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How Do Class Action Lawsuits Work in Canada?

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Published by:

Aisha Patel

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Reviewed by:

Alistair Vigier

Last Modified: 2023-07-23

Have you ever been curious about how class action lawsuits in Canada work? A lawsuit is sometimes the last and only means for people to seek recourse and compensation if they have suffered harm or wrongdoing. 

Society cannot function properly if people and corporations can do whatever they want with disregard for the rule of law. Individuals, companies, and governments must be held accountable for breaking contracts or causing harm or misleading the public. 

If enough people suffer harm due to a company’s misdeeds, they can band together as a class and seek damages in court on behalf of that class as long as they’re “similarly situated” and well-defined.

A lawsuit can be called action or a claim or a complaint, but civil lawsuits come in many forms and deal with all kinds of disputes depending on the “cause of action” as they’re known in legal parlance. 

A class-action lawsuit in Canada deals with harms suffered by identifiable groups of individuals or entities. Some class actions get filed on behalf of a few dozen people, while others involve classes with hundreds or thousands of people all claiming to have suffered damages. 

Microsoft settled several class actions in Canada

For example, Microsoft settled several class actions in Canada in 2020 after being accused in multiple provinces of conspiring to “illegally increase prices for certain Microsoft products,” including Office, Windows, Word, and Excel. The company settled for more than $400 million without admitting any wrongdoing. 

The class included Canadian residents who, between Dec. 23, 1998, and March 11, 2010, bought software licences for PC versions of Microsoft Word, Excel, Office, Works Suite, or Home Essentials applications software, or PC versions of Microsoft’s MS-DOS or Windows operating systems software.

Civil lawsuits are often between two or more parties, plaintiffs and defendants, unlike criminal proceedings where defendants are up against the state or the Crown. In Canadian criminal courts, the plaintiff is known as “Rex” or “Regina,” the King or Queen.

In the United States, criminal actions are brought on behalf of the people of a particular state unless the offence is being prosecuted by federal authorities. 

Legal Insights: Canadian Class Action Lawsuit Process

You cannot sue someone in civil court for committing a criminal offence, but you can sue someone for damages from a “tort,” which may have some overlap with criminal offences. You can, for instance, sue someone for assault if they injured you, a proceeding that is separate from a criminal charge arising from the assault. 

If you are seeking information about commencing a lawsuit in Canada, contact ClearWay Law today. We may be able to put you in touch with a lawyer who can help. 

Starting a class-action lawsuit in Canada is far from easy though. The class must be well defined and “similarly situated,” which means they’ve all suffered the same harm at the hands of the same party or parties.

In the Microsoft example mentioned above, the class included Canadian consumers who bought software product licenses at allegedly artificially inflated prices. 

Recently in Canada, major food retailers including Loblaws and Walmart got hit with class actions for illegally colluding and conspiring to fix the price of packaged bread products sold on grocery store shelves, allegedly making the companies billions in ill-gotten gains on the backs of ordinary shoppers. 

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Class Action Lawsuits In The Supreme Court

Commencing a lawsuit is often the last resort for people to get compensated for damages suffered at the hands of another person or company. This might be for a personal injury such as a slip and fall or being burned by hot coffee at a restaurant. 

Or it could be an employment lawsuit seeking damages for wrongful or constructive dismissal. Family law litigation, such as divorce actions, is also part of the civil law system in Canada, but it has its processes for disputes that arise among spouses over assets or child custody arrangements.  

However, the court process with all its paperwork and time and expense shares many common characteristics. With criminal law, court proceedings arise as a result of someone being accused of doing harm to society in addition to individual victims. You can go to jail for criminal law violations, but not civil law violations. 

Law enforcement won’t go breaking down doors if you’ve been ripped off by a contractor. They’ll tell you the matter is for a civil court to deal with, rather than a criminal court even in the face of alleged fraudulent activity. 

Balance of Probabilities

Criminal charges have to be proven beyond a reasonable doubt, whereas civil courts award damages based on a “balance of probabilities.” Judges and juries in those cases, therefore, choose a winner based on who they believe more than the other side, a much lower threshold than the criminal “beyond a reasonable doubt” standard. 

Defamation is another example of a cause of action for a civil lawsuit. Defamation, libel, and slander deal with written or spoken statements that are untrue and damaging to someone’s reputation. While you can’t libel someone with the truth, since libel deals with “malicious falsehoods,” defamation deals with the publicizing of information that could damage a person’s reputation, true or not. 

For damages to be awarded in those cases, you need to prove that the thing said (slander) or written (libel) was untrue. You also need to show there was reputational harm to collect damages for defamation. 

Class Action Lawsuits Canada

A lot of those actions fail quickly if they’re shown to be abusive to court processes or designed to silence valid criticisms. Defamation cases often fail when courts find them to be so-called SLAPP lawsuits, or “strategic lawsuits against public participation.” 

Unless you hire an experienced lawyer to handle such a case, you are likely going to lose. People who file lawsuits without hiring proper legal representation may be under the impression that it will save them money when dealing with the Supreme Court, but it ends up costing them their entire case no matter how valid their claims are. 

If you lose or make mistakes, the court can punish you and award cost orders, and default judgments, or make you pay court fees and interest. 

If you are convinced that you want to manage the lawsuit yourself, at least hire a lawyer for . When you want to see what appearing for yourself in court looks like, the courts are open. You can sit in the public area of a motion hearing or a trial. 

Top High-Profile Class Action Lawsuits in Canada

Sitting in on a real court proceeding will provide a lot more useful insight than binge-watching Law and Order. Courtroom dramas might make for good television, but they’re no substitute for real legal education and experience. 

For class action lawsuits, representing yourself is rather pointless. You would need millions in resources to pay all the expenses of a class-action lawsuit, which can take years to resolve. Meanwhile, the other members of the class would be getting a free ride on your back. It’s not realistic for the average Canadian.

Many law firms will take the initiative and investigate claims that end up spurring class actions and will find class members after the fact. Class actions can involve thousands of injured parties, though law firms will often find one or more “representative plaintiffs” to put their names forward as parties to the lawsuit. 

For example, a few years ago, several major auto parts manufacturers faced class actions in Canada for fixing the prices of automotive components that allegedly artificially raised the price of vehicles sold across the nation for years.

The defendants in those cases were numerous and varied, but many class actions filed in B.C. Supreme Court shared the same representative plaintiff. 

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Default Judgment in a Class Action Lawsuit

The first step of the civil procedure process is for the plaintiff to file a notice of claim.

In B.C. and elsewhere, notices of civil claims get filed under the Class Proceedings Act, which proposes to the court that the action is on behalf of a large enough group of people to warrant a class action rather than dozens or hundreds of near-identical claims that can choke a court’s docket needlessly. 

The defendant or defendants must then file the reply to the notice of claim, and most of the time they’ll just issue blanket denials of the plaintiffs’ or classes’ allegations.

Essential Facts about Class Action Lawsuits in Canada

If the defendant fails to respond to the lawsuits, the plaintiff or the class can seek a default judgment, meaning they can win the case without a trial simply because the other side failed to file anything in their defence. 

If you have been served with a lawsuit, known in B.C. as a notice of civil claim, ClearWay can put you in touch with lawyers in your province who can advise you about how to defend yourself.

There are strict timelines for replying, so it’s not a good idea to ignore a lawsuit and wait until the last minute to contact a lawyer, who will need time to work on the reply on your behalf.

A class action lawyer can help you with the following:

Discovery Process

Discovery is the process by which both sides provide their evidence to the other. This means that no party to the case is ambushed by evidence that could be crucial to a case’s success or failure.

Both sides need to have all the information that will be entered into court in support of their claims. 

Sometimes, as is often depicted in Hollywood legal dramas, defendants will “bury” the other side in discovery materials, sending massive amounts of documents to overwhelm their opponents, a shady tactic no doubt, but perfectly legal if it can be justified. 

The Role of Class Action Lawsuits in Canada’s Legal System

The discovery process also includes “examinations for discovery,” which involve interviewing parties to a lawsuit before a trial. Statements made during these examinations can be used as evidence in court in support of a party’s position. 

It’s a way to get evidence that may destroy the other side’s claim, especially if a plaintiff contradicts themself while under examination. These interviews can take many hours and add great expense as cases inch closer to a courtroom. 

But a lot of litigation matters settle after discovery because both sides realize that the time and expense of a trial could be ruinous. Many companies that face class action lawsuits will settle with class members without having to admit wrongdoing, as was the case for Microsoft. 

Class Action Lawsuits in Canada

Several high-profile companies have faced class-action lawsuits in Canada in the past few years.

Loblaws and Walmart and others for fixing the price of packaged bread products, which involved raids on some of the defendants by agents of the Competition Bureau of Canada for a conspiracy that spanned nearly two decades. 

E-commerce giant Amazon also faces a multi-billion-dollar class action in the Federal Court of Canada for allegedly violating the criminal prohibitions on price-fixing contained within Canada’s Competition Act.

Pros and Cons of Class Action Lawsuits in Canada

According to the plaintiffs, the $12 billion in damages they seek is the largest ever damages claim asserted under this legislation ever. The plaintiffs also signed a “litigation funding agreement” for millions of dollars to bankroll the litigation. 

The plaintiffs in the Amazon case claim the funding is “necessary to enable them to retain an expert who can understand the issues in this proceeding and who will be capable of dealing with the “vast quantities of data that are anticipated to be produced and analyzed in this case.”

The representative plaintiffs in the Amazon class action represent three different classes, though what they have in common is claiming they overpaid for products sold by Amazon at allegedly inflated prices due to anti-competitive agreements made with third-party vendors who use the Amazon platform.   

Class Actions In Federal Court

Like the case against Amazon, which was filed in the Federal Court of Canada, other big companies including Google, Facebook, and coffee-pod company Keurig are facing proposed class actions in the Federal Court of Canada.

Federal actions cover classes across the nation, rather than class actions filed in provincial Supreme Courts, which only cover classes of people in that province. 

The proposed class action against Keurig alleges that the company misled consumers about how easily recyclable its K-Cup coffee pods are, with the class claiming that contrary to the company’s claims.

“K-Cups are not widely accepted for recycling in municipal recycling programs outside the provinces of British Columbia and Quebec,” according to a statement of claim file in March 2022. 

Competition Act violations

In the Google and Facebook case, the online tech giants stand accused of wrongfully conspiring to “fix and maintain prices in the market for digital display advertising contrary to the Competition Act.”

The class in that case seeks more than $1 billion in damages for alleged Competition Act violations, according to a statement of claim filed in Toronto also in March 2022. 

Both these cases share the same Toronto law firm representing the classes.  That fact alone is quite telling about how class action lawsuits work in Canada.

Big law firms go after big defendants seeking big damages awards on behalf of class members, who individually may only get a few dollars each if the case is won or settled. But payouts to individual class members may seem small, but cumulatively, they can represent a big hit to a company’s bottom line and reputation. 

Class Action Lawsuits Canada

When it comes to class-action lawsuits in Canada, it’s plainly obvious that even the biggest companies operating in the country aren’t immune to malicious acts of greed for their profit at the public’s expense.

So, if you feel you’ve been ripped off or harmed by a corporation, or worse, a group of corporations, chances are you’re not alone and not in a class of your own, but you may be the first to recognize something afoot.

If that’s the case, contact ClearWay Law and we’ll do our best to connect you with lawyers who will spring into action, whether you’re a member of a class or not. 

We hope you found this guide on class action lawsuits in Canada helpful.

Author: Alistair Vigier is the CEO of ClearWay Law

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