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Canada

Canada’s class action practice is well developed, one of the most advanced in the world, with specific legislation in most provinces. Québec enacted Canada’s first class action laws in 1978, followed by Ontario in 1993, and British Columbia in 1995. Most class action litigation is filed in those three provinces. The expectation for individual protection under class action law was expanded by the passage of a Canadian bill of rights in 1982, the “Charter of Rights and Freedoms.”
Unlimited types of civil remedies, including damages, can be pursued in Canadian class actions. Canadian law does not require that proof of common issues predominate, although it is a factor that can be considered. Some provinces eliminate the need for proof of individual damages for certain claims by allowing a cause of action for “waiver of tort.”

In Ontario and Québec, government funding exists for representative litigation.

References:

• W.A. Bogart, Jasminka Kalajdzic, and Ian Matthews, “Class Actions in Canada: A National Procedure in a Multi-Jurisdictional Society?” a national report for the conference “The Globalization of Class Actions,” held in Oxford, England, on December 12–14, 2007 (co-sponsored by Stanford Law School and the Centre for Socio-Legal Studies of Oxford University). This report (available at http://www.law.stanford.edu/classactionconf) contains Web site addresses for the class action laws of Québec, Ontario, and British Columbia.
• McCarthy Tétrault (LLP), Defending Class Actions in Canada. 2nd ed. (Toronto, ON: Commerce Clearing House, 2007).
• Sylvie Rodrigue and Randy Sutton, “Class Action Litigation in Canada,” International Litigation News, September 2007, 23. (This newsletter is published by the International Bar Association, Legal Practice Division, http://www.ibanet.org.)

(This information was updated May 2008.)

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USA

Class action practice has existed in parts of the United States for more than 100 years. It came into its modern form with the amendments to rule 23 of the Federal Rules of Civil Procedure in 1966. Most, if not all, of the 50 states have developed their own class action jurisprudence, but they look to federal law for advisement when an issue has not been developed in state law.
An individual complaint is filed and includes class allegations that, if proven, will justify certification of a class. A class action does not truly come into being until a class is certified. A defendant can challenge the sufficiency of the class allegations at the pleading stage. The parties then conduct class certification discovery to determine whether the elements for certification have been met, and a class certification hearing is held. In general, the elements for obtaining certification are as follows:

• Commonality. The determination of commonality is made by the proof of common legal and factual issues predominating (51 percent or more) over the proof of the individual issues. However, courts may certify an “issue-only” class if at least one issue is in common (an issue that may be only a minor fraction of the universe of proof) and certification will benefit the litigation and the remaining individual claims are manageable.
• Ascertainability. The criterion for ascertainability is that class members will be identifiable if a class is certified; although, they need not have been identified by the time of the class certification hearing.
• Numerosity. This element exists when class members are so numerous that individual joinder is impractical. There is no bright-line distinction for numerosity, although 30 or more class members usually is considered sufficient.
• Typicality of the class representative. The proposed class representative must hold a claim that is typical of the class, so the representative is motivated to protect the best interests of the class.
• Adequacy of representation. The choice of class representative and counsel must demonstrate that the class representative will be a good fiduciary for the class and the proposed class counsel is qualified to represent the class.
• Superiority. This criterion is met if the class device is superior to other methods of group litigation, such as joinder or consolidation. If the first five elements are shown, then superiority will almost certainly exist.

If a class is certified, formal notice must be given to potential class members. Most American class actions use the opt-out method, whereby a person who receives notice of a pending class action is considered to have joined the class unless they affirmatively opt out by a return notice. The opt-in method is used in some cases. The court supervises the content and method of notice.

The class certification hearing, often held a year or more after the case has been filed, effectively concludes most cases. Typically the parties will settle the case either immediately before or immediately after a certification hearing. Less than 1 percent of filed class actions proceed to trial, in part due to extensive pretrial fact discovery and in part to avoid the risk of a large win or loss.

Settlements must be approved by the court; and if approved, notice must be given. Settlement approval proceeds in two steps: (1) preliminary approval by the court, after which notice is given for the class to comment on the settlement and to opt in or opt out if that has not yet occurred; then (2) a final approval hearing after the responses of the class have been received and evaluated. Typically, the settlement agreement provides for claims administration proceedings and protocols.

The court must approve attorney fees to class counsel and any incentive payments to the class representative. Contingency fees are permitted in U.S. courts, although the court in a class action need not award the percentage that was agreed upon in the retainer agreement. Many courts use a lodestar approach to set a fee, multiplying a reasonable hourly rate by the reasonable number of hours invested in the case to calculate the lodestar, then using a “multiplier” to either increase or decrease the lodestar based on performance.

As a general rule, each side pays for its attorney fees unless a statute provides for an award. The prevailing party may recover other allowable costs.

Class action fact questions are usually tried to a jury unless the parties waive a jury.

(This information was updated May 2008.)

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