Group actions and class actions allow groups of similarly situated people to pursue legal claims that involve common issues against those who have caused them harm. In a group action, two or more plaintiffs join their claims in one proceeding against one or more common defendants. Each plaintiff acts in its own capacity but all plaintiffs can be represented by the same legal counsel. Expenses and legal fees are shared by the plaintiffs, thus reducing the cost to each individual. The interests of justice are advanced by minimizing the potential for inconsistent outcomes that could result if each plaintiff’s claim was litigated in a separate proceeding.
Class actions differ from group actions in several respects. In a class action, one or more plaintiffs act in a representative capacity to pursue legal claims that are common to all members of a class. Only the representative plaintiffs actively participate in the lawsuit. However, all class members are bound by the judgment of the court or any settlement that is reached by the parties. Secondly, the on-going out of pocket expenses of the litigation are borne by the representative plaintiffs. Class actions are normally paid for on a contingency basis, which simply means that the legal fees will only be payable if the case is settled or the court grants judgment in favour of the class. In addition, class actions are closely supervised by the court to ensure that they are carried out in the best interests of the class members and settlements must receive court approval. By centralizing the lawsuit in one court with one set of lawyers acting for the class, class actions allow large numbers of people with similar issues to litigate claims that might otherwise be too costly to pursue on their own, and avoid the spectre of inconsistent legal outcomes. For answers to some frequently asked questions about class actions please click ‘Class Action FAQ’.
Group actions and class actions can be particularly useful in the franchise context, where difficulties experienced by one franchisee are often encountered by others within the system. A group action is a good option where affected franchisees operate within the same locale allowing all members of the group to be represented by the same lawyers. Class actions, on the other hand are preferable where a large number of affected franchisees operate over a broad geographical area and particularly so where they are located in more than one province. A franchisee association, if one exists, can play a useful role by keeping franchisee class members up to date as the action proceeds and by assisting the representative plaintiff in paying the on-going out of pocket expenses of the litigation.
Regardless of the specifics of the claim, the lawyers at Macdonald Sager Manis LLP have the knowledge and experience necessary to provide you with sound legal advice regarding which option is best for you.
Key Contact: David N. Kornhauser
Practice Area Members: Michael Kleinman, Jill M. Knudsen