Overview
You may have been one of the Facebook users who received an Autodeposit of $36.29 from MNP. That settlement was a result of a class action against social media giant Meta (Facebook’s parent company) related to its posting of Facebook users’ names and photos in sponsored stories without their consent.
The Facebook action exposed many Canadians for the first time to the class action, a type of civil litigation in which one or more individuals file a lawsuit on behalf of a group of people with a common cause of action.
Over the past decade, class actions have become increasingly common for a few reasons. One, amendments to legislation have made it easier to certify class actions. Two, class actions are more economically viable than each individual class member pursuing a civil lawsuit of their own.
What is a Class Action?
A class action is a type of civil lawsuit in which a plaintiff acting as a representative seeks relief on behalf of a class of individuals who share a common grievance.
Instead of each affected party bringing their own claims, a named plaintiff (the representative plaintiff) sues a defendant on behalf of many other unnamed plaintiffs (the class). If the class action is successful, the class shares in any resulting remedies.
The remedy in the Facebook class action was a $51 million settlement that was paid out to users in four provinces.
Class actions can improve access to justice for plaintiffs who may not otherwise have the economic resources to seek legal redress. Judicial findings from class actions apply to all affected parties and class members, which maintains consistency in court decisions.
In Manitoba, the class action process is governed by The Class Proceedings Act. A class action begins when a statement of claim is filed in the Court of King’s Bench. The style of cause for the claim must name a representative plaintiff (or plaintiffs), each of whom is a member of one or more of the class action’s proposed class(es).
Certification
Before a class action can move forward, the representative plaintiff must make a motion to the court for an order certifying the proceeding as a class action and appointing a representative plaintiff.
Although an order certifying a proceeding as a class proceeding is not a determination of the merits, it does mean that the class action has been screened in, and that it met specific criteria.
As part of the certification process, the court will ask:
- Do the pleadings disclose a reasonable cause of action?
- Is there an identifiable class of two or more persons?
- Do the class members raise a common issue?
- Is a class action the preferable procedure for the fair and efficient resolution of the common issue?
- Is there a person who is prepared to act as a representative plaintiff? Will this person fairly represent the interests of the class? Has this person produced a plan that sets out a workable method of moving the class action forward on behalf of the members and keeping them apprised? Is this person free of any issue that conflicts with the interests of other class members?
If the court finds the criteria have been met, it will issue a certification order.
A class action certification order is a critical document. It describes the class by establishing its identifying characteristics, appoints the representative plaintiff, states the nature of the claims and the relief sought, sets out the common issues, and states how a member may opt-out and by what date. The court may include any other provision it considers important.
Despite the court’s gatekeeper or screening function on certification motions, the bar to meet the above elements is a low one. As a result, class actions are often certified. Defendants can consent to class action certification as a whole, or agree with the plaintiff that some of the proposed issues be certified and oppose others.
“Opt-Out”
How potential individuals come to be a part of a class depends on provincial legislation. Manitoba has “opt-out” class action legislation. This means that generally speaking, all class members meeting the definition arising out of certification will automatically be included in the class action unless they opt out of it, without needing to take steps of their own to join the class. As a result, all class members who do not opt-out will be bound by judicial decisions.
The mechanism to opt out is established in the certification order. Under section 19 of The Class Proceedings Act, providing notice to class members that a proceeding has been certified is the representative plaintiff’s responsibility. Notice must also provide information on opting out, and the consequences of doing so.
Previous Manitoba certification orders have required class members to complete and submit “opt-out forms” in order to be excluded from the class action.
Post-Certification
Once a class action has been certified, it moves toward a trial on the common issues identified in the certification order.
Parties in a class action have the same discovery rights as other litigants under Manitoba’s Court of King’s Bench Rules. The defendant is granted the right to examine the representative plaintiff for discovery. With leave from the court, they may also examine other class members.
Carriage Motion
Sometimes, competing class actions are filed at the Court of King’s Bench. Overlapping plaintiff classes may be seeking compensation for the same alleged damages.
If counsel acting for the proposed plaintiffs in competing class actions cannot cooperate, the court will determine which action moves forward; in other words, which proposed plaintiffs take on “carriage” of the class action.
A carriage motion takes place before certification. To determine which of the competing actions is to move forward, courts consider multiple factors. Most importantly, they look to the class’s best interests and fairness to the defendants. The “losing” action is then stayed, while the “winning” action continues to the certification process.
Multi-jurisdictional Class Actions
Because of the nature of class actions, class members can be spread across provinces. In 2019, the Manitoba Court of King’s Bench adopted the Canadian Bar Association’s (CBA) protocol for multi-jurisdictional class actions.
To assist lawyers filing class actions, the CBA created the National Class Action Database which provides access to lawsuits currently underway across Canada. The purpose of the database is to reduce uncertainty for those presumptively included in more than one class action. Unfortunately, lawyers may still face multi-jurisdictional challenges. The database is a voluntary initiative and does not include a comprehensive listing of all class actions.
Approval of Settlement
Although some class actions do go to trial, the majority settle. In this regard, a class proceeding differs from an individual civil lawsuit in that a class action settlement must be approved by a court on the terms it finds appropriate.
A settlement of a class action that is approved by the court binds every member of the class or subclass who has not opted out of the class proceeding, but only to the extent provided by the court.
Class Action Defence
Class actions can take an economic and reputational toll on an organization. If your organization has been named in a class action, engaging an experienced lawyer is critical.
Fillmore Riley’s Class Action Defence Practice
Fillmore Riley’s Class Action Defence lawyers are regularly engaged to defend some of the most complex class action litigation in Manitoba. Whether we are negotiating settlements or vigorously defending you in court, we deliver seamless, attentive client service with the goal of bringing about the best possible outcome.