Q: I have been reading about class actions and don’t understand how they work. How does one get involved? How are they different from regular lawsuits?
A: The class action is a relatively new item in Canada; it is much more common in the United States. As with many areas of the law, class actions are entirely creations of statute law, so there will be differences from province to province. But there are some common features to all class actions.
A modern justice system needs a mechanism to deal with suits affecting the rights of large numbers of people. Class actions enhance justice by delivering it in a timely and fair manner and they also help modify the behaviour of large companies or governments.
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The class action is designed to allow two or more people to band together to take on a defendant who is usually larger, more sophisticated and with more resources.
Often these individual claims are too small to bring on their own but taken together, they have an impact. An example is the suit against video rental companies over late fees.
No one will start an action over $4 in late fees, but if you have a million such people, it may be worthwhile.
Also, class actions do not create new ways to sue. They are simply a procedure that allows people to sue and assert claims against a defendant to benefit multiple parties. The claims asserted are those that Canadian law already recognizes.
By spreading the potential benefit and expense among many people, individuals will be able to assert their rights and pursue actions that would otherwise be too expensive.
This procedure makes class actions distinct from regular actions. People who are not involved in the litigation and who do not appear in court are directly affected by the outcome of the case because they are members of a class, even though they are not direct litigants.
In short, these are cases with different rules, risks and benefits for all involved.
The key to a class action is cert-ification. This is done fairly early on, and it is the process by which a judge decides whether a matter proceeds as a class action or as a regular lawsuit.
The person suing has to show five things: that there is a legal basis for the suit; there is a readily identifiable class of plaintiffs; claims of the class members raise common issues; class action is the preferable procedure to use; and someone is willing to be named as representative plaintiff, and that person would fairly and properly represent the interests of the class as a whole.
All of these requirements must be met before the matter goes ahead as a class action. This is all quite technical.
Once certified, the matter proceeds much like a regular lawsuit. However, any person with a similar claim gets the benefit of a favourable judgment, even if he took no direct part in the lawsuit.
For example, if an implement manufacturer is successfully sued over a defective design, normally only the person suing can collect. But if it’s a class action, anyone owning that implement and experiencing the same problems can collect.
A class action cannot be settled without the court’s approval, to make sure that the interests of all class members are protected.
Sometimes members of a class are notified via mail, websites or print ads to alert the public to a class action. The court wants to ensure as many people as possible get notice of the matter.
Rick Danyliuk is a practising lawyer in Saskatoon with McDougall Gauley LLP. He also has experience in teaching and writing about legal issues. His columns are intended as general advice only. Individuals are encouraged to seek other opinions and/or personal counsel when dealing with legal matters.
