Class Actions in British Columbia

What is a class action?

Mass production and marketing of consumer goods and services means that a single mistake or wrongful act at any stage of design, production, or distribution can injure or cause loss to many people in a similar way. One response to these injuries or losses (called “mass wrongs”) is a “class action” – a lawsuit that groups people with a common claim together against the same defendant. A class action deals with several claims that would otherwise be separate lawsuits.

A class action is cost effective

Often, injured people won’t sue individually because the amount of money they seek is too small compared to their legal costs. And it’s often not practical for just one buyer of a defective product to sue a large manufacturer. But the total loss or damages suffered by many injured people or buyers may be very large. Class actions make lawsuits more affordable by allowing all the victims of a mass wrong to, in effect, share the cost of a lawsuit. You might say that class actions allow “mass-produced lawsuits” for “mass-produced wrongs.”

What kinds of cases are suitable for a class action?

Class actions are often used in product liability cases when a manufactured item, like a drug or a vehicle, is defective and injures many people. Class actions are also common against governments, banks, and businesses related to the stock market – for overpayment of taxes, illegal service charges, misrepresentations, and even systemic discrimination. Class actions may also be brought against companies for price fixing, monopolization and providing misleading information. Whenever a mistake or wrongful act affects many people, a class action may be effective.

What court hears a class action?

Class actions have been part of the legal landscape in British Columbia since 1996. They are governed by the Class Proceedings Act. It lets one person sue in the BC Supreme Court on behalf of a group of people if they have similar claims against the same wrongdoer. The Federal Court of Canada also allows certain class actions involving federal law and the federal government.

How is a class action started?

Under BC law, a person who has been hurt or suffered loss can apply to the BC Supreme Court to be the “representative plaintiff” in a lawsuit on behalf of a group of people. These people also have to ask the court to “certify” the lawsuit as a “class proceeding.” The lawyer for the representative plaintiff becomes the lawyer for all the class members. A defendant to two or more proceedings may also ask the court to convert those proceedings to a class proceeding.

Certification is the most important stage in a class action

Almost all class actions that are certified go on to be settled. If a court doesn’t certify a class action, the members of the group can usually sue individually, as if the class action had never started.

What’s needed to get a court to certify a class action?

The court must certify the lawsuit as a class action if the following five criteria are satisfied:

1. The document that the plaintiff files in court (called the Notice of Civil Claim) shows a legally valid claim based on a mistake or wrongful act.
2. The court can identify two or more people as a class, who are then called class members. The class is easily defined, so individuals can readily identify whether they fit into the class. (In some cases, classes are further divided into subclasses.)
3. There are common issues in the claims of the class members.
4. A class action is the best way to fairly and efficiently resolve the common issues.
5. There is a representative plaintiff – someone who can represent all the members of the class.

There are three requirements for the representative plaintiff

A representative plaintiff:

1. Must fairly represent the interests of the class members.
2. Must have a plan to run the class action for the class members and notify them of the lawsuit.
3. Must not have an interest conflicting with interests of other class members on the common issues.

How do you decide whether there should be a class action?

People who are thinking of using a class action should consider the following things:

1. Has a class action dealing with the same issues already been filed?
2. Is a class action a fair and efficient way to solve the common issues?
3. Are the common issues more important than the individual issues?
4. Is a lawsuit the best way to solve the claims? Has the defendant come up with other ways to compensate class members?
5. What type of lawsuit is best for the case: class action or individual?
6. Is a class action too complicated?

For example, a class action is not appropriate when individual issues that have to be determined would overwhelm any benefit from determination of the common issues. In these cases, there is a risk of long and complex individual trials after the common issues are determined.

Class members must be notified of a class action

Many class members wouldn’t know if a class action has been started and certified by the court. To protect these people, the representative plaintiff must notify the class members of the class action in a way approved by the court. This notice can be by letter if the class members are known; otherwise, it will most often be by newspaper or magazine advertising. Class members must also be notified of any determination of common issues and any settlement.

Can class members opt out of a class action?

Class members can choose not to be part of a class action (or “opt out” of it) if they want to sue on their own. To opt out, they must usually fill out a form or write a letter to the court or the lawyer of the representative plaintiff. People who don’t opt out have to accept the result of the class action.

A judge supervises the lawsuit for all class members

Even if class members know about a class action, most of them probably won’t be in court. To protect their interests, a judge supervises every stage of the class action, from start to end. The judge looks out for the best interests of the class as a whole, not just the representative plaintiff, to ensure both the process and results are fair. If the representative plaintiff agrees to settle the class action, the judge will ensure that a notice to class members is published and that the settlement is fair, reasonable and in the best interests of the class as a whole.

How is a judgment made?

The court can assess compensation for the class as a whole without proof of individual claims. It may use statistical evidence when assessing the amount. After this assessment, the court can award individual class members compensation as a proportion of the total amount, or it can decide their compensation individually.

Paying the defendant’s legal costs is usually not a risk

With class actions, an unsuccessful representative plaintiff in BC doesn’t usually have to pay part of the defendant’s legal costs (which can happen in individual lawsuits). So starting a class action is not as risky as starting an individual lawsuit. This “no costs” regime in BC is meant to increase people’s access to justice. Not all Canadian provinces operated on a “no costs” basis.

Can you appeal a class action?

Any member of the class may appeal an order to certify a proceeding as a class, a refusal to certify a proceeding as a class, or a judgment on a common issue.

Class actions are becoming more common

The trend towards more frequent class actions will probably continue now that all 13 jurisdictions in Canada have class action laws. The Canadian Bar Association hosts a National Class Action Database, designed to give lawyers and the public easy access to court documents submitted in relation to class action lawsuits currently underway across the country. In BC, registration with the Database is mandatory. You can search the Database at www.cba.org/CBA_ClassAction/Search.aspx.

Summary

Class actions are complicated, but they’re often an effective way to make several claims collectively against one or a few wrongdoers. If you think a class action may be best in your case, you should speak to a lawyer. If you get notice of a class action that might affect you, you may also want to see a lawyer to find out whether you should participate in the lawsuit.

[updated April 2013]

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The testing of the claims in a court proceeding at a formal hearing before a judge with the jurisdiction to hear the proceeding. The parties present their evidence and arguments to the judge, who then makes a decision resolving the parties' claims against one another that is final and binding on the parties unless successfully appealed. See "action," "appeal," "argument," "claim," "evidence" and "jurisdiction."

In law, the re-examination of a term of an order or agreement, usually to determine whether the term remains fair and appropriate in light of the circumstances prevailing at the time of the review. In family law, particularly the review of an order or agreement provided for the payment of spousal support. See "de novo," "family law agreements," "order" and "spousal support."

A court proceeding in which one party sues another for a specific remedy or relief, also called a "lawsuit" or a "case." An action for divorce, for example, is a court proceeding in which the claimant sues the respondent for the relief of a divorce order.

(1) In law, an unintentional act or failure to act arising from a misunderstanding of the true state of affairs, from ignorance, or from an error not made in bad faith. (2) In contract law, an unintentional misunderstanding as to the nature of a term agreed to in a contract that may justify setting aside all or part of the contract. See "bad faith" and "contract."

Acts or omissions that are contrary to legislation, the common law, or that are immoral or unethical even if not necessarily contrary to a legal principle. See "lawful."

(1) The assertion of a legal right to an order or to a thing; (2) the remedy or relief sought by a party to a court proceeding.

In law, a calculation of the allowable legal expenses of a party to a court proceeding, as determined by the Supreme Court Family Rules. The party who is most successful in a court proceeding is usually awarded their "costs" of the proceeding. See "account," "bill of costs," "Certificate of Costs or Expenses" and "lawyer's fees."

An award of money payable by one party to a court proceeding to another, usually as compensation for loss or harm suffered as a result of the other party’s actions or omissions. In family law, damages are usually awarded to one party in compensation for breach of contract or spousal abuse. See "breach of contract" and "tort."

In law, (1) the whole of the conduct of a court proceeding, from beginning to end, and the steps in between, may also be used to refer to (2) a specific hearing or trial. See "action."

A person licensed to practice law in a particular jurisdiction by that jurisdiction's law society. See "barrister and solicitor."

(1) In law, a court proceeding; a lawsuit; an action; a cause of action; a claim. (2) A historic decision of the court; case law. See "action," "case law, " "court proceeding," and "precedent."

A resolution of one or more issues in a court proceeding or legal dispute with the agreement of the parties to the proceeding or dispute, usually recorded in a written agreement or in an order that all parties agree the court should make. A court proceeding can be settled at any time before the conclusion of trial. See "action," "consent order," "family law agreements" and "offer."

A person appointed by the federal or provincial government to manage and decide court proceedings in an impartial manner, independent of influence by the parties, the government, or agents of the government. The decisions of a judge are binding upon the parties to the proceeding, subject to appeal.

A judge's conclusions after hearing argument and considering the evidence presented at a trial or an application; a decision, the judge's reasons. A judge's written or oral decision will include the judge's conclusions about the relief or remedies claimed as well as the judge's findings of fact and conclusions of law. A written decision is called the judge’s "reasons for judgment." See "common law," "conclusion of law," "finding of fact" and "final judgment."

To determine the proper value or worth of something. A lawyer's bill may be assessed by a registrar to determine the actual amount the client should pay. See "appraisal."

(1) Information which establishes or tends to establish the truth of a fact, or (2) the conclusion of a logical argument. See "evidence" and "premises."

Facts, or proof tending to support the existence of facts, presented to a judge at a hearing or trial. Evidence can be given through the oral testimony of witnesses, in writing as business records and other documents, or in the form of physical objects. Evidence must be admissible according to the rules of court and the rules of evidence. See "circumstantial evidence," "hearsay" and "testimony."

A mandatory direction of an arbitrator, binding and enforceable upon the parties to an arbitration proceeding, made following the hearing of the arbitration trial proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to challenge or appeal the award in court. See "appeal," "arbitration," and "family law arbitrator."

Under the old Divorce Act, the schedule of a parent's time with their children under an order or agreement, replaced with "parenting time" and "contact" in the new Divorce Act. Access usually referred to the schedule of the parent with the least amount of time with the child. See "contact," "custody" and "parenting time."

A judge of the superior courts of British Columbia, being the Supreme Court and the Court of Appeal.

An application to a higher court for a review of the correctness of a decision of a lower court. A decision of a judge of the Provincial Court of British Columbia can be appealed to the Supreme Court of British Columbia. A decision of a judge of the Supreme Court can be appealed to the Court of Appeal for British Columbia. See "appellant" and "respondent."

A mandatory direction of the court that is binding and enforceable upon the parties to a court proceeding. An "interim order" is a temporary order made following the hearing of an interim application. A "final order" is a permanent order, made following the trial of the court proceeding or the parties' settlement, following which the only recourse open to a dissatisfied party is to appeal. Failing to abide by the terms of an order may constitute contempt of court. See "appeal," "consent order," "contempt of court," "decision" and "declaration."