this liquidation or distribution is effected in the manner provided in articles 1037 to 1040.
Amounts not claimed or not distributed constitute the balance.
1033.1. The court may designate a third person to liquidate individual claims or to distribute the amounts awarded by a judgment to each member and determine that person's remuneration.
The distribution of the amounts awarded by the judgment or agreed by way of a homologated transaction is effected under the supervision of the court.
1034. The court may, if of opinion that the liquidation of individual claims or the distribution of an amount to each of the members is impossible or too expensive, refuse to proceed with it and provide for the distribution of the balance of the amounts recovered collectively after collocating the law costs and the fees of the representative's attorney. |
|
Draft Bill |
Current Code |
|
600. The liquidation, distribution or remittance of an amount recovered under an aggregate award is effected after payment, in the following order, of
(1) the legal costs, including the cost of notices and the remuneration of a third person designated to carry out the liquidation or distribution;
(2) the fee of the representative plaintiff's lawyer, to the extent determined by the court; and
(3) the representative plaintiff's expenses and disbursements, to the extent determined by the court. |
1035. The claims are collocated in the following order:
(1) law costs, including the costs of notification and the remuneration referred to in article 1033.1;
(2) the fees of the representative's attorney; and
(3) the claims of the members, if any. |
Individual Claims
In terms of individual claims, there are not that many differences between the current code and the draft bill.
Here are the texts side by side:
|
Draft Bill |
Current Code |
|
601. A judgment ordering the recovery of individual claims specifies what issues remain to be decided in order to determine individual claims, and sets out the content of the judgment notice to the class members, which must include explanations as to those issues and as to the information and documents to be filed in support of an individual claim. The court also determines any other information to be included in the judgment notice.
Within one year after the publication of the notice, class members must file their claim at the office of the court in the district where the class action was heard or in any other district the court specifies. |
1037. This chapter applies where it is expedient to render judgment upon the individual claims of the members.
1038. When the final judgment acquires the authority of res judicata, a member may, within one year following the publication of the notice provided for in article 1030, file his claim at the office of the court of the district in which the class action was heard or of any other district as determined by the court. |
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Draft Bill |
Current Code |
|
602. The court determines the class members' claims or orders the court clerk to determine them according to the procedure it establishes. The court can establish special modes of proof and procedure for such purpose. |
1039. The court decides the claim of the member or orders the clerk to render judgment in accordance with the terms and conditions it determines.
The court may, if it deems it necessary in the interest of justice and of the parties, determine special modes of proof and procedure. |
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Draft Bill |
Current Code |
|
603. At the hearing on an individual claim, the defendant can urge against a claimant a preliminary exception that this Title did not permit against the representative plaintiff. |
1040. The defendant may urge a preliminary exception against a claimant which article 1012 prevented him from moving earlier. |
Appeal Against a Judgment on the Merits of the Class Action
Once again, there are not that many differences between the current code and the draft bill, as can be seen from the texts:
|
Draft Bill |
Current Code |
|
604. The judgment disposing of a class action can be appealed as of right.
If the representative plaintiff does not initiate an appeal or if the appeal is dismissed on the grounds that it was not properly initiated, a class member can, within two months after the publication or notification of the judgment notice, ask the Court of Appeal for leave to be substituted as representative plaintiff in order to appeal the judgment.
The time limit in this article is a strict time limit. |
1041. The final judgment is subject to appeal pleno jure by a party.
1042. If the representative does not appeal or if his appeal is dismissed for one of the reasons provided for in paragraph 1 or 3 of the first paragraph of article 501, a member may, within 60 days following the date of the publication of the notice contemplated in article 1030, apply to the Court of Appeal for leave to appeal and to be substituted for the representative. The Court grants the motion if it is of opinion that the interest of the members so requires. |
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Draft Bill |
Current Code |
|
605. The appellant asks the court of first instance to determine the content of the notice to be given to the class members. |
1043. The appealing party addresses the court of first instance for determination of the notice to be given to the members. |
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Draft Bill |
Current Code |
|
606. If the Court of Appeal grants the representative plaintiff's demand, even in part, it can order the matter referred back to the court of first instance for execution of the aggregate award or for determination of individual claims. |
1044. If the Court of Appeal, in opposition to the Superior Court, maintains the demand of the representative, in whole or in part, it may order the record of the action returned to the court of first instance so that collective recovery may be proceeded with or judgment may be rendered on the individual claims of the members. |
The Principle of Proportionality
The idea that the principle of proportionality governs the conduct of the parties in the context of a dispute was introduced in the 2003 Act to Reform the Code of Civil Procedure. [11]
This was the act that added what is now article 4.2 of the Code of Civil Procedure:
4.2. In any proceeding, the parties must ensure that the proceedings they choose are proportionate, in terms of the costs and time required, to the nature and ultimate purpose of the action or application and to the complexity of the dispute; the same applies to proceedings authorized or ordered by the judge.
The draft bill uses the same idea in articles 2 and 18:
2. Parties who commit to a dispute prevention and resolution process do so on a voluntary basis. They are required to participate in good faith, to be open and transparent with each other, including as regards the information in their possession, and to co-operate actively in searching for a solution.
They and the third persons assisting them must ensure that their actions are proportionate, in terms of the cost and time involved, to the nature and complexity of the dispute.
18. Parties must adhere to the principle of proportionality and ensure that their actions, their pleadings, including their choice of an oral or a written defence, and the means of proof they use are proportionate, in terms of the cost and time involved, to the nature and complexity of the matter and the purpose of the demand.
Judges, in managing the proceedings they are assigned, must likewise ensure that the measures or acts they order or authorize, whether at the case management, trial or execution stage, are so proportionate, while bearing in mind the efficient processing of the court's caseload and the general interest of justice.
The debate is still open as to whether the court must take the principle of proportionality into account when authorizing a class action.
After Marcotte v. Longueuil (City)[12] and Breslaw v. Montréal (City),[13] many believed that the controversy had finally been settled since a Supreme Court majority ruled that it did not wish to "to limit [the principle of proportionality] to a principle of interpretation that confers no real power on the courts in respect of the conduct of civil proceedings in Quebec."[14]
And yet, in a later decision, the Court of Appeal[15] questions Justice LeBel's "[TRANSLATION] several comments" on the scope of article 4.2!
In order to finally lay this issue to rest, the Québec statute should be harmonized with the class action legislation of other Canadian provinces and explicitly set forth provisions similar to section 5(1)d) of the Ontario Class Proceedings Act, 1992:[16]
a class proceeding would be the preferable procedure for the resolution of the common issues.
All other Canadian provinces have legislation containing a provision more or less to that effect; adding such a provision to our own law would allow us to access the rich and subtle case law of other provinces. As we all know, judges who apply the "preferable procedure" criterion ask themselves whether exercising a class action will meet the threefold goal of resulting in access to justice, judicial economy and behaviour modification.
Examination of Plaintiff
The draft bill maintains the rule that prohibits plaintiffs from being examined as of right in a motion for authorization in institute a class action, an innovation of the 2003 Act to Reform the Code of Civil Procedure.
The evaluation report prepared by the Ministère de la Justice on the Act to Reform the Code of Civil Procedure[17] has this to say about the reform:
[TRANSLATION]
In terms of class actions, the most important amendment brought by the Act to Reform the Code of Civil Procedure is that motions for authorization to institute a class action no longer need to be supported by a sworn declaration or affidavit, which means that plaintiffs can no longer be examined before a motion is presented (art. 1002). The point of this amendment is to reduce the delays brought about by countless examinations before the presentation of motions for authorization; its purpose is also to postpone the debate on the merits of the dispute until after the class action is instituted. The reform therefore has a limiting effect on the parties, who all too often argue on the merits at the preliminary stage of authorization.
Though its validity has been attacked before the courts, the amendment was upheld by the Court of Appeal and the Supreme Court because defendants still have the possibility to contest at the authorization stage and the other rules of civil action remain unchanged and continue to apply to class actions, "the authorization of the class action neither alienating nor withdrawing any of the defendants' substantive rights to use all legal means at their disposal to challenge the allegations made by the plaintiffs at the authorization stage."
This, however, is not entirely accurate. True, the Court of Appeal did decide in Pharmascience Inc. v. Option consommateurs[18] that this rule is not incompatible with the Charter of Human Rights and Freedoms.[19]
However, the Supreme Court of Canada did not confirm the provision's validity. It simply refused to grant leave to appeal,[20] which does not amount to upholding the Court of Appeal ruling.
What is more, the 2003 amendment was based on a faulty diagnosis.
At first glance, preventing respondents from examining plaintiffs in the context of a motion for authorization to institute a class action would appear to simplify cases and speed up hearings of motions for authorization to institute a class action.
But is precipitating matters really expedient? And, at the risk of sounding naïve, is it fair?
These are not separate questions. Article 1002 of the current version of the code allows the parties to petition the court for permission to bring appropriate evidence. As is often the case in motions, permission is requested to examine the potential representative to see, at the very least, if he or she is in conflict of interest with the members of the group.
The judges, and even a number of plaintiffs' lawyers, have both implicitly and explicitly acknowledged that bringing potential representatives to the table is fair game.
This is precisely where the ends of justice are in line with the goal of settling disputes quickly.
By allowing plaintiffs to be examined, respondents can accomplish the crucial task of evaluating the risks to which they are exposed. Indeed, merely examining a motion for authorization to institute a class action is often not enough to accurately gauge the scope of a claim. Respondents are frequently unable to quantify the risks to which they are exposed. They do not know how many members a potential group might have, nor can they evaluate the prejudice suffered by those members. By allowing these questions to be put to plaintiffs, respondents are establishing first contact with the opposing party and setting in motion the risk evaluation process, an unavoidable and fundamental step in any negotiation.
It is often in these first exchanges that the idea of negotiation begins to take form.
But by preventing respondents from getting a true picture of the claim as well as the strengths and weaknesses of the motion, negotiations are being delayed to a greater or lesser degree – if not compromised outright. This rule which at first glance seems to be designed to speed up access to justice in fact turns out to have the opposite effect.
Oral Contestation
The draft bill maintains the rule for orally contesting motions for authorization to institute class actions, another innovation of the Act to Reform the Code of Civil Procedure.
Should such a restriction even exist? It has been my experience that, on the contrary, plaintiffs' lawyers want to know the defence's arguments!
[1] This rather pointless terminological amendment seems to be inspired by the European French practice of speaking of action de groupe, action collective, action en représentation conjointe, and even class action.
[2] (1999) 44 O.R. (3d) 673 (C.A.).
[3] (2007) 87 O.R. (3d) 401 (C.A.).
[4] [2007] J.Q. No. 3468, J.E. 2007-934 (C.A.).
[5] 2002, L.Q., c. 7.
[6] Article 180.
[7] http://www.justice.gouv.qc.ca/english/publications/rapports/crpc-rap4-a.htm
[8] Page 67.
[9] Article 1046 of the current code speaks of "plain language that will be easily understood by the persons to whom it is addressed," which seems a much better way of putting things.
[10] 2009 SCC 16.
[11] Supra note 5.
[12] 2009 SCC 43; [2009] 3 S.C.R. 65.
[13] 2009 SCC 44; [2009] 3 S.C.R. 131.
[14] Supra, note 12 at paragraph 42.
[15] Apple Canada Inc. v. St-Germain, 2010 QCCA 1376.
[16] S.O. 1992, chapter 6.
[17] Supra note 7.
[18] [2005] R.J.Q. 1367 (C.A.), AZ-50310859, 2005 QCCA 437, J.E. 2005-906.
[19] R.S.Q., c. C-12.
[20] C.S. Can., August 25, 2005. Motion for leave to appeal before the Supreme Court dismissed.