A Class Action Lawsuit in Canada is a type of civil lawsuit where an individual files an action on behalf of a group of people. Class Actions are incredibly valuable in situations where it would be too expensive for each individual that was harmed to sue individually.

A class action allows named plaintiffs to proceed with legal action on behalf of the entire group, or ‘class’, of affected persons (known as class members) making the proceedings financially feasible when they may not be otherwise. These common issues for the class members are advanced together as one case, providing each affected person with access to justice and holding the wrongdoers accountable.

Class Proceedings have numerous steps until a settlement or decision is reached:

1. A Representative Plaintiff files a proposed Class Action Lawsuit on behalf of a group of people who share a common issue. This document states what the action is alleging and explains how this wrongdoing occurred to a group of individuals. This document that is filed is known as the Notice of Civil Claim. After filing, the claim must be posted to a Canadian class action database.
2. The Defendant(s) file a response to this claim. Typically, they will deny the allegations made in the Notice of Civil Claim. This document is known as the Response to Civil Claim.
3. The Plaintiff, Defendant, and assigned Judge meet to discuss the steps of the case. This process involves the parties agreeing to a schedule for exchanging documents leading up to a Certification Hearing.
4. At the Certification Hearing, the judge is tasked with determining if a class action is the preferrable avenue and if the claim has a basis in fact.
5. After an action is certified, a new schedule leading up to trial is set, which once again involves the exchanging of documents between the parties.
6. A trial occurs to determine whether there are common issues between the individual class members and to determine if there is liability on the part of the defendant.
7. If so, the action moves to the damages stage, which likely results in settlement discussions. If a settlement is reached, the court must approve the class action settlement, following which a claims administrator is assigned to issue payment to all class members affected.

A class action involves three main stages:

1.  Authorization

• Initiating the class action: the authorization request

A class action must first be authorized by the court before it can proceed.

An individual who wishes to initiate a legal action on behalf of a group of people who share a common issue is called the representative. Thus, the class action process begins with the representative filing legal proceedings in court in their own name, in which they also seek permission to act on behalf of a group of people with a similar issue. This legal filing contains allegations describing the representative’s own situation and explains how others are in a similar situation. This document is called an Application for authorization to institute a class action.

Any proposed class action in Quebec must be registered in two official databases:

• The Class Action Registry of the Superior Court of Québec
• The Class Action Database of the Canadian Bar Association
• The judgment authorizing the class action

At the authorization hearing, the court must determine whether the proposed class action meets the four conditions set out by law. To be authorized, the court must be satisfied that:

• The issues raised by the application are sufficiently common to be decided together within a single legal action;
• The facts disclose an arguable case that appears to be serious;
• The composition of the group makes it impossible or impractical to proceed by mandate or by joinder of actions; and,
• The individual proposing to act as the representative is capable of adequately representing the interests of the group.

If the action is authorized by the court to proceed as a class action, the court appoints the representative, who may then officially pursue the case on behalf of the group. In its decision authorizing the class action, the court also defines the group and establishes the criteria a person must meet to be considered a “member” of the group.

• Notice to members and the right to opt out

Since a class action involves a collective aspect, members must be informed! Once the action is authorized, a notice to members is published so that the public can learn the details of the action, the criteria for being a member of the group, the contact information of the group’s lawyers, and how and within what timeframe to opt out of the class action.

Every member has the right to withdraw from the class action if they do not wish to be part of it. To do so, the notice to members specifies the deadline to opt out and the steps to follow. If you opt out, you will no longer be entitled to any compensation that may be awarded to members in the event the action is resolved in the group’s favor.

2. The Trial on the merits

Once authorized, the class action proceeds essentially like any other legal action. It is at the trial on the merits stage that the court must assess the validity of the lawsuit. The court will carefully examine all the evidence submitted by each party, including testimonies, expert reports, supporting documents for the allegations, and the arguments presented by the lawyers.

Due to the complex nature of the dispute and the collective aspect of the action, a class action trial can take many years, unlike an individually initiated lawsuit.

3. Resolution of the Dispute

• The Final Judgment

After the trial, the court will enter a deliberation period to consider all the evidence and arguments presented before issuing its decision on the merits. The court’s final judgment will resolve the dispute between the parties. If the decision is favorable to the representative and the group members, the judgment will outline the compensation each member is entitled to or establish a verification process to determine the amount of compensation each person is eligible to receive.

There is always the possibility, after the final judgment is rendered by the Superior Court, that a party may appeal the decision to the Quebec Court of Appeal and, eventually, to the Supreme Court of Canada. Each stage of appeal can take several years. In such cases, there will be additional delays for all members.

• Settlement Agreement

It is always possible for the action to be settled amicably without the need for a trial. The settlement agreement will provide, among other things, the compensation each member is entitled to, or a verification process to determine the amount of compensation each person is eligible to receive. In such a case, the settlement reached between the parties must be approved by the court, even if the representative agrees to the proposed settlement. At the settlement approval hearing, the court must be satisfied that the agreement is fair, reasonable, and in the best interests of all group members.

• Distribution of Compensation

In all cases, once the judgment is final, whether it is a decision rendered by the court or an approved settlement with no further possibility of appeal – the distribution of compensation begins.

The final judgment or the order approving the settlement will provide for the publication of a notice to members outlining the outcome of the class action, the compensation each member is entitled to, and the steps members must take to claim their money.