Part B - Requirement for Certification or Authorization
The first issue in any proposal for class action legislation is whether there is a need for a preliminary step in the process called "certification" or "authorization". In Quebec, a class action cannot be instituted without the prior authorization of the court. Under the Ontario Act, the proposed British Columbia Act and Federal Rule 23, a member of the class may commence the action, but then must apply to the court for an order certifying the proceeding as a class proceeding and appointing a representative plaintiff. Outside Quebec and Ontario (and soon British Columbia), the existing law on class actions is set out in Rules of Court in terms similar to the following Saskatchewan provision:
70.Where there are numerous persons having the same interest in one cause or matter, including actions for the prevention of waste or otherwise for the protection of property, one or more of such persons may sue or be sued, or may be authorized by the court to defend in such cause or matter, on behalf of or for the benefit of all persons so interested.
This Rule does not require judicial approval before a class action can be undertaken by a plaintiff.
Amendments to the Federal Court of Australia Act in 1991 established a procedures for what it calls "Representative Proceedings". It does not include a certification process. It relies instead on a number of other protections for absent class members and defendants:
*requiring the court to fix a date before which class members may opt out;
*allowing the court to order, where it is in the interests of justice to do so, on its own motion or on application by the respondent, that a proceeding not continue as a representative proceeding;
*allowing a group member to apply to the court to have another group member substituted as the representative party where the representative party is not adequately representing the interests of the group members;
*allowing the court, on its own motion or on the application of a party or group member, to make any order appropriate or necessary to ensure that justice is done in the proceeding;
*requiring the approval of the court before the proceeding may be settled or discontinued; and
*requiring that group members be given notice, in a form approved by the court, of the commencement of the proceeding and their right to opt out.
In Sweden, as well, the proposal of their law reform commission is that class action legislation be implemented that does not include a certification procedure.
In 1994 the Scottish Law Commission published a discussion paper entitled Multi-Party Action: Court Proceedings and Funding. After reviewing the class action procedures in the United States, Canada and Australia, they suggested that a class procedure be established in
Scotland that includes a certification procedure. They suggested four criteria for certification:
*there are so many potential pursuers that it would be impracticable for all of them to sue together in a single conventional action;
*they are an identifiable class whose claims give rise to similar or common issues of fact or law;
*a class action is the preferable or superior procedure for the fair and efficient determination of the issues;
*the representative pursuer will fairly and adequately protect the interests of the class on the common issues.
They also suggest that the procedure be based on opting in rather than opting out.
The main reason usually cited for including a certification requirement is to ensure that the interests of absent class members are protected. The certification process also protects defendants from unsubstantiated claims. The Ontario L.R.C. made this comment on this issue:
the fact that class proceedings are capable of having an adverse binding effect upon absent class members who have no control over the proceedings would seem to justify the imposition of procedural safeguards to protect against inadequate self-appointed representatives. Such safeguards are unnecessary in individual suits, where the litigant has some opportunity to supervise the proceedings. The greater complexity of class actions also justifies special safeguards for the courts, the public and defendants.2
The report on class actions provided to the Uniform Law Conference in 1988 also cited the following advantages of a certification process:
*it acts as a screen to potential abuse of the process;
*up to that point, certification requirements existed in every other jurisdiction that had enacted modern class action procedures;
*it is a counter-balance to other reforms that might be seen as favourable to class members, (for example, special costs rules);
*certification protects class members by ensuring adequate representation of their various interests.
In recent years, the need for certification is starting to be questioned. Prior judicial approval is a departure from the practice governing individual suits. Prior approval places an additional burden on class representatives and the courts. It may impede the access to justice goal of class action reform. Some argue that, with adequate provision to permit opting out, certification is redundant. In an article appended to the 1988 report on class actions provided to the Uniform Law Conference, Andrew Roman put the argument as follows:
The process of certification denies a fundamental interest: the interest of a prospective plaintiff in bringing his or her dispute before the court in the most efficient and effective manner, in the judgment of the plaintiff's counsel. Anything but the traditional A versus B litigation is treated as if it were a legal freak, a Frankenstein monster so dangerous that it must be kept in a cage until the plaintiff (or plaintiff's lawyer) has devoted a massive investment of time and money to a largely irrelevant ordeal. This procedure imposes an anomalous type of reverse onus. Rather than the plaintiff bringing the action in the normal course on the theory that it is, after all, the plaintiff's case, he or she must first discharge a very onerous burden of evidence and argument. The purpose of certification appears to be to force the plaintiff to commence the action on bended knee; before the case even begins, he or she is put on the defensive. No other type of plaintiff is required to go through this kind of torture test in order to obtain a day in court. The root of the problem is not this or that part of the certification test but the process of certification itself. 3
Roman's opinion appears to rest on the statement that "it is, after all, the plaintiff's case". That statement ignores the fact, however, that it is not just the plaintiff's case. If the plaintiff wanted to bring the case for his or her benefit alone, the certification procedure would not be required. Rather, the procedure is required because the plaintiff wants to take on the case for the benefit of other persons. The court, in effect, is playing a parens patriae role with respect to those other class members by reviewing the plaintiff's proposal early on in the process to ensure that absent class members' interests are being properly protected. In addition, where there is a departure from the normal rules of cost, as in the British Columbia and Ontario legislation, is makes sense to allow the court to decide whether or not a class proceeding is the appropriate procedure for resolution of the dispute.
In a paper prepared for a legal education seminar in Toronto in May 1994 Yves Lauzon, a noted class action expert who specializes in class actions representing petitioners only, expressed the opinion that, as a result of recent, more liberal interpretations of the authorization requirements of the Quebec Code, those provisions were no longer causing difficulties, and the need for this preliminary step could no longer be questioned. 4
*That a certification procedure be included as a preliminary step in a class action.