Perspectives on class action proceedings reform in Québec
In light of recent steps taken to modernize the Québec justice system and increase its efficiency, the Université de Montréal's Class Action Laboratory prepared a report (the Report) commissioned by Québec's Ministry of Justice. The Minister of Justice announced on June 1, 2021 that it was launching a public consultation campaign on reform perspectives concerning class action proceedings, particularly with regard to delays, authorization (certification) of class actions, and approval of plaintiff’s legal fees.
In its consultation paper, the government states three objectives for its class action reforms and proposes different solutions to attain these objectives, based on the Report’s recommendations.
Objective 1 : Protect the resources of the province’s judicial system
The Report found that reform is much needed in terms of the management of judicial resources. For example, it found that the average time period leading to a final authorization judgment was approximately 2.5 years, and an additional duration of almost 4.5 years to reach a final judgment approving a settlement. As such, the first objective of the reform is to reduce delays by encouraging tighter case management.
Concretely, some of the proposed solutions to reduce delays include putting in place strategies aimed at encouraging tribunals and parties to actively manage their cases. These strategies include the adoption of practices like the establishment of tighter deadlines in case protocols to reach the authorization hearing within one year. The parties’ collaboration to precisely identify the issues in dispute, and their consideration of the possibility of settlement also constitute proposed strategies.
Objective 2 : Simplify and accelerate the authorization stage
Another important goal stated in the Report is to simplify and accelerate the authorization stage while upholding its primary objective of protecting class members, defendants, and the justice system as a whole. Currently, in Québec, class actions must first pass an authorization stage, by meeting the four criteria identified in article 575 of the Code of Civil Procedure (C.C.P.) :
- The claims of the members of the class must raise identical, similar or related issues;
- The facts alleged must appear to justify the conclusions sought;
- The composition of the class must make it difficult or impracticable to apply the rules for mandates to take part in judicial proceedings on behalf of others or for consolidation of proceedings; and
- The class member appointed as representative plaintiff must be in a position to properly represent the class members.
To improve the pace of class proceedings, there are two proposed avenues. First, the report suggests either the codification of a proportionality rule that would be applicable to all stages of a class action in addition to the principle set out in article 18 of the C.C.P., or the inclusion of a proportionality or preferability criterion to the existing authorization criteria. Both options aim to better filter cases to ensure a more appropriate use of judicial resources for the benefit of cases that require them.
The second avenue proposed by the Report is the integration of the authorization stage directly into the main proceeding, as well as the removal of the second criterion of article 575 of the C.C.P. As such, the proposed proceedings would follow these steps :
- Filing of the application to institute class action proceedings;
- Respondent's answer to the summons and disclosure of preliminary applications;
- Judgment on authorization and judgment on preliminary applications;
- Judgment on the merits of the class action.
Following the initial filing of the application to institute proceedings, the matter would be stayed awaiting an authorization judgment. Authorization would be granted based on criteria one, three and four of article 575 of the C.C.P. identified above, and the defendant would be able to raise inadmissibility arguments based on the lack of a prima facie claim. The application to institute proceedings would thus contain allegations not only concerning the authorization criteria, but also the merits of the dispute.
Objective 3 : Take a more critical look at legal fees
The third objective of the reform is to take a more critical look at the plaintiff’s legal fees while considering the proceeding as a whole, its importance, and the efforts undertaken. Currently, when a settlement is reached after the authorization stage, on average one third of the settlement amount is used to pay for the plaintiff’s legal fees. This reduces substantially the amount received by class members, which is why the present situation faces serious criticism. As a result, the Report suggests a series of elements that ought to be taken into consideration by courts when approving legal fees, such as the judicial stage at which the case is settled.
In evaluating the reasonableness of the fees, the Report notes that, currently, courts give too much weight to the risk factor and not enough to the hours actually worked. To determine a reasonable amount for the fees, one formula proposed by the Report is the multiplication of the number of hours worked by the lawyers’ hourly rate, and by a factor that accounts for risk.
The last avenue under consideration is the inclusion into the C.C.P. of the possibility of having a “friend of the court”, a third party that would assist the court in the approval of settlements ,and in the determination of the legal fees.
Any interested person is invited to submit comments and suggestions to the Québec's Ministry of Justice regarding the proposed avenues for reform at firstname.lastname@example.org by July 31, 2021.