How class actions work
Class actions are no longer a novel concept in Canada. While each provincial regime differs, businesses are regularly faced with an onslaught of class actions across the country, often within days or hours of a negative story going viral on social media or on news sites. It is therefore imperative to know what your options are.
A class action (or "class proceeding") is a civil lawsuit brought by one or more persons, called representative plaintiff(s), on behalf of a much larger group of people, the Class Members. Their claim must be certified by a Court, thus certification is the most important step of the entire case. In order to become certified, the Class Members must prove that:
1. Their claim has at least one valid cause of action (a set of facts sufficient to justify a right to sue);
2. There is an identifiable class of two or more persons;
3. The claims made by these Class Members raise common issues;
4. A class action is indeed the preferable procedure for resolving the common issues; and
5. The representative plaintiff adequately represents the interests of Class Members and does not have interests in conflict with those of other Class Members, and has a workable plan for advancing the case.
Certification is the major area of contest - it is usually preceded by a number of steps, such as discovery and cross-examinations, experts' testimonies, etc. If certification is defeated, the lawsuit typically dies. If certification cannot be defeated, appeals or even a move to decertify or to modify the certification exist.
Assuming certification cannot be defeated, several options still exist, including decertification (to undo the certification process), appeals (to the province's Court of Appeal, and ultimately, the Supreme Court of Canada), and settlement.
Regardless of settlement, there remain the issues of costs, the plaintiff lawyers' fee entitlements, class notification procedures, and residual issues.