Class Action FAQ
What is a class action?
Class actions in Ontario are governed by the Class Proceedings Act, 1992. In general terms, a class action is a lawsuit in which one or more plaintiffs pursue legal claims on their own behalf and in a representative capacity on behalf of a class of similarly situated individuals or groups. Class actions are designed to have all claims of class members determined in one proceeding. Any settlement reached by the parties or judgment granted by the court is binding on all members of the class. To ensure fairness, any settlement reached by the parties must be approved by the court.
How is a class action started?
Class actions are commenced like all other litigation in Ontario. However, in order to proceed as a class action, a court order certifying the proceeding as a class action must be obtained. The court must be satisfied that the pleadings disclose a cause of action, that there is an identifiable class, that common issues are raised, that a class proceeding is the preferable way to resolve those issues and that there is a suitable representative plaintiff. If each of these criteria is met, the court will certify the action.
Who is the representative plaintiff?
The representative plaintiff is the class member who represents all member of the class in the lawsuit. The representative plaintiff must fairly and adequately represent the interests of the class and must not have an interest that conflicts with the interests of other class members. The representative must also prepare a litigation plan, with the help of his or her lawyers that sets out a workable method of proceeding with the action and for notifying class members of the proceeding. The representative plaintiff also instructs class counsel regarding the various decisions that must be made during the life of the action.
Representative plaintiffs perform a greater role and assume greater risks than do other class members. However, they usually reap greater rewards for their efforts if a successful outcome is reached. Anyone contemplating acting as a representative plaintiff should discuss the pros and cons with a lawyer before assuming the role.
How do I participate in a class action?
All identified members of the class are automatically included in the class action. However, individuals are free to opt out if they so choose. The court order certifying the class action will set a deadline for opting out. Individuals who choose to opt out are free to pursue their claims against the defendant(s) on their own. Legal advice should be sought before any decision is made to opt out of a class action.
Non-representative class members do not actively participate in the class action but do receive their respective portion of the proceeds flowing from a successful resolution of the suit.
What happens after certification?
Class actions are often settled before they ever get to trial. Any settlement reached by the parties must be approved by the court. If the action does not settle, it will proceed in the same way as any other civil litigation. The court will proceed adjudicate on the common issues. Issues that are not common to all class members will then be determined in accordance with the court’s direction.
What happens if the class action is successful?
Generally speaking, the amount of money paid to each class member if the action is successfully resolved, either by way of settlement or judgment of the court, will depend on the extent of the loss each member suffered.
What happens if the action is not successful?
In most lawsuits, the unsuccessful party must pay the successful party a portion of their legal costs. In a class action, any negative costs award is paid by the representative party and not by the other class members.
How and when are legal fees paid?
The legal fees in a class action are normally payable on a contingency basis. That is, the lawyers’ fees are only paid if the action is successful. The fees are deducted from the sum recovered in the action according to a fee arrangement that must be approved by the court before they are paid.
How do I know if a class action is for me?
Class actions are complex undertakings. Many factors must be taken into account before a decision is made to commence or participate in this type of proceeding. Legal advice is essential. We would be pleased to assist you in making any such decision. For further information, please contact: