Class Action Basics

A class action is a unique kind of lawsuit where one or more people sue the same defendant(s) on behalf of a group of people who have the same legal problem. The group of people is called the “class”. A class must include at least two people, but usually there are hundreds or thousands of people in a class.

What is a Class Action?

A class action is a type of representative action. This means that the class is represented by a person (or sometimes, more than one person) called the “representative plaintiff(s)”. The representative plaintiff’s role is to:

Advise and instruct their lawyers (known as “class counsel”);
Fairly and adequately represent the interests of the class; and
Understand the lawsuit.

A lawsuit can only become a class action if it is approved by the court through a process called “certification”. The test for certification is set out in the class proceedings statute. In Ontario, the statute is called the Class Proceedings Act, 1992 and similar legislation exists in the other provinces. If a judge concludes that the test for certification has been met by the representative plaintiff, the lawsuit can be called a class action or class proceeding.

Once a class action is certified, class members should decide whether they would like to remain in the class action or “opt out” before a court ordered deadline. If a class member does not optout they are bound by whatever court orders are subsequently issued in the case.

Certified class actions proceed similarly to other civil lawsuits and can likewise result in a settlement, judgment, or dismissal of the action. If a class action settles, any settlement must first be approved by the court before it goes into effect.

Other information about class actions to keep in mind:

A class action is a long process. From beginning to end the lawsuit will likely take two or more years.
Not all lawsuits get certified as class actions. Roughly ¼ lawsuits fail at the certification stage, and the litigation effectively ends.
A class action that is certified is more likely to settle than to go to trial. If the class action settles, specifics of the claim will not be argued in open court.
As a class member, you are not automatically guaranteed money upon settlement or favourable ruling from the court. Additional steps may be required such as proof of purchase or proof of damages.

Class Member Rights

As a member of the class, you do not actively participate in the case. However, this does not mean you do not have rights as a class member.

Notice

A class member must be given notice once a class action is certified. The notice will include:

A description of the class action;
Information on how to opt out of the class action; and
The contact information of class counsel, among other things.

Notice can take many forms, such as through print advertising, by mail or on a website. The form of the notice will be decided by the court.

Class members must also be given notice of proposed and/or approved settlements or judgmentwhich sets out additional steps class members can make, such as participating in a settlement approval hearing and/or a claims application process.

Opting-Out

Most class action jurisdictions in Canada are “opt-out”. This means people are automatically part of a class action without taking any steps to be included. However, an individual class member may opt out of a class action if they wish. A notice will usually explain how a class member can opt out, or the Class Action Clinic can assist you. There are many reasons why a person may choose to opt out, but the most common is so that they can pursue a lawsuit on their own.

If you do not opt out by the deadline set by the court, then you will automatically be included in the class.

Objections

All settlements for class actions must be approved by the court. A class member has the right to officially object to a settlement they find unfair or inappropriate. Typically, information about how to officially object, including any deadlines, will be found in the notice, on the class action’swebsite, or can be determined by contacting class counsel. The Class Action Clinic can also help class members get information about a proposed settlement and determine if they wish to support or object to the settlement.

Rights Upon Settlement

A class member must be informed of any settlement that is made, and what is required to make a claim under the terms of the settlement. It is up to the court to decide the method of providing this notice of settlement and how class members can go about claiming their money. The Class Action Clinic can help class members make their settlement claims.