What U.S. Counsel Needs to Know About Class Actions in Québec
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1 What U.S. Counsel Needs to Know About Class Actions in Québec Eighteen Questions and Answers Q.1 André, my clients have received by registered mail a motion for authorization to institute a class action filed in the Superior Court of Québec. Is this proper service? A.1 This is most likely proper service. Article 138 of the Code of Civil Procedure allows for service by registered mail under certain circumstances. When the respondent is domiciled in the United States, the practice followed by plaintiffs attorneys is to file an ex parte application to the clerk or prothonotary of the Superior Court asking for authorization to serve the motion for authorization to institute a class action by registered mail. These authorizations are granted as a matter of course. An entry of the authorization must appear on the copy of the motion for authorization to institute a class action. In that case, there is no doubt that this is proper service. Sometimes plaintiffs lawyers merely file the copy of the ex parte motion for a special mode of delivery in the same envelope with the endorsement of the clerk or prothonotary on the first page of the ex parte application for a special mode of service. Here, the letter of the law is not being strictly followed and, as a result, there is some doubt about this being proper service. Q.2 The motion speaks about authorization to institute a class action. Is this the same thing as certification? A.2 Basically, yes. The criteria used by the Court to authorize the institution of a class action are set out in Article 1003 of the Code of Civil Procedure: The court authorizes the bringing of the class action and ascribes the status of representative to the member it designates if of opinion that: (a) the recourses of the members raise identical, similar or related questions of law or fact; (b) the facts alleged seem to justify the conclusions sought; (c) the composition of the group makes the application of article 59 or 67 difficult or impracticable; and (d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately. As you can see, there are both similarities and differences with the U.S. rules. We use the word authorization instead of certification because there is no underlying action which is going to be certified as a class proceeding. If the motion for authorization to institute a class action is not granted, that is the end of the matter. Q.3 The proceeding is in French. Do we have the right to an English translation? A.3 No. Proceedings in the courts of Québec can be in either French or English. Rulings of the Supreme Court of Canada and the Federal Courts are issued in French and English. Some rulings of the Court of Appeal of Québec may at some point be translated into English, for example, in matters of corporate law. For more information on this topic see jugements.qc.ca. If you would like a translation of a legal proceeding, the best way is to get in touch with our translation department at Fasken Martineau. 1
2 Our translation department is made up of 14 in-house translators and revisors who have university degrees in translation or law and are members of either the Québec professional association of translators (OTTIAQ) or the Québec Bar. They specialize in legal translation: namely court judgements, administrative decisions and legal procedures. While most of the workflow is from English into French, two translators work exclusively from French into English, with the occasional assistance of two other team members as well as external translators. In addition, in order to ensure optimal quality, both from a legal and linguistic standpoint, the translation of all high-profile documents is always revised word for word by a second person who is either a senior translator, a lawyer from our team, or both. You can contact Yannick Pourbaix at for an estimate of the cost of translation and revision, by at: ypourbaix@fasken.com. Q.4 There is a Notice of Hearing with the motion for authorization to institute a class action. It says that we must appear in court in eight weeks. Do we have to actually appear in court on that date? A.4 No. This hearing is purely pro forma. Neither the petitioner nor the respondent will appear in court on that date. The clerk of the Superior Court, upon seeing this is a -06 file a motion for authorization to institute a class action will bring the file to the justice in charge of the Class Action Chamber, Justice Louis Lacoursière. Q.5 What happens then? A.5 Normally Justice Lacoursière will wait a few weeks in order to allow respondents the time to select a law firm to represent them. When appearances from law firms are filed in the Court record Justice Lacoursière will convene a case management conference, either at his office or by conference call. Typically he will ask us the three following questions: 1) Do you have an objection to the jurisdiction of the Superior Court to hear this dispute? This question is asked because, in some substantive areas of law, such as pension and benefits or employment law, the jurisdiction to hear the dispute belongs to another tribunal or agency. See for example Bisaillon v. Concordia University.1 Objections to the subject-matter jurisdiction of the Superior Court are normally adjudicated in limine litis. If we have an objection to the subject-matter jurisdiction of the Superior Court, there will usually be a hearing devoted only to this question. This is not common. 2) I plan to designate Justice XYZ to case manage the file. Do you have any objection? This question is asked because class actions files are case-managed, meaning that a judge is designated by Justice Lacoursière to hear the preliminary motions, if any, the motion for authorization to institute a class action, and the action itself on the merits if the institution of the class action has been authorized. We do not usually have any objection to the designated judge unless the judge was formerly with the law firm of plaintiff s attorneys. 3) Do you have any special requests? In most cases we will disclose that we are considering filing a motion to adduce relevant evidence as per article 1002 of the Code of Civil Procedure.2 1 [2006] 1 S.C.R. 666, 2006 SCC Article 1002 of the Code of Civil Procedure reads as follows: A member cannot institute a class action except with the prior authorization of the court, obtained on a motion. The motion states the facts giving rise thereto, indicates the nature of the recourses for which authorization is applied for, and describes the group on behalf of which the member intends to act. It is accompanied with a notice of at least 10 days of the date of presentation and is served on the person against whom the applicant intends to exercise the class action; the motion may only be contested orally and the judge may allow relevant evidence to be submitted. [Our emphasis] 2
3 Q.6 What is a motion to adduce relevant evidence? A.6 In Québec, a respondent to a motion for authorization to institute a class action does not have the right to file a formal, written contestation to the motion and, owing to the fact that the motion for authorization to institute a class action does not need to be supported by an affidavit from the petitioner, it follows that the respondent does not have the absolute right to examine the petitioner or to contradict the facts. The motion for permission to adduce relevant evidence is the procedural vehicle that you must use to present your side of the story. Q.7 That would raise due process concerns in the U.S. Has this system been challenged on due process grounds? A.7 Yes, but the challenge failed. See New York Life Insurance Company v. Vaughan.3 In that case, New York Life Insurance argued that the system contemplated by article 1002 of the Code of Civil Procedure was inconsistent with section 23 of the Charter of Human Rights and Freedoms.4 The Court of Appeal did not accept that argument. Q.8 How does that work practically speaking? When do you have to file a motion of that kind? A.8 In practice, we disclose to petitioner s lawyers that we will ask for permission to examine their client. In our experience, the more experienced the plaintiffs attorneys, the more likely it is that they will not resist petitioner s attempt to examine their client. Some plaintiffs lawyers, mostly inexperienced or ideological types, refuse, which means that we have to ask the court for permission to examine their client. Q.9 Are these permissions difficult to get? A.9 At present, most judges do accept that the respondent has the right to ask questions to the potential class representative to check if he or she is in a conflict of interest. If, for example, the person is a milk producer and he wants to act on behalf of a class of milk product consumers, he is in a conflict of interest.5 That takes care of the criteria of Article 1003(d) of the Code of Civil Procedure. Q.10 Can we ask questions about the size of the class? A.10 Questions about the geographical limits of a class are usually considered to be appropriate. A class must not be defined in a circular fashion and the courts want to work with a class definition that is ascertainable and they will allow questions on that issue. 3 [2003] J.Q. no 89, J.E , REJB (C.A.). 4 RSQ, c C-12. Section 23 of the Charter of Human Rights and Freedoms reads as follows: 23. Every person has a right to a full and equal, public and fair hearing by an independent and impartial tribunal, for the determination of his rights and obligations or of the merits of any charge brought against him. The tribunal may decide to sit in camera, however, in the interests of morality or public order. 5 This was so in Bouchard v. Agropur coopérative, [2006] R.J.Q (C.A.). 3
4 Q.11 How far can we go into asking questions about the merits of the case? A.11 The test for authorization is set in Article 1003(b) of the Code of Civil Procedure: The facts alleged seem to justify the conclusions sought In other words, petitioners have a relatively light burden. They only have to demonstrate that they have an arguable case assuming the facts that they have alleged are true. Q.12 Anything else? A.12 Most of the time you can ask questions to the proposed class representative to verify if he or she is an adequate representative or is in conflict with the interests of the class. Q.13 André, I am feeling pretty dejected. Do you have anything encouraging to say? A.13 Yes, two things will cheer you up. First, and it is a big one: we do not have jury trials in civil matters in Québec. Second, Punitive awards are lower and less frequent. You may want to read article 1621 of the Civil Code, which reads as follows: Where the awarding of punitive damages is provided for by law, the amount of such damages may not exceed what is sufficient to fulfil their preventive purpose. Punitive damages are assessed in the light of all the appropriate circumstances, in particular the gravity of the debtor's fault, his patrimonial situation, the extent of the reparation for which he is already liable to the creditor and, where such is the case, the fact that the payment of the damages is wholly or partly assumed by a third person. Q.14 Do you have a lot of statutes that provide for punitive damages? A.14 Not that many. One among them is the Consumer Protection Act.6 Q.15 What is the biggest award for punitive damages in Québec? A.15 The biggest award was $1,500,000 in Markarian c. Marchés Mondiaux CIBC inc.7 Subsequently, there have been two higher awards of $2,000,000, in Conseil pour la protection des malades c. Fédération des médecins spécialistes,8 and $2,500,000 in Hinse c. Québec (Procureur general),9 but these two cases are in appeal. Q.16 André, the plaintiff is asking for a national class of members but we are being sued in the Superior Court of Québec, can we ask that this case be moved to the Federal Court? A.16 This cannot be done. Our federal courts have a much narrower jurisdiction that the U.S. Federal courts. 99% of the class actions are litigated in the provincial Superior Courts. The Federal Court has a limited jurisdiction in competition law and in lawsuits against the Federal government. 6 R.S.Q., c P QCCS QCCS QCCS
5 Q.17 How come you can ask for a national class in a provincial court? A.17 Good question. This practice is probably unconstitutional but the issue has not yet been brought squarely before the Supreme Court of Canada. Q.18 Are the judges elected or appointed? A.18 All the judges of the provincial Superior Court and the provincial Courts of Appeal are appointed by the federal Minister of Justice. The same is true of the judges of the Supreme Court of Canada. They are appointed for life but they must retire when they reach the age of 75. 5
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