Understanding Class Actions in Canada


What Is a Class Action?

A class action is a type of lawsuit that allows one or more plaintiff to seek relief for themselves and for others who have similar claims against the same party. This allows the court, in a certified class proceeding, to resolve the claims of a large number of people in a single proceeding.

Class actions are a relatively recent type of lawsuit in Canada despite having been used in other countries for centuries. Their origins can be traced to old English common law from the 13th century. In Canada, Quebec was the first province to amend its Code of Civil Procedure in 1978 to include provisions specifically for class actions cases. Ontario followed in 1993, and British Columbia adopted similar legislation in 1995. Currently, all Canadian provinces have some kind of class action legislation with the exception of Prince Edward Island.

Generally speaking, there are three primary goals of class action proceedings in Canada:

  1. Judicial economy: Since class action cases consolidate the claims of multiple class members, this allows the courts to avoid unnecessary duplication, freeing up judicial resources that can be directed at resolving other conflicts.
  2. Access to justice: Allowing fixed litigation costs to be divided over a large number of plaintiffs, class actions improve access to justice by making economical the prosecution of claims that would otherwise be too costly to prosecute individually.
  3. Behavior modification: When large corporations and government entities are held accountable for their wrongdoing, a key byproduct is that future bad behaviour is also deterred. Some class action lawsuits garner media attention, shining a spotlight on the defendants and their misconduct.

The goals have been defined by the Canadian courts over the years and have been intentionally crafted to allow uniquely Canadian interpretation. Further, class actions are an essential tool for social change. The lawsuits have served to expose a wide range of issues including inequitable policies, negligence, and misconduct perpetrated by defendants like large corporations and government agencies. Examples of notable class actions include:

  1. Tobacco Class Action Lawsuit: Tobacco companies intentionally misled the public about the safety of cigarettes and the results of smoking. Class action lawsuits served as a tool to hold those companies accountable. In fact, the largest class action settlement in international history was a $206 billion payout that forced Philip Morris and other large tobacco companies to answer for their years of wrongdoings.
  2. Indian Residential Schools Lawsuit: This class action case centered around the system of residential schools created for Indigenous peoples in Canada. The abuse suffered by the children at these schools was horrendous. A survivor of the abuse sought justice for the pain and suffering she and others experienced, and a class action lawsuit against the Canadian government was initiated. In 2006, the Indian Residential School Settlement Agreement created a fund of $1.9 billion, resulting in Canada’s largest class action settlement.
  3. Volkswagen Emissions Scandal: In 2014, it was uncovered that automobile manufacturer Volkswagen had intentionally misled consumers by installing software and other devices designed to record much lower emissions testing results than their vehicles actually produced. The estimated number of vehicles affected in Canada was 20,000. Four years later, a $290 million class action settlement was reached in the Canadian courts.
  4. Royal Canadian Mounted Police Harassment, Abuse, & Discrimination: Since 1974 when the Royal Canadian Mounted Police began officially accepting female recruits, female officers and other non-policing staff members have suffered sexual harassment, abuse, and discrimination perpetrated by their male colleagues.  A class action was brought on behalf of thousands of female officers and another class action, brought on behalf of civilian employees and volunteers. These class actions have resulted in settlements of more than $100 million.
The three primary goals of a class action in Canada. | Klein Lawyers

How Does a Class Action Case Begin?

A class action lawsuit begins when a person (or several people) files a claim on behalf of themselves and others who are in a similar situation against the same defendants. After the claim is filed, a judge must make a ruling that the case should proceed as a class action. If the judge agrees, the class is considered certified.

Once the class action has been certified, notice must be given to all potential class members, allowing for individuals to opt out of the class proceeding if they wish. Individuals who opt out can bring a separate lawsuit on their own behalf and are no longer part of the class action. Those individuals who do not opt out and are considered members of the class are bound by whatever judgement or settlement is reached in the class action. The claim then continues on to either a trial on the merits of the claim or to a negotiated settlement.

How Long Does a Class Action Lawsuit Usually Take to Settle?

Because class action cases involve complex legal and factual issues, they can take years to resolve. They may ultimately either be settled out of court (but still presented for approval) or tried in court with a judge providing the decision.

How Do I Join a Class Action?

Technically speaking, individuals do not have to do anything to join a class action. Essentially, anyone who fits the courts’ definition of the class is automatically included. However, as noted above, individuals may opt out of the action and any individual who chooses to opt out of the class by following the court’s specific instructions on how to be excluded after a class action has been certified is not part of the proceedings.

What Are the Responsibilities of a Class Member?

The class action is advanced by the lead plaintiff (called the representative plaintiff in British Columbia) who directs class counsel and the litigation. Typically, when a class is established, the counsel for the plaintiff establishes a website that allows class members to register their name, contact information, and provide information related to their claim. This website can serve to ensure that all class members receive notices about the case including direct notice of certification, trial results, settlement information, and any other important steps during the proceeding. In addition, notices are often published in newspapers.

Does It Cost Me Anything to Be a Class Member?

Class action cases are typically handled by law firms on a contingency fee basis. This means that the costs to litigate the cases are absorbed by the law firm and payment of legal fees is only due if a settlement is reached or a successful trial verdict is obtained. All legal fees of the class counsel must be approved by the court, which ensures that the fees are fair and reasonable.

How Do I Get Compensated Under the Settlement?

Once a resolution is reached for a class action, the settlement distribution process begins. This process can be quite involved and take many months. The court will typically set a deadline for class members to submit their claims. This usually requires a class member to provide proof that they fall within the defined class and to outline the injuries or damages they suffered.

A settlement fund is established and overseen by a court-appointed administrator. Money is disbursed to class members on an objective basis, taking into account the significance of the class member’s injuries or damages.

Does Klein Lawyers Handle Class Action Cases?

Klein Lawyers is one of the leading class action firms in Canada. David Klein, founder and partner of Klein Lawyers, has been recognised as one of Canada’s top class action lawyers by L’expert (Canadas Leading Source of Legal News & Information) and by Best Lawyers in Canada. David and his team have successfully recovered hundreds of millions of dollars for thousands of victims in a wide range of landmark class action lawsuits. They have the experience, knowledge, and passion to take on intimidating defendants on behalf of their clients.

Our current class action cases are on our website here.