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Executive Summaries Nov 2, 2021

Submissions to the Québec Ministry of Justice on Proposed Class Action Reforms

In response to the public consultation process on possible reforms to the class action regime, our partners André Ryan and Shaun E. Finn have filed submissions to the Québec Ministry of Justice.[1]

This public consultation – which arises out of a research mandate given to the Class Actions Lab of the Université de Montréal and Professor Catherine Piché’s report of September 2019 (the “Report”) – is both timely and welcome.

The class action has evolved considerably since it came into force in 1979. From a novel procedure, it has become an integral part Québec’s legal framework and has played a meaningful role in advancing judicial economy, access to justice, and behaviour modification.  The increasing number and size of class actions mean that the legislature, the judiciary, the legal profession, and all of society have a vested interest in ensuring that it be as effective and resilient as possible. It is also important that the Québec class action be fully consistent with the culture shift that is embodied by the current Code of Civil Procedure (“C.C.P.”)  and advocated by the Supreme Court of Canada.

While we commend the Report for its depth and creativity, however, we do not agree with all its observations and proposed reforms.

Reinforcing the Court’s Latitude at the Pre-Authorization Stage

Doing away with the authorization process as it currently exists and replacing it with a hybrid procedural mechanism at the merits stage (i.e. a truncated authorization test coupled with an elective application to dismiss) would not simplify or accelerate the litigation of class actions.

  • The problem of redundancy is largely illusory as few authorized class actions in Québec are subsequently targeted by an application to dismiss on the merits. Rather than create a hybrid procedural mechanism of the kind proposed in the Report, it would in our view be more efficient to explicitly allow defendants to bring applications to stay or dismiss as quickly as possible following the filing of an application for authorization of a class action on the basis of lack of jurisdiction, lis pendens, res judicata, incapacity, absence of interest, and/or abuse of procedure.
  • As the “arguable case” criterion of article 575(2) C.C.P. has generated some notable disagreement, one measured way of ensuring greater rigour and objectivity would be to replace it with the more robust criteria contained in article 225.4 (par. 3) of the Securities Act.
  • The hybrid procedural mechanism proposed by the Report would reverse the onus of demonstration that has existed since 1979 by placing it primarily on the defendant rather than the plaintiff, contrary to what is done in all other North American jurisdictions.
  • This disharmony with the other provinces will make it much harder for plaintiffs and defendants to co-operate across jurisdictions, even though many Québec class actions have a multijurisdictional dimension.
  • The adoption of the hybrid procedural mechanism would have the effect of setting aside 42 years of case law and require the courts to rebegin from scratch at great institutional cost.
  • Most of the statistics cited in the Report were collected before the creation of the Class Actions Chamber in the Judicial District of Montreal (by far Québec’s most active class action district), a body of specialist judges whose express purpose is to provide enhanced efficiency and consistency.

Rethinking the Assessment of Risk When Awarding Counsel Fees

While we make no specific submissions about class counsel fees, we note that, although the approach of Québec courts to fee awards is substantially similar to that of the other provinces, Québec class counsel do not face the prospect of obtaining a significant adverse costs award and do not have to contend with carriage disputes. This means that they generally assume less risk, a key factor courts consider when awarding class counsel fees.

Doing Away with Québec’s Controversial “First-to-File” Rule

It would be opportune to replace the “first-to-file rule” with a preliminary screening of competing applications for authorization by the case management judge in order to promote quality instead of simplistic celerity.

The Report and the consultation process to which it has given rise are very positive developments. The class action is an important procedural mechanism whose principle vocation is to provide access to justice to large numbers of consumers and ordinary citizens. It is therefore entirely appropriate to study the Québec class action more closely and, if necessary, adopt reforms in order to improve it. While some of the more substantial reforms outlined in the Report are certainly innovative, we respectfully submit that the hybrid procedural mechanism it proposes would not facilitate, streamline, or enhance class action practice in Québec. We submit that other, more measured changes are likelier to produce benefits for all stakeholders, most notably the class members themselves.

For more information on class actions, please contact BCF's Class Action Defence Team.

[1] André RYAN and Shaun E. FINN, "Chronique – Submissions to the Québec Minister of Justice on Proposed Class Action Reforms, BCF Class Action NetLetter, October 1, 2021 – Issue 34, pp. 1-7.

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