CLASS ACTIONS GUIDE TO NOTICES TO CLASS MEMBERS

Transcription

1 CLASS ACTIONS GUIDE TO NOTICES TO CLASS MEMBERS

2 THE BARREAU S MISSION To ensure the protection of the public, the Barreau du Québec oversees professional legal practice, promotes the rule of law, enhances the image of the profession and supports members in their practice. Published: March 2016 by the Barreau du Québec ISBN (PDF): Legal deposit Bibliothèque et Archives nationales du Québec, 2016 Legal deposit Library and Archives Canada, 2016 Please note: Where necessary, the masculine form has been used in this guide to include the feminine, solely for easier reading.

3 Table of contents INTRODUCTION 4 WHEN When is a Notice to Class Members Required? 4 WHY Why Publish a Notice to Class Members? 5 CONTENTS What Should a Notice to Class Members Say? 6 DISTRIBUTION What Methods of Distribution Should Be Chosen? 7 LANGUAGE Why Plain Language? 8 CHECKLIST Contents 9 Dissemination 9 Language 9 APPENDIX Articles of the New Code 10 ACKNOWLEDGEMENTS 13 GUIDE TO NOTICES TO CLASS MEMBERS 3

4 introduction Since access to justice is fundamental for the judicial system, notices to class members are a key communication tool between stakeholders and the judicial world. Given that the Act to establish the new Code of Civil Procedure ( the new Code ) has recently come into force, the time is right to review how notices are drafted and sent. The new Code aims to ensure the accessibility, quality and promptness of civil justice as well as the fair, simple, proportionate and economical application of rules of procedure. It encourages the parties to exercise their rights in a spirit of cooperation and balance, as well as respect for those involved in the administration of justice. Notices to class members play a crucial role in class actions. These notices provide class members with information about their rights and allow the court to communicate with them at various stages of a class action. This guide is intended as a tool to assist practitioners in writing notices to class members. We recommend various methods of distributing these notices, so that they can reach as many class members as possible, whether at the authorization stage, after final judgment, at the individual recovery stage or at the appeal stage. (In appendix: the articles of the new Code referring to these various stages.) Since judges are equally concerned with reaching class members efficiently and properly informing them of their rights, they will most certainly be receptive to innovation with respect to the drafting and distribution of notices. when WHEN IS A NOTICE TO CLASS MEMBERS REQUIRED? The new Code provides for the publication of a notice to class members in the following cases: 1. The class action has been authorized (article 576, para. 2, and article 579) 2. A transaction, acceptance of a tender or an acquiescence will be submitted for the court s approval (article 590) 3. The judgment on the class action has become final (article 591, para. 2) 4. The judgment on the class action orders individual recovery (article 599) 5. An application for a declaration of lapse of the class action will be filed (article 583, para. 2) 6. A class member has appealed the Superior Court s judgment on the class action (article 603) In addition, the court may, at any time, order the publication or notification of a notice when it decides that it is necessary to protect the rights of the class members (article 581). For example, the court may do so following an amendment, or to remind class members of a fast-approaching deadline. 4 CLASS ACTIONS

5 why WHY PUBLISH A NOTICE TO CLASS MEMBERS? The court may order the publication of a notice to class members for various reasons. Here are the three main ones: 1. To inform them that a class action has been authorized and that they have the right to opt out from the class 2. To inform them that a transaction with the defendant will be submitted to the court s approval and that they have the right to object to it, and 3. To inform them of their right to file a claim in accordance with the procedure ordered by the court At the authorization stage, a class member s right to opt out of a class action is fundamental; nevertheless, in certain types of cases (for example, in cases relating to consumer rights) the right to opt out is almost never exercised. Publication in a newspaper may therefore be sufficient, as the notice has been posted publicly and each of the class members has had an opportunity to read it. As for the notice of a transaction, its purpose is to provide the class members with an opportunity to make a well-informed decision and, in particular, to decide whether they intend to object to the transaction. When the time comes to decide on the approval of the transaction, class members must be given the opportunity to exercise their right to opt out, if the class action has not yet been authorized. If a class action has already been authorized, the law does not provide for any additional right to opt out. However, within the transaction itself, the parties may provide for another opportunity to opt out. At the end of a class action that is granted, class members must be informed of the procedure for filing their claims. This last stage, wich marks the end of a long judicial process, may well be the most important one. Needless to say, notices to class members are particularly important here, and the methods of distribution will have to be chosen with great care. GUIDE TO NOTICES TO CLASS MEMBERS 5

6 contents WHAT SHOULD A NOTICE TO CLASS MEMBERS SAY? The new Code specifies the content of the notice to class members in the following four situations: 1. The class action has been authorized (article 579). The notice must provide a description of the class and any sub-classes. It must also indicate the main issues to be dealt with collectively and the conclusions sought, as well as the name of the class representative and their lawyers contact information. In addition, the notice should state the district in which the class action is to proceed. It must also mention that class members have the right to seek intervenor status in the class action. Moreover, the notice must state that class members have the right to opt out of the class and must specify the procedures to follow in order to do so, as well as the deadline for doing so. The notice must also mention that a member who is not a representative or intervenor cannot be required to pay the legal costs. It must also contain any additional information that the court considers useful, including the web address for the central registry of class actions. This registry is managed by the Superior Court of Québec. Finally, this article of the Code allows the court to authorize the publication of an abbreviated notice, should the court deem it appropriate to do so. 2. A transaction is submitted to the court for approval (article 590). The notice must state the time and place where the transaction will be submitted to the court for approval. It must specify the nature of the transaction and the method of execution chosen as well as the procedure to be followed by class members who wish to prove their claims. The notice must also inform class members that they may object ( assert their contentions ) before the court regarding the proposed transaction and the distribution of any remaining balance. 3. The judgment on a class action has become final (article 591, para. 2). The notice must inform class members of the substance of the judgment. 4. The judgment on a class action orders individual recovery of claims (article 599). The notice must indicate what issues remain to be decided in order to rule on individual claims of class members, as well as the information and documents that they must provide in support of their individual claim. In addition, all notices must also indicate the names of the parties and their lawyers contact information, as well as the name of the representative plaintiff (article 581). Moreover, note that the new Code provides that when a transaction in a foreign class action is homologated, or when a judgment in a foreign class action is recognized, the court must ensure that the notices given in Québec in connection with the class action were sufficient (article 594). Lastly, the parties must have the opportunity to present their arguments on the content of the notices and the method of distributing them to class members. At the authorization stage, it has become customary for practitioners to postpone the proceedings on notices until after the authorization judgment. 6 CLASS ACTIONS

7 DIStribution WHAT METHODS OF DISTRIBUTION SHOULD BE CHOSEN? The new Code provides that from now on, notices to class members will have to be published in the central registry of class actions (article 573). This online registry 1 is free of charge and enables the public to find all notices to class members in a single location, within a centralized source. The judgment authorizing a class action may also order the representative plaintiff or a party to provide information on a class action to the class members, including by setting up a website (article 576, para. 2). This provision is new. Since the number of internet users has increased exponentially over the past two decades, the legislator wants the internet a powerful information tool to be used for class actions. Moreover, the words setting up a website seem to refer to a site created specifically for the purposes of the class action. As for the rest, the parties are free to draw on their past experiences; however, they will always have to ensure that the form of the notice and the methods of distribution are adapted to the class action concerned. In addition to the publication of a notice in French, a notice in another language may be considered, depending on the composition of the class. At the outset, the characteristics of the members of the targeted class will have to be clearly defined (do we want to reach consumers, investors, seniors, people with cognitive difficulties or legal entities?). Then, the appropriate methods of distribution will have to be chosen, taking into account where these people are located. For example, a notice to inform residents living along a lake about the authorization of a class action in environmental law may be published in a local newspaper and posted on the bulletin board of the general store in the community. As much as possible, distribution methods that provide class members with direct access should be given preference. In general, notices to class members are distributed through the newspapers. This method of distribution should not be dismissed offhand, but it does have its limitations, as is sometimes illustrated by the very low take-up rates following a final judgment or a transaction. In our increasingly digital world, publication in hard copies of newspapers will eventually be a thing of the past. The parties are therefore encouraged to innovate and consider other means of distribution, and in particular, digital platforms and new technologies. For example, the notice may take the form of: a letter 2 sent by mail or by registred mail directly to the members last known mailing address 3 or to their address a notice included in bills or monthly statements of account directly sent to the class members a letter to third parties, such as doctors a letter sent to various organizations having some connection with the class members a text message sent to the class members mobile telephone number an announcement in specialized media an announcement in a local or large-circulation newspaper or magazine a press release a sign posted in a public place distribution of leaflets a television announcement a radio announcement a page posted on a website a video on YouTube In some cases, a postcard indicating a link to a website containing additional information may also serve as an abbreviated notice. 3. Canada Post offers an address update service that makes it possible to update data. GUIDE TO NOTICES TO CLASS MEMBERS 7

8 To ensure greater distribution of notices to class members, social media such as Facebook or LinkedIn may also be used, either to create a profile or to purchase advertising space. Sometimes, other social media such as Twitter will be more appropriate. Buying keywords through a search engine such as Google might also prove to be a good idea. An abbreviated notice to class members may display a QR code (bar code) to give the class members quick, easy access to the full notice. In some cases, it may even be useful to indicate a place (an office or other premises) where class members may obtain the notice to class members and obtain information on the class action. In all cases, the costs will have to be proportionate to the purpose of the notice and to the issues raised by the class action. In this regard, we should note that in almost every class action, it will be impossible to reach all of the class members. And lastly, in choosing the method of distribution, practitioners must ensure that the contents of the notice approved by the court cannot be modified. This help prevent the spread of inaccurate information. Press releases should be used with caution in order to avoid losing control over the information. LANGUAGE WHY PLAIN LANGUAGE? Article 1046 of the Code of Civil Procedure of 2003 provided that a notice had to be written in plain language that will be easily understood by the persons to whom it is addressed. Although this provision was not kept in the new Code, article 581 specifies that a notice that aims to protect the class members rights must be clear and concise. The notices must be written such that they can be well understood by the class members, and ideally on a first reading. The rules of plain language writing must therefore be followed. Grandiloquence and the lack of clarity that often comes with the use of legal jargon must be avoided. The message should therefore be adapted to the people to whom it is addressed and these people must feel that it is of concern to them. The message must be concise; only information that is necessary or required by the law should be included. Meticulous presentation is a must. Easy-to-read fonts should be chosen and the text should be well spaced out such that overall presentation of the document is simple. In addition, very small characters and the excessive use of upper case letters should be avoided. And lastly, a catchy (and sometimes even forceful) title will help attract the readers attention. Needless to say, the message will have to be issued in compliance with the laws and respect the parties obligations. It must not damage the defendant s reputation. It is better to choose simple terminology. Technical terms should be avoided, unless the notice is addressed to specialists. Overly long sentences should also be avoided. The drafters of the notice should write in the active voice rather than in the passive voice. 8 CLASS ACTIONS

9 CHECKLIST CONTENTS Names of the parties Class definition Frequently asked questions (omitted or summarized in an abbreviated notice) Conclusions sought (omitted or summarized in an abbreviated notice) Procedures involved in exercising the right to opt-out Explanation of class members rights and recourses Transaction procedures well explained or summarized Procedures involved in exercising the right to object to a transaction Claims process procedures Procedures involved in obtaining additional information Complete contact information on the lawyers involved DISTRIBUTION Mandatory publication in the central registry of class actions ( Consider the personal characteristics of the class members (e.g., geographic location, age, level of education) Reach as many class members as possible Proportionate methods of dissemination (costs) according to the objective of the notice By regular mail or , if appropriate, and proportionate Consider issuing an abbreviated notice Consider using new technologies LANGUAGE Catchy, meaningful title Easy-to-understand content Easy-to-see important information Easy-to-read fonts Avoid too many capital letters Avoid underlining and opt for bold type instead Well spaced-out text Short sentences Avoid obscure acronyms Avoid legal jargon Avoid all superfluous information GUIDE TO NOTICES TO CLASS MEMBERS 9

10 APPENDIX ARTICLES OF THE NEW CODE 573. A central registry of class actions is kept at the Superior Court under the authority of the chief justice. Applications for authorization and originating applications, pleadings filed in the course of a proceeding and notices to class members, as well as any other documents specified in the chief justice s instructions, are registered in the registry The judgment authorizing a class action describes the class whose members will be bound by the class action judgment, appoints the representative plaintiff and identifies the main issues to be dealt with collectively and the conclusions sought in relation to those issues. It describes any subclasses created and determines the district in which the class action is to be instituted. The judgment orders the publication of a notice to class members; it may also order the representative plaintiff or a party to make information on the class action available to the class members, including by setting up a website. The judgment also determines the time limit for opting out of the class. The opting-out period cannot be shorter than 30 days or longer than six months after the date of the notice to class members. The time limit for opting out is a strict time limit, although a class member, with leave of the court, may opt out after its expiry on proving that it was impossible in fact for the class member to act sooner When a class action is authorized, a notice is published or notified to the class members 1 describing the class and any subclass; 2 setting out the principal issues to be dealt with collectively and the conclusions sought in relation to those issues; 3 stating the representative plaintiff s name, the contact information of the representative plaintiff s lawyer and the district in which the class action is to proceed; 4 stating that class members have the right to seek intervenor status in the class action; 5 stating that class members have the right to opt out of the class and specifying the procedure and time limit for doing so; 6 stating that no class member other than the representative plaintiff or an intervenor may be required to pay legal costs arising from the class action; and 7 providing any additional information the court considers useful, including the address of the website for the central registry of class actions. The court determines the date, form and method of publication of the notice, having regard to the nature of the class action, the composition of the class and the geographical location of its members. The notice identifies, by name or a description, any class members who are to receive individual notification. If the court sees fit, it may authorize the publication of an abbreviated notice At any stage of a class action, the court may order a notice to be published or notified to the class members if it considers it necessary for the protection of their rights. The notice, which must describe the class and include the parties names, their lawyers contact information and the representative plaintiff s name, must be clear and concise. 10 CLASS ACTIONS

11 583. The originating application in a class action must be filed with the court office not later than three months after the class action is authorized, under pain of the authorization being declared lapsed. If an application for a declaration of lapse is filed, notice of the application, using the method of publication determined by the court, must be given to the class members at least 15 days before the date on which the application is to be presented. The representative plaintiff, or another class member asking to be substituted as representative plaintiff, may prevent the authorization from being declared lapsed by filing an originating application with the court office A transaction, acceptance of a tender, or an acquiescence is valid only if approved by the court. Such approval cannot be given unless notice has been given to the class members. In the case of a transaction, the notice must state that the transaction will be submitted to the court for approval on the date and at the place indicated. It must specify the nature of the transaction, the method of execution chosen and the procedure to be followed by class members to prove their claim. The notice must also inform class members that they may assert their contentions before the court regarding the proposed transaction and the distribution of any remaining balance. The judgment approving the transaction determines, if necessary, the mechanics of its execution The judgment on a class action describes the class to which it applies, and is binding on all class members who have not opted out. Once the judgment has become final, the court of first instance orders the publication of a notice stating the substance of the judgment and notification of the notice to each known class member When an application for the homologation of a transaction or the recognition of a judgment in a foreign class action is made to the court, the court makes sure that the rules of the Civil Code that apply to the recognition and enforcement of foreign decisions have been complied with and that the notices given in Québec in connection with the class action were sufficient. As well, the court is required to make sure that the requirements that governed the exercise of the rights of Québec residents are equivalent to those imposed in class actions brought before a Québec court, that Québec residents may exercise their rights in Québec in accordance with the rules applicable in Québec and that, in the case of collective recovery of claims, the remittance of any remaining balance to a third person will be decided by it insofar as the Québec residents share is concerned A judgment ordering individual recovery specifies what issues remain to be decided in order to determine individual claims. It sets out the content of the judgment notice to class members, which must include explanations as to those issues and as to the information and documents to be provided in support of an individual claim and any other information determined by the court. Within one year after the publication of the notice, class members must file their claim with the office of the court in the district where the class action was heard or in any other district the court specifies The judgment on a class action may be appealed as of right. If the representative plaintiff does not initiate an appeal or if the appeal is dismissed on the grounds that it was not properly initiated, a class member may, within two months after the publication or notification of the judgment notice, apply to the Court of Appeal for permission to be substituted as representative plaintiff in order to appeal the judgment. The time limit in this article is a strict time limit The appellant asks the court of first instance to determine the content of the notice to be given to class members. GUIDE TO NOTICES TO CLASS MEMBERS 11

12 12 CLASS ACTIONS

13 ACKNOWLEDGEMENTS The Barreau du Québec wishes to thank the Class Action Committee for its work on the preparation of this guide. CLASS ACTION COMMITTEE OF THE BARREAU DU QUÉBEC MANDATE Exchange information on the operations of courts to which class actions are referred Reflect on procedural tools facilitating the management of these class actions Evaluate the appropriateness of the Superior Court s rules of procedure in this type of action Propose amendments to both the Code of Civil Procedure and the rules of procedure GUIDE TO NOTICES TO CLASS MEMBERS 13

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