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Report on Class Proceedings |
Around the world in recent years, people and governments have grown concerned about "access to justice". A common finding is that the "average citizen's" access to justice is unacceptably limited in a number of ways. One of those limitations has been the difficulty encountered by individuals who may collectively have experienced significant loss, but who individually cannot justify the cost of litigation to obtain compensation.
In jurisdictions around the world the response to this issue has been, increasingly, the introduction of legislation to facilitate—indeed, to permit—the bringing of class proceedings by representative individuals. The Commission is of the opinion that the potential for enhancing access to justice for the citizens of Manitoba through the introduction of class proceedings legislation merits careful consideration.
Class proceedings legislation does not create any new legal liabilities. Rather, it creates a procedural device that allows a representative plaintiff to assert, on behalf of other plaintiffs, tortious, contractual, or other claims that the law already recognizes. Even so, class proceedings are quite different from other civil claims because, among other things: the proceedings directly affect persons not before the court (that is, all who may have a common claim); judges are more involved in managing the case, in part to protect the absent plaintiffs; and novel evidentiary and remedial rules often apply.
Modern class proceedings may currently be brought in Québec, Ontario, and British Columbia. The remaining Canadian provinces, including Manitoba, still operate under archaic rules which only permit class proceedings in very limited circumstances.
The class action rule in Manitoba has remained essentially unchanged since it was first developed as a rule of the equity courts. That rule became part of the English civil procedural rules, and was received into Canadian civil procedure in common law jurisdictions. The Supreme Court of Canada held in 1982 that this "class action" rule was simply inadequate to accommodate certain types of actions. The rule's deficiencies included, amongst others, the lack of provisions for service of notice, costs, opting out, modification of the discovery rules and approval of settlements, and the uncertain application of limitation periods and the res judicata doctrine. In short, the historic rule was simply inadequate in the context of modern, complex claims.
The class action rule was one of the very few areas left completely untouched when Manitoba's Queen's Bench Rules were revised and re-enacted in 1988. The current Manitoba rules on multi-party proceedings are a patchwork of provisions intended to deal with specific problems, and a poor substitute for a comprehensive class proceedings regime.
American courts were the first common law jurisdictions to permit modern class proceedings. Rule 23 of the United States Federal Rules of Civil Procedure was substantially broadened in the early 1950s and then again in 1966. Québec led the way in Canada in 1979 with legislation that is very similar to the United States Federal Rule. Ontario introduced The Class Proceedings Act, 1992 on 1 January 1993, and in 1995 British Columbia passed The Class Proceedings Act. The Uniform Law Conference of Canada adopted the Uniform Class Proceedings Act in 1996. The Ontario statute, which the British Columbia and Uniform Acts closely followed, is a conscious effort to avoid the weaknesses of the United States/Québec model. None of the other Canadian provinces have adopted a comprehensive class proceedings regime. Australia has adopted class proceedings legislation at the federal level and at some state levels, and both the English and Scottish courts are considering revising their class or grouped proceedings rules.
Class proceedings in tort cases include claims arising from single incident mass accidents where people who are gathered together (for example, as travelers, spectators, workers, or neighbours) suffer losses from the same occurrence. Tort-based claims for bodily injury arising from consumer products (for example, tobacco and asbestos) or, more commonly, medical products (for example, intra-uterine devices, breast implants, contaminated blood, jaw implants, silver mercury fillings, and heart pacemakers) have also been filed as class proceedings. Other tort-based class proceedings include claims of group defamation, nuisance, various statutory torts, damage claims for breach of Charter rights, claims arising from illegal strikes, negligent house construction, and negligent misstatement.
Contractual class claims have involved the prototypical consumer claims for defective products (for example, defective toilets, house siding, plastic blinds, and heaters), which usually involve relatively small amounts of money and are not feasible to pursue on an individual basis. Other contractual claims involve misrepresentations (for example, in the provision of services), wage and wrongful dismissal claims, and disputes over franchise agreements.
Securities cases arising out of a breach of fiduciary obligations, a failure to disclose, or negligent or misleading representations are very common in the United States because of the obvious plaintiff class: shareholders. Securities class proceedings claims in Canada, while not unknown, are not common, although this may change following the release of a recent report by the Toronto Stock Exchange.
Class proceedings against governments are relatively common, including, for example, the contaminated blood cases. The largest proportion of class actions in the United States involve actions against governments arising from breaches of civil rights and claims for equitable remedies on the grounds that the government had wrongfully acted or refused to act and had thereby infringed the civil rights of the class as a whole. Governments have also been the beneficiaries of class actions.
Not the least important rationale for the introduction of class proceedings legislation is the need to provide a means of redress to people whose injuries are insufficient, except in the aggregate, to make pursuing compensation in the judicial system economically feasible. As well, the judicial system is increasingly being called upon to do more and more with fewer and fewer resources, and class proceedings can help ensure that those resources are used as efficiently as possible. Class proceedings legislation will also result in wrongdoers being held accountable for wrongs that might not be pursued by individual victims, thereby enhancing the fairness of society as a whole.
The fact that Manitobans are now liable to have their rights affected by class proceedings brought in other jurisdictions, and possibly to be prejudiced as a result, is yet another compelling reason for the establishment in Manitoba of a modern class proceedings regime.
Finally, fears that introduction of such a regime may result in an explosion of spurious and extortionate litigation by entrepreneurial lawyers are, in the Commission's opinion, unfounded.
Manitoba's existing "class proceedings" procedures are insufficient to the tasks required of a modern class proceedings system, having been designed to solve other types of problems. For this reason, and for the specific reasons mentioned above, the Commission is of the opinion that Manitoba should take steps to provide its citizens with the protection of a modern class proceedings regime.
The Commission reviewed and discussed not only the existing Canadian and United States class proceedings legislation, but also the recommendations of a number of committees and commissions that have studied the issue of class proceedings legislation in recent years. On the basis of that review, the Commission has made 46 recommendations with respect to the establishment of a class proceedings regime in Manitoba. The primary recommendation, from which all others flow, is that the class proceedings regime should be modeled on the regime set out in the Uniform Class Proceedings Act. The Commission also recommends that the Court of Queen's Bench hear all class proceedings, and that the new procedure be brought in by way of legislation rather than simply changes in the Court of Queen's Bench Rules.
The issues discussed in the Report, and regarding which the Commission has made specific recommendations, include: requiring all class proceedings to be certified by the court before they are allowed to proceed; the nature of the certification requirements; description of the class or sub-class to be represented; requiring members of the class to opt out of the proceeding if they do not wish to participate; providing notice of the proceeding to class members; the tolling of limitation periods; costs and legal fees; the involvement of the court in controlling the process; dealing with issues that are not common to all class members; whether the judge hearing the certification application should also hear the trial; court approval of the termination of proceedings; the aggregate assessment of awards; the replacement of a representative plaintiff; and rules regarding discovery.
For the most part, the Commission's recommendations track those of the Uniform Law Conference, but there are instances in which its recommendations differ in order to tailor the legislation to Manitoba's unique circumstances.
The Commission has also included in its Report a draft Class Proceeding Act.
Report #100,
January 1999
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