Commencing a class action lawsuit can be a powerful way of seeking compensation for people impacted by a large-scale wrong such as corporate misconduct, product liability issues, or financial fraud. Class actions bring together multiple claims that would be uneconomical to bring on an individual basis. In this sense, class actions level the playing field and hold companies accountable for their wrongdoing.
Understanding the class action lawsuit process is essential for anyone considering filing a claim. This article outlines how a class action is started. It also provides some key considerations to keep in mind throughout the process.
Topics covered:
- Factors to consider when evaluating class action claims
- Considerations for choosing a class action law firm
- What is the role/responsibilities of the representative plaintiff in a class action?
- Are there any costs associated with starting a class action?
- How can I begin a class action?
Factors to consider when evaluating class action claims
Because we pursue class actions on a contingency fee basis (meaning we are only paid if successful), we are careful about what class actions we take on. When assessing whether we will take on a matter as a class actions, Siskinds LLPs experienced legal team will consider factors such as:
- Do the alleged wrongs give rise to a legal claim? Not all bad conduct gives rise to a valid legal claim for a class action.
- Did the alleged wrongs impact a large group of people? If only a handful of people are affected, it might be more efficient to pursue the claims through other judicial mechanisms, such as small claims court actions or test cases.
- What are the potential damages flowing from the alleged wrong? Class actions are resource-intensive and expensive to pursue. There needs to be large damages for class actions to make financial sense.
- Can a judgment be enforced? Does the wrongdoer have insurance or assets that can be collected against? Is the wrongdoer in a jurisdiction where it is difficult to enforce a judgment?
- Is there already a class action commenced in relation to the alleged wrongs? The Canadian class action database provides a listing of class actions commenced in Canada. Not all Canadian law firms comply with the requirement to post information about class actions in the database. Online searches may also help to determine whether there is an existing class action lawsuit in progress.
Understanding the experiences and perspectives of those who have been harmed is important and we do this by speaking with impacted people.
If we determine that the alleged wrong gives rise to a plausible cause of action, we seek to be retained by a representative plaintiff. The representative plaintiff is the person who brings the claim on behalf of the class playing a central role in the litigation process. Continue reading for more information about the role of the representative plaintiff.
Considerations for choosing a class action law firm
Having experienced class action lawyers counsel when taking a class action through the Canadian legal system is very important. Class actions are complex time-consuming and can take several years to reach an outcome. It is important to choose a class action law firm that has the experience, resources, and reputation required to reach a successful outcome.
Relevant class action expertise
There are various types of class actions and choosing counsel that have recognized knowledge and experience in a certain area is essential. For example, if you are a shareholder that has lost money because of the alleged wrongdoing of a public company, it makes sense to look for lawyers or a law firm that have successfully litigated securities class actions. Or, if you have been harmed by a pharmaceutical drug or medical device, you should look for a firm with a demonstrated history of successfully pursuing pharmaceutical litigation.
Resources and capacity of the law firm
Choosing counsel that has the resources to support the case from initial research through to settlement or a trial is an important consideration. Taking a class action from the research stage to a successful outcome requires the lawyers to invest significant amounts of time and resources. Typically, the lawyers are retained on a contingency fee basis, meaning that they fund the time and expenses, and are only paid in the event of success. Depending on the nature of the case, it can cost hundreds of thousands in expert fees alone to pursue the case to certification. The cost of a common issues trial is even higher. Some firms seek third-party litigation funding to help fund these costs.
Alignment with ethical standards
Finally, think about how well a lawyer or law firm has done litigating other class actions. How many cases have they resolved? Have they achieved reasonable outcomes? A proven track record demonstrates both legal expertise and the ability to achieve meaningful outcomes for large groups of claimants.
Overall, the purpose of class actions is to provide access to justice for a large number of people and to encourage businesses to be more fair and ethical in their dealings. Choosing experienced counsel, who also understand the importance of these values, is key to a successful resolution.
What is the role/responsibilities of the representative plaintiff in a class action?
Section 5 of the Ontario Class Proceedings Act notes that a representative plaintiff must:
- fairly and adequately represent the interests of the class;
- produce a method of advancing the proceeding on behalf of the class; and
- not have a conflict of interest with other members of the class.
The class proceeding legislation in the other Canadian provinces contains similar language.
A representative plaintiff does not need to have any special legal knowledge or training. They simply need a basic knowledge of the matters at issue and be able to provide instructions to the class action lawyers, as needed.
The lawyers do the heavy lifting in pursuing the class action and will typically seek to minimize the burden on the representative plaintiff.
Are there any costs associated with starting a class action?
The representative plaintiff is not responsible for the costs of starting a class action lawsuits. Class actions are usually handled on a contingency fee basis, meaning that the cost of taking the action to court is the responsibility of the law firm. Legal counsel will only be reimbursed for those costs, and paid legal fees, if a settlement is reached or there is a successful outcome at trial.
In some jurisdictions, such as Ontario, there are adverse costs. This mean that the losing party has to pay a portion of the winning party’s legal costs. Class Counsel customarily provide an indemnity against an adverse costs award, meaning that Class Counsel will pay any adverse costs in the place of the representative plaintiff. If Class Counsel is unwilling to provide an indemnity to a proposed representative plaintiff, the proposed representative plaintiff should seek independent legal advice before signing a retainer agreement.
Individual class members are also not responsible for paying lawyer fees or paying any costs if the class action is not successful. This structure ensures that affected individuals can participate in the class action without incurring personal financial risk, reinforcing the principle of access to justice.
How can I begin a class action?
Class actions are complicated legal proceedings against well-resourced defendants. The legal process can, at times, be overwhelming and confusing. Class actions involve coordinating claims for a large group of people, gathering evidence, navigating court procedures, and meeting strict legal requirements. If you believe you have been wronged, but have questions about where to begin, our dedicated class actions team is always available to discuss your concerns and determine if a class proceeding is the right course of action.