In Québec, the notable difference is that plaintiffs commence a proposed class proceeding by publicly filing an application for authorization to institute a class proceeding on behalf of the entire class. The plaintiff is only required to file their formal claim, and the defendants are only required to file a substantive defence, if the class action is authorized (similar to certification). In Québec, class action litigation follows a slightly different path:
- Filing of an application for authorization;
- Initial case management hearing and preliminary motions. In Québec, the defendants cannot file evidence as of right to challenge the authorization, they must seek permission to do so by way of an application for leave to examine the representative plaintiff or for leave to adduce relevant evidence. Jurisdictional issues may be raised either prior to the authorization or during the authorization hearing depending on the scope of the jurisdictional challenge. Note that as it concerns multi-jurisdictional class actions, the Code of Civil Procedure is clear to the effect that they do not constitute an automatic ground for the stay or discontinuance of the Québec proceedings;
- Oral arguments contesting the application to authorize the bringing of a class action (the Code of Civil Procedure specifically provides that applications for authorization can only be contested orally, which does not preclude the parties from filing written argument briefs); and, if granted,
- Filing of an Originating Application;
- Giving of notice of authorization and running of the opt-out period;
- Documentary and oral discovery;
- Filing of a statement of defence;
- Trial of the common issues; and
- Determination of any individual issues on individual causation and damages, if necessary.
The following sections discuss some of the major stages in class actions in more detail.
Pre-Certification Motions
Pre-certification motions are available in principle in all jurisdictions in Canada. They are more rare than in the U.S., though there is greater latitude for such motions in Ontario than in other provinces. Judges generally have discretion over scheduling motions and can refuse to hear motions until after certification, though some provinces have adopted legislative amendments to push courts to hear potentially dispositive motions (e.g. motions for summary judgment), or motions that can narrow the issues on certification, before certification. These motions can include:
- Jurisdiction: Motions by defendants to stay the proceeding for lack of personal jurisdiction over the defendant.
- Arbitration: Motions to stay the court proceeding in favour of arbitration, where the claims are covered by an arbitration agreement. These motions are increasingly common where claims relate to online services that are governed by terms of use containing an arbitration clause. Canadian courts are generally arbitration-friendly, though they will not enforce arbitration agreements in certain circumstances, including where the arbitration agreement is unconscionable or where a statute specifically exempts a type of claim from arbitration (notably claims under consumer protection statutes).
- Evidentiary issues: In Québec, the defendant can only file evidence in response to the authorization (certification) motion with leave of the court, so these types of motions are common in Québec.
- Litigation funding: Third-party litigation funding is also becoming increasingly common, particularly in the loser-pays costs jurisdictions in Canada. Many major international litigation funders are active in Canada. Some provinces also have public funding organizations, like the Class Proceedings Fund in Ontario or the Fonds d’aide aux action colectives in Québec, which can provide funding based on applications from class counsel. Like other funders, these public funders are generally entitled to recover a portion of any judgment or settlement. Third party litigation funding agreements in class actions require court approval, generally by way of a pre-certification motion. Courts have refused to approve funding agreements that contemplate the funder receiving too great a proportion of any settlement or judgment.
Motions on the sufficiency of the initiating pleading are generally dealt with at certification as the requirement to plead a reasonable cause of action is one of the criteria in the certification test in common law provinces, although a motion to strike the claim may be sequenced in advance where such a motion may be dispositive of the entire claim. In any event, the pleading standard in Canada is lower than in the U.S. In common law provinces, a pleading is generally deemed sufficient unless it is “plain and obvious” that it discloses no reasonable claim. This is a lower standard than the Twombly/Iqbal plausibility standard.
Pre-certification document production is not the norm and is granted only in exceptional cases. Because the certification stage is intended to be procedural, the threshold for production is high enough to protect that process from becoming bogged down by evidence that goes to the merits. In some provinces (e.g., Ontario, Saskatchewan, and Nova Scotia), the courts have been willing to make exceptions where evidence will assist in making a determination on certification, particularly in medical product liability cases.
There is no pre-certification oral discovery in class proceedings in Canada. The only examinations that may be permitted in the common law provinces and territories are cross-examinations upon filed affidavits and, in some cases, cross-examinations of non-party witnesses pursuant to summons issued in accordance with the rules of court. As mentioned above, leave to conduct a cross-examination is not required in some jurisdictions. In others, like British Columbia and Saskatchewan, absent agreement of the parties to a cross-examination, leave must be granted by the court. Discovery on the merits of the litigation is not permitted prior to the class certification motion.
Certification Motion (Common Law)
The common law provinces and territories, and the Federal Court, all have similar tests for a plaintiff to meet for the action to be certified as a class proceeding. Most common law jurisdictions have “opt-out” class actions regimes, so that if the court grants certification all the class members will be automatically bound by judgment on the common issues (and settlement) unless they pro-actively opt-out using a specified procedure.
The plaintiffs’ burden on certification is lower than in the U.S. In certain circumstances defendants will consent to certification, though it is also common for defendants to vigorously resist certification. Parties often file a significant volume of affidavit evidence on the certification motion, including expert evidence (notably related to damages).
The certification tests in the common law jurisdictions consider the same five criteria:
- Cause of action: The claim must disclose a reasonable cause of action. This is a low bar. The court will assume the facts pleaded to be true (unless ridiculous), and the plaintiff will succeed at this step unless it is “plain and obvious” that the claim as pleaded is doomed to fail.
- Identifiable class: The evidence must show “some basis in fact” that there is an identifiable class of two or more persons. The proposed class definition cannot be merits-based, and must be rationally connected to the common issues.
- Common issues: The evidence must show “some basis in fact” that: (1) the proposed common issues are common to the class members, and (2) the proposed common issues exist. The evidentiary threshold to establish existence is low, so to avoid impermissible attempts to try the merits at certification. To certify damages as a common issue, plaintiffs generally file expert evidence of a workable methodology to calculate damages on an aggregate basis.
- Preferable procedure: The evidence must show “some basis in fact” that a class action must be preferable to alternative types of proceeding, considering access to justice, behaviour modification and judicial economy. In Ontario, the legislation was recently amended to require a class action to be “superior” to all “reasonably available means” to determine class members’ entitlement to relief, and the common issues must predominate over individual issues. These are arguably defendant-friendly amendments.
- Representative plaintiff: The evidence must show “some basis in fact” that a proposed representative plaintiff must adequately represent the interests of the class, and present a workable litigation plan.
The “some basis in fact” evidentiary standard is a low bar for plaintiffs, though it requires some evidence. Defendants can defeat certification by showing “no basis in fact”, which is a high bar. Generally, Canadian courts are more plaintiff-friendly on certification than U.S. courts.
If the court grants certification, the plaintiffs are required to notify the class members either directly (where possible), by publishing notices (e.g. online or in press releases), or a combination of both. Presumptively, the cost of notice rests upon the plaintiff under the legislation, but this burden can be shifted to defendants.
In opt-out jurisdictions, the certification order will be followed by a period in which class members can opt-out of the class pursuant to procedures specified in the notice. After the opt-out deadline, all class members that have not opted-out will be bound by judgment on the common issues and any settlement.
Application for Authorization (Québec)
In Québec class actions are not individual actions that become class actions if certified, but are proceedings initially filed on behalf of the whole class. They may be struck entirely if the application for authorization is denied. The test for authorization of class proceedings in Québec share some similarities with common law jurisdictions, with some notable differences. The test for authorization of the class proceeding requires the court to determine whether:
- the recourses (i.e., claims) of the members raise identical, similar, or related questions of law or fact;
- the facts alleged seem to justify the conclusions sought (an “arguable case”);
- the composition of the class makes joinder difficult or impracticable; and
- the proposed representative plaintiff is in a position to represent the members of the class adequately.
In Québec, the representative plaintiff is not required to file an affidavit in support of the application for authorization the filing of a class action. The application for authorization states the facts giving rise to the proceeding, specifies the nature of the litigation for which the authorization is sought and describes the group on which the representative plaintiff intends to act. The facts alleged must be taken as true, unless there are speculative, opinions, or purely hypothetical. In which case, they must be supported by a “certain proof” to be taken as true. The representative plaintiff only bears a lower burden of demonstration, not the burden of proof based on the preponderance of evidence typically applicable to civil actions.
At the authorization stage, the defendant does not have the right to file a formal, written response to the motion, as it can only be contested orally. However, the judge may allow some evidence to be submitted. In Québec, there is normaly no discovery at the authorization stage. Nevertheless, the court may use its discretion to allow appropriate evidence, which may include an examination of the representative plaintiff. The defendant must specify the content and objective of the evidence they seek to adduce, and the examinations they want to conduct. The judge allows the motion where they determine that the evidence is necessary to assess the authorization criteria.
These specific rules, and the low threshold given the “arguable case” criteria in case law, make it challenging to obtain the outright dismissal of class actions at the authorization stage in Québec.
As in the other provinces, the judge hearing the motion issues a written decision as to whether to authorize the bringing of the action as a class proceeding. If the class action is authorized, the judgment granting the motion:
- describes the class whose members will be bound by any judgment; and
- identifies the principal questions to be dealt with collectively and the related conclusions sought (i.e. common issues).
At a later stage, the Court will order the publication of a notice to the members and specifies the date after which a member can no longer request exclusion (opt out) from the class.
Documentary and Oral Discovery
If the class action is certified (or authorized), the parties are generally required to negotiate a discovery or litigation plan that defines the scope of documentary and oral discovery.
In most common law jurisdictions, parties have a general obligation to produce all relevant, non-privileged, documents in the party’s power, possession or control, subject to proportionality. Relevance is generally based on the pleadings and the certified common issues. Notably, if the court has not certified damages as a common issue, a defendant may not be required to produce damages-related data and documents before the common issues trial, though courts can order production that is relevant to the claim as a whole.
In class actions in Québec, documentary production is based on requests from the opposing party, limited by relevance to the resolution of the common questions, privilege and proportionality.
Oral examinations for discovery are generally more limited in Canada than in the U.S. In most jurisdictions the default is that each party must only produce one witness to be examined, and some jurisdictions have time limits for examinations. However, corporate witnesses often have an obligation to seek information in the corporation’s possession, power or control (i.e. the witness’s evidence is not limited to their personal knowledge), which may result in several requests that will need to be answered and may be the source of follow-up questions.
Common Issues Trial and Individual Issues
Common issues trials are rare in common law Canada because most class actions settle. They are somewhat more common in Québec because the authorization threshold is so low. The judge can only grant judgment on the certified common issues, though plaintiffs can seek to amend the common issues in certain circumstances. It is also possible for the common issues trial judge to certify aggregate damages even if damages were not originally certified. The judgment on the common issues will bind all class members that did not validly opt-out.
In some provinces the case management judge either must be, or may be, the common issues trial judge, whereas in other provinces the case management judge cannot hear the common issues trial without consent of the parties. Civil jury trials are not available in Québec. Though civil jury trials are available in British Columbia and Ontario in certain circumstances, common issues trials in class actions are most likely to be heard by a judge alone.
If the plaintiff is successful on the common issues trial and any individual issues remain (e.g. causation and/or damages), the common issues trial judge has discretion to direct a process to determine the individual issues, including individual trials or an expedited process.
