By: Micheline Chevrier
Who is a “representative plaintiff”?
In a class action, the representative plaintiff is the individual who commences an action on behalf of a class of similarly situated individuals. Theoretically, the class may be as small as two individuals who would be represented by the representative plaintiff, but in reality, the class is usually made up of hundreds, thousands or tens of thousands of people. It is not uncommon for there to be more than one representative plaintiff.
The first step is to sign a retainer agreement with the law firm that has decided to take on the class action (“class counsel”). The retainer agreement will set out the fees that counsel will seek at the end of the case. Often, the fees are calculated as a percentage of the anticipated recovery of the action (a contingency fee agreement). A judge will determine the appropriate fee after a settlement or trial. The fee in the retainer agreement is only one of many factors the judge will take into account.
The lawyers will draft and issue a Statement of Claim which lays out the facts that are alleged and the award being sought from the defendant(s). The proposed representative plaintiff’s name will appear on the lawsuit and materials, and it is their personal situation that will be described in this document as being representative of the claims of all the other proposed class members.
Certification and Court’s Determination of Suitability of the Representative Plaintiff
Once the claim has been issued, the first major procedural step in a class action is usually “certification”. This is a motion brought on the basis of affidavit evidence. Class counsel will seek an order from the Court that says that this case is appropriate to proceed as a class action. At this point, the representative plaintiff will have sworn an affidavit to support the motion. The lawyers generally take the lead in drafting those materials but should do so in close communication with the representative plaintiff.
A person does not become a representative plaintiff until the Court certifies and approves them as an appropriate representative of the class based on the requirements found in s. 5(1)(e) of the Class Proceedings Act (“CPA”). The representative plaintiff must fairly and adequately represent the interests of the class, have a plan for pursuing the action (class counsel takes the lead on this), and must not have a conflict of interest with any class members.
The Supreme Court of Canada in Western Canadian Shopping Centres Inc. v Dutton stated that the proposed representative need not be “typical” of the class, nor the “best” possible representative. The Court should be satisfied however, that the proposed representative will vigorously and capably prosecute the interests of the class. Generally, suitability of the representative plaintiff is not the largest hurdle to the certification of a class action. Nevertheless, there are situations where the Courts have determined the proposed representative plaintiff to be unsuitable. For instance, in Sondhi v Deloitte the Court directed that the proposed representative plaintiff be replaced. Justice Belobaba stated that the proposed class members are entitled at the very least to a representative plaintiff who can be counted on to take her job seriously, review key documents and demonstrate an appropriate level of interest in a class action that is being brought in her name. In Chartrand v General Motors Corporation, the proposed representative plaintiff’s lack of participation in the decisions relating to the litigation and poor understanding of the issues led to a finding of unsuitability and ultimately, certification was dismissed.
Responsibilities and Duties to Class Members
Class action litigation is unique in that class counsel takes the lead and takes their instructions from the representative plaintiff. The various obligations and responsibilities associated with being a representative plaintiff may include the following: instructing counsel; reviewing the Statement of Claim; taking part in oral and/or written discovery; taking part in cross-examinations; swearing affidavits; expressing opinions to class counsel; participating in settlement discussions; and communicating with class members and the media. Ultimately, the representative plaintiff must consider the interest of the class, not just their own.
Perhaps the greatest responsibility of the representative plaintiff arises if and when a settlement agreement is reached between the parties. At that point, class counsel will recommend a proposed settlement agreement as being fair, reasonable and in the best interests of the class. Thereafter, the representative plaintiff will have the opportunity to express their thoughts and determine whether to sign off on the settlement. Class action settlements must be approved by the Court. The representative plaintiff should be aware that there is a possibility that some class members will be unhappy with the settlement agreement and may formally object to it. The settlement must be in the best interests of the class members.
Costs and Financial Assistance for Representative Plaintiffs
If the case is unsuccessful at certification or trial, or at any step along the way, the representative plaintiff may be ordered to pay costs to the defendant, which can be in the hundreds of thousands of dollars. The other class members are not responsible for these costs. Usually, class counsel will agree in the retainer agreement to pay any such costs on behalf of the plaintiff. Alternatively, the Law Foundation of Ontario administers the Class Proceedings Fund (“CPF”) which is available to assist representative plaintiffs in financing disbursements used for the advancement of a class action. It also provides an indemnity against cost awards. In return for this indemnity and funding, the CPF receives a 10% fee of the net settlement fund available for distribution to the class. Merits, risk and the public interest are factors considered by the Class Proceedings Committee when lawyers apply on behalf of the representative plaintiff for funding from the CPF.
Additional Compensation for Representative Plaintiffs
In some instances, an application may be made to the Court at the time of settlement in order for the representative plaintiff to receive additional compensation (an honorarium) for their work in the class action. This too shall need to be approved by the Court. The payment of an honorarium is an exception rather than the rule. An honorarium is awarded only if the representative plaintiff “has gone well above and beyond the call of duty”, according to Park v Nongshim Co., Ltd. Honorariums range from $2,000 to $20,000, but are usually less than $10,000.
What To Do Before You Become a Representative Plaintiff
The role of representative plaintiff is an important and challenging one. You give up making decisions about your own legal dispute with the defendant because you are acting on behalf of many. For example, you will likely be required under the retainer agreement to stipulate that you will not settle your own individual claim even if the defendant offers to compensate you fully for your losses.
Here are some steps to take to ensure you have all the information you need before deciding to act as a representative plaintiff:
- Get independent legal advice. Before signing the retainer agreement, ask to speak to another lawyer at a different firm. You can also get advice from the Class Action Clinic.
- Discuss timelines and expectations with class counsel. It is important to know how long the case might take, and the possible outcomes in the case, in order to have reasonable expectations. Not all class actions settle, but very few go to trial.
- Insist on getting a costs indemnity. Either class counsel, the CPF or a third-party funder should protect you against any costs orders.
- Class actions often attract media attention. Be prepared to have your name and the details of your claim discussed openly by the lawyers, in court rulings, and by the media, especially in high-profile cases.
For more information regarding class actions and the rights and responsibilities of representative plaintiffs, please do not hesitate to contact the Class Action Clinic.