Legal and regulatory proceedings

Navigating legal or regulatory processes

Class actions: On the increase?

An article for physicians by CMPA General Counsel
Originally published March 2006 / Revised April 2008
IS0660-E

Abstract

Class actions are becoming more common in Canada.

Of interest to all physicians

What is a class action and how is it different from a traditional legal action?

In a traditional action, one or more plaintiffs sue one or more defendants for the damages they have suffered. A plaintiff generally cannot sue for the damages suffered by another person.

In contrast, a class action is a lawsuit brought by one or more persons on behalf of a larger group or class with a similar interest in a particular issue. It allows a representative claimant or plaintiff to claim against one or more defendants for damages suffered by many persons.

The representative is not only suing for him or herself, but for all the other members of the class. Generally, if the plaintiff is successful, monetary compensation will be awarded to all members of the class.

How does a legal action become a class action?

The jurisdiction in which a plaintiff decides to sue must specifically allow class actions. Class action legislation is now in place in most, but not all, Canadian provinces/territories. The legislation varies from one jurisdiction to the next, but the basic principles remain the same.

Class proceedings can be complex and the procedural details are beyond the scope of this article. However, there are some important concepts and steps that are essential to class proceedings that are worth mentioning.

Before a class action can proceed, a "class" or "classes" of plaintiffs or claimants must be clearly defined. Once the class is defined, the court must "certify" the class. In other words, the court recognizes the defined class as a legitimate class for the purposes of a class action.

For a class to be certified, most jurisdictions require the following criteria be met:

  • There must be a cause of action disclosed in the notice of class proceedings (e.g., a negligent act or omission by an identifiable party);
  • There is an identifiable class of two or more persons that would be represented by the representative plaintiff;
  • The claims of the class members raise common issues (i.e., similar facts, acts or omissions; same defendant(s); similar damages; etc.);
  • A class proceeding would be the preferable procedure to resolve the common issues; and
  • The class representative would fairly and adequately represent the issues of the class and there is a workable plan in place to do so.

If a court does not order the certification of the class, then the action cannot proceed as a class action. Without certification, every potential claimant would have to file his or her own individual lawsuit against the potential defendant(s), and each lawsuit would have to proceed by way of traditional litigation. This is why certification is key to the class action.

If the class action is allowed to proceed, all persons with similar facts are automatically members of the class. However, persons who are members of the class have the opportunity to opt out of the class proceedings. Those who do not opt out are bound by the judgment rendered in the class action and cannot bring another separate/individual action based on the same incident and damages.

How do class actions affect physicians?

There have been few class actions involving physicians to date. The vast majority of medical litigation proceeds by way of traditional litigation, usually because it is difficult to define a class of plaintiffs that meets the criteria outlined above. Medical cases tend to be case–specific such that there are not enough common issues to define a class. However, it is clear the potential exists for class actions in some medical cases. The CMPA will continue to monitor the litigation environment to assess the impact of class actions on physicians. A dramatic increase in class actions involving physicians is not expected.

Increased activity or just increased attention?

Class actions are complex and are often reported by the media because they generally involve a significant number of claimants and the total monetary award of a successful class action can be high. Class actions, like traditional litigation, can arise from a variety of situations, such as investment and securities fraud (e.g., Enron class action); product liability including pharmaceuticals (recently, Vioxx®, Baycol®, Accutane®, etc.) and medical devices (e.g., silicon breast implants); and hazardous waste and products.

Class actions allow large numbers of individuals to access legal remedies that would not otherwise be available because their individual damages are usually too low to justify the cost of a lawsuit. However, the cumulative total of all the damages for all the class members can be significant.

Now that more jurisdictions allow class actions, there will likely be increased class action activity in jurisdictions in which they were previously not allowed.

The bottom line

  • A class action is a lawsuit brought by one or more persons on behalf of a larger group or class with a similar interest in a particular issue.
  • The jurisdiction in which a plaintiff decides to sue must specifically allow class actions. Class action legislation is now in place in most, but not all, Canadian provinces/territories.
  • Before a class action can proceed, a "class" or "classes" of plaintiffs or claimants must be clearly defined and then "certified" by the court. The certification process in medical malpractice cases remains a challenge for plaintiffs.
  • There have been few class actions in the context of medical malpractice litigation to date.
  • More jurisdictions now allow class actions.
  • Class actions are complex and are often reported by the media because they generally involve a significant number of claimants and the total monetary award of a successful class action can be high.
  • There will likely be increased class action activity in jurisdictions in which they were previously not allowed.

 


DISCLAIMER: The information contained in this learning material is for general educational purposes only and is not intended to provide specific professional medical or legal advice, nor to constitute a "standard of care" for Canadian healthcare professionals. The use of CMPA learning resources is subject to the foregoing as well as the CMPA's Terms of Use.