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The Quebec Court of Appeal comments on the role of class action representative and interactions with class counsel, in the context of abusive proceedings

The views of the majority judges in this case are a useful reminder that the role of the class action representative entails responsibilities which could not be blindly delegated to the class counsel.

class action representativeIn a judgment issued on February 19, 2018 in the matter of Deraspe v. Zinc Electrolytique du Canada Ltée[1], the Quebec Court of Appeal (Justices Dutil and Roy concurring, with Justice Rancourt dissenting) confirmed the decision of the Superior Court declaring both class representative and counsel to be vexatious litigants and disqualifying them from the case. This led the majority of the Court of Appeal to make interesting comments on the role expected of the representative in the class action context.

Background

In August 2004, an accidental discharge of sulphur trioxide occurred at the Defendant’s refinery, in Quebec. Shortly after, a Motion to certify a class action was filed by Deraspe and his attorney. After a long and complicated procedural history, the class action was certified by the Superior Court in March 2012.

After certification, Deraspe asked the Court to add parent companies of the Defendant, alleging collusion and fraud to deprive the class members of an eventual compensation. Over the next years, Deraspe and his attorney multiplied proceedings in this regard. In March 2014, the Superior Court dismissed the claims against the third parties, a decision also confirmed by the Court of Appeal.

Further to three years of proceedings which were ancillary to the main issues raised by the class action, the Defendant presented a motion to disqualify Deraspe and his counsel given their abusive conduct and because they were not acting in the interests of the class members. In September 2015, the Superior Court found both plaintiff and his counsel to be vexatious litigants, confirmed that they were no longer in a position to represent the members adequately, and removed them both from the case, while taking measures to enable a new class representative to take over.

The Judgment of the Quebec Court of Appeal

The majority of the Quebec Court of Appeal confirmed the decision of the Superior Court in its entirety and dismissed Deraspe’s appeal. In the meantime, former class counsel was disbarred and her appeal became moot.

In their reasons, the majority judges did not find any reviewable error in the finding that Deraspe was not an « innocent victim » but that he acted together with his counsel.[2] The Court pointed out that a party could not distantiate him or herself from the missteps of his attorneys without proving his or her own personal diligence.[3] In this regard, Deraspe could not « hide » behind his counsel to excuse his own behaviour, while he participated in the conduct of the case and he was in a position to realize the improper behaviour of his attorney, as mentioned into some court decisions[4].

The majority reminds that the class representative is the fiduciary of the interests of the absent members, and is designated in view of his capacity to adequately manage the action.[5] He does not play a « walk-on role ». The class representative has the necessary authority to give instructions to his lawyer and he could replace the attorney if this decision is in the interests of the members.[6] To conclude otherwise would mean that a class action representative is the mere « puppet » of his attorney.[7]

At any stage of a class action, the Court may take measures in order to ensure the proper management of the case, and particularly in the context of abusive proceedings.[8] As a result, the majority of the Quebec Court of Appeal concluded that the Superior Court was justified in applying an exceptional remedy to an exceptional situation.

Our comments

The views of the majority judges in Deraspe v. Zinc Electrolytique du Canada Ltée are a useful reminder that the role of the class action representative entails responsibilities which could not be blindly delegated to the class counsel.

In the recent years, the Supreme Court of Canada[9] and the Quebec Court of Appeal[10] have favoured a liberal approach to assess the adequateness of the class representative, suggesting that requirements in this regard are minimal. Although lawyers may play an important role in class action proceedings, the class representative remains the fiduciary of the interests of the absent members, and must act to manage the action accordingly. Even once a class action is certified, the class representative must be prepared to show sufficient control and diligence in the process.

Should the class representative fail to ensure the adequate conduct of the action, and more particularly in the context of abusive proceedings, the Court may take measures in order to ensure the orderly progress of the case, which could exceptionally go as far as making orders to replace the class representative.

By David E. Roberge and Michel Gagné
____________________________________

[1] 2018 QCCA 256. The Superior Court judgment is reported at 2015 QCCS 4285.

[2] Par. 34.

[3] Par. 9.

[4] Par. 35.

[5] Par. 38.

[6] Par. 40.

[7] Par. 40.

[8] Par. 41.

[9] Infineon Technologies et al. v. Options Consommateurs, [2013] 3 SCR 600.

[10] For instance, see Sibiga v. Fido Solutions inc., 2016 QCCA 1299.

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McCarthy Tétrault LLP

McCarthy Tétrault is a Canadian law firm that delivers integrated business law, litigation services, tax law, real property law, labour and employment law nationally and globally.McCarthy publishes a series of blogs to share information with companies to help them comply and manage their businesses. On the Inside Internal Controls blog we will share some of those blog posts sharing their expertise among others, in the areas of Competition/Anti-trust, Corporate and Commercial Law, Intellectual Property, Privacy, Environmental Law, Technology and Litigation. Read more here
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