1 is permitted t assume the electrnic signature is that f the sender. In this instance, the recipient is under a duty t carry ut such prcedures. Shuld the sender dispute they sent the electrnic message with the electrnic signature attached, it will be fr the sender t demnstrate that they did nt send the message. Stephen Masn, 2002 This paper was written t accmpany a lecture given t a jint meeting f the Sciety fr Advanced Legal Studies and British Cmputer Sciety Internet Specialist Grup n 15 Nvember 2001 in Senate Rm, Senate Huse, and University f Lndn, chaired by David Spinks, Directr Infrmatin Assurance, and EDS. This paper was first published in tw parts in The Cmputer Law and Security Reprt, Part I May/June 2002, Vlume 18, Issue 3, , Part II July/August, Vlume 18, Issue 4, Readers may dwnlad a cpy f this paper frm the web site, which cntains the full references.. Barrister and Chairman f Pdri Cmmunicatins Limited. H s in c-risks, e-busincss, data prtectin and interceptin f The authr wishes t thank Prfessr Tapper, Peter Hwes COO f rchive-it.cm, Charles Hllander QC, Jhn Thebald f Ikan pic, Nichlas Bhm cnsultant t Fx Williams and Alec Muffett Principle Engineer Security at Sun Micrsystems Limited, fr reading die first draft f this paper and fr their valuable cmments. All errrs and missins remain with the authr. The Canadian experience with class actins: access t justice r just a new mneymaking prduct line fr lawyers? by Prfessr Carry D Watsn QC 26 BACKGROUND The mst significant develpment in litigatin in Canada in the past decade is the emergence f class actins. T understand the intrductin f class actins int Canada, and their rapid grwth, ne needs t appreciate a basic fact the high cst f litigatin and its negative impact n access t justice. As in England, the cst f litigatin in Canada is very high, and its impact is much exacerbated by the risks resulting frm the lser pay rule (which is nt amelirated in Canada by "befre the event" r "after the event" insurance). With the virtual disappearance f civil legal aid (except in family law) the result is that fr the average, risk averse citizen, litigatin is mre r less ut f the questin unless the individual's damages are very large, liability is reasnably clear, and a lawyer is willing t underwrite the cst f the litigatin (n a n win, n pay basis). Als, in Canada mtr vehicle and industrial accident litigatin d nt play the central rle that they d in the English litigatin system. As far as industrial accidents are cncerned, n fault wrkers' cmpensatin schemes have replaced cmmn law actins acrss Canada since the 1930s. Since the 1980s, mtr vehicle injury cases have been dealt with by n fault schemes in almst tw thirds f the cuntry (Ontari and Quebec) unless a claimants' injuries are "serius and permanent". The relevance f all this is that it makes litigatin lawyers hungry fr prduct lines. Befre the intrductin f class actins, we had little r n mass trt
2 litigatin (e.g. prduct liability litigatin): indeed, we had very little f the types f litigatin that have been the subject f the mre than 400 class actins cmmenced since they were intrduced in cmmn law Canada in The situatin in Canada is quite different t that in the US, where large damages awards fr pain and suffering and the absence f fee shifting has led t a vast amunt f mass trt/ prduct liability litigatin (bth individual and class actins), best exemplified by the asbests litigatin. J DEFINITION AND DEVELOPMENT OF CLASS ACTIONS A class actin is ne in which a representative plaintiff sues n behalf f a defined class f claimants whse claims raise a cmmn issue f fact r law. Class actins grew ut f the ld representative actin, which became encrusted with restrictive limitatins impsed by case law bth in Canada and the UK particularly in cases where the claims made were fr mnetary damages. In the late 1970s Canadian lawyers attempted, unsuccessfully, t munt American style class actins using the representative actin rule. In the case f General Mtrs j Canada Ltd v Naken in 1983 (invlving claims fr damages fr misrepresentatin in the sale f an alleged "lemn" mtr car), the Supreme Curt f Canada (SCC) held that the representative actin rule wuld nt supprt r permit such an actin because there were t many issues raised by this type f actin which were nt addressed by the representative actin rule (eg ntice t class members, what csts regime shuld apply, wh shuld be subject t discvery, and hw damages shuld be assessed). The SCC held that whether there shuld be class actins and what shuld be the applicable rules was a matter best left t be reslved and prvided fr by the prvincial legislatures. THE LEGISLATIVE RESPONSE AND THE PARTING OF THE WAYS BETWEEN UK AND CANADA The legislatures respnded t the situatin. Quebec did s very early, passing a class actin statute in Ontari als did s, but nt until 1993, and British Clumbia fllwed in Hwever, it was nly with the passage f the Ontari and British Clumbia Acts that class actins really tk ff, even in Quebec. The three plicy underpinnings The threefld ratinale fr class actins was spelt ut in the Ontari Law Refrm Cmmissin's massive 1982 Reprt n Class Actins: Access t justice: it is an imprtant benefit f class actins that they divide fixed litigatin csts ver the entire class, making it ecnmically feasible t prsecute claims that might therwise nt be brught at all. Judicial efficiency: Class actins avid the duplicatin f fact-finding and legal analvsis, and the risk f j ' incnsistent decisins, inherent in multiple individual law suits. Behaviur mdificatin: where manufactures, etc can inflict small amunts f damage n large numbers f peple wrh cannt affrd t litigate individually, the deterrent functin f the underlying law (e.g trt law) is lst. By subjecting such defendants t the risk f a class actin it is hped that their behaviur can be mdified. KEY ELEMENTS OF THE CLASS ACTION PROCEDURE A class actin is brught by a named representative plaintiff n behalf f a defined class. If the actin passes the tests fr certificatin (see belw) it prceeds as a class actin, in which case issues cmmn t the class are decided at a "cmmn issues hearing" and then if there remain individual issues (e.g. individual damage assessments) these are decided at individual hearings. The plaintiff class actin lawyer is remunerated by a curt rdered fee typically paid ut f the "cmmn fund" prduced by the litigatin. Any settlement must be apprved by the curt t be binding n the class. The class actin device is purely prcedural. It in n way changes substantive law, and the litigatin is cnducted accrding t the substantive law principles applicable t individual actins such as negligence, ' cntract, fraud, misrepresentatin, etc. In rder t prceed as a class actin it must be certified as such: in effect leave f the curt is required fr it t prceed as a class actin. The essential (and quite minimal) requirements are: The pleadings must disclse a cause f actin; The claims f the class members must raise cmmn issues; A class prceeding wuld be the preferable prcedure fr reslutin f the cmmn issues. There are als the requirements f adequate class definitin, and that the representative plaintiff be an adequate representative withut a cnflict f interest with ther class members. Canadian certificatin requirements are less demanding than the US, ' which has further criteria including that cmmn questins must predminate ver individual issues, and that a class actin must be superir t ther pssible prcedures. If certified, the actin prceeds as a class actin; if certificatin is denied it is the end f the prceeding as a class actin. Ntice must then be given t class members f the class actin, its nature and hw the class is defined (this can be, and ften is, by newspaper advertising). Class members then have the right t pt ut; if they d nt they are bund by the decisin in the actin whether favurable r unfavurable. Bth Canada and the US fllw a "lawyer 27 Amicus Curiae Issue 45 January/'February 2003
3 28 entrepreneur" mdel; the expectatin is that lawyers will pursue class actins n a "n win/n fee" basis in the hpe f curt awarded fees if they are successful. This is the "il" that makes the system run. WHICH JURISDICTIONS HAVE CLASS ACTIONS? The US has class actins in the federal curts and in virtually every state, while in Australia they are permitted in the federal curt and in Victria. In Canada, Quebec, Ontari, British Clumbia, Saskatchewan, Newfundland and the Federal Curt have class actins. Class actin legislatin has als been prpsed in Manitba and Alberta. In fact, Canada nw has class actins in every prvince after the recent SCC decisin in Western Canadian Shpping Centres in which the curt effectively verruled its ld decisin in General Mtrs f Canada Ltd v Naken (abve). The curt held that in the absence f cmprehensive legislatin, the curts must fill the vid under their inherent pwer t settle the rules f practice and prcedure as t disputes brught befre them, and that class actins shuld be allwed t prceed under general representative actin rules. The curt emphasized the imprtance f class actins as a prcedural tl in mdern litigatin t bring abut access t justice and relied upn the class actin legislatin in Ontari and British Clumbia fr guidance as t the apprpriate prcedure t be fllwed. The curt's extrardinary decisin underlines hw far class actins have cme in Canada in a shrt time and their perceived imprtant rle in prviding access t justice. THE CANADIAN CASE LAW EXPERIENCE Class actins in Canada have had great success. They have prvided access t justice and cmpensatin t hundreds f thusands f peple wh, in the absence f such actins, wuld likely never have sued and therefre wuld have received nthing. There have been apprximately 400 class actins since This figure represents the ttal number f actins cmmenced, and nt all were certified r successful. The actins referred t belw were all successful (in that they resulted in settlements cmpensating the class). The types f cases have varied, but the examples given in the fllwing grupings give sme flavur f what is happening. Trts: prduct liability/cnsumer prtectin defective husehld dryers defective plastic furnace venting systems defective tilets. Trts: Prduct Liability Persnal Injury silicn gel breast implants; r ' defective heart pacemakers (Nantais); tainted bld (bld prducts cntaminated with hepatitis C); claims in respect f prescriptin weight lss drugs. Mass Trts railway accidents (actin n behalf f persns injured in subway and railway cllisins); damages arising frm a fire in a subway system; water pllutin (e cli in a twn water supply); clinical negligence (patients wh had received EEG tests at five clinics run by the defendant dctr and cntracted hepatitis B); release f txic gases frm an industrial plant. Cntract pensin and benefits cases (including entitlement t pensin plan surplus; actin by a class f beneficiaries t determine pensin entitlements; claim by retired emplyees regarding withdrawal f prmised health care benefits; claims by members f an emplyee pensin plan alleging breach f fiduciary duty by the actuary fr the pensin plan); "vanishing premiums" life insurance cases; illegal interest charges; mass wrngful dismissals; 7 slicitr's negligence (class actin brught against a slicitr fr negligence arising ut f a syndicated mrtgages scheme where a rgue had cnverted the invested funds fr his wn use; an actin against the rgue prved fruitless and hence the actin against the slicitr); misrepresentatins cncerning a glf curse husing develpment defectively cnstructed cndminiums. Financial markets misrepresentatin re sales f shares in bth the primary and secndary markets. Cmpetitin Law price fixing I Miscellaneus native land claims; cpyright infringement RECOVERIES, SETTLEMENTS AND FEE AWARDS Settlements must be apprved by the curt and must be "fair and reasnable" (see belw). In making fee awards Amicus Curiae Issue 4 5 January/February 2003
4 (which are made by the curt) Canadian curts have shwn mre restraint than US curts, but fees can still be very substantial. Expressed as a percentage f the damages recvered, fee awards in Canada mstly range frm 15 per cent 26 per cent, but fees awards have been as lw as 2.4 per cent, and as high as 60 per cent. A higher percentage fee is usually justified where the recvery is relatively lw. The amunt f the fees that will be awarded can be hard t predict because all the factrs t be taken int accunt are nt yet clear. Mrever, there are tw cmpeting methds in use: (i) Multipier methd: base fee (hurs wrked x hurly rate) x multipier (t reward risk taking): (ii) Percentage f recvery t reflect all elements f the litigatin Hwever, the Ontari Curt f Appeal has recgnized that the legislative bjective f enhanced access t justice requires that slicitrs cnducting class prceedings have a real pprtunity t btain a multiple f the base fee, the multiplier shuld generally be in the range f ne t fur and fees awarded must be apprpriate t make the system run and attract lawyers t take the necessary risks EXAMPLES OF SETTLEMENTS AND FEES AWARDED In ne silicne gel breast implants actin there was a settlement f $29 millin, with a cunsel fee f apprximately $2 millin dllars awarded. (There have been several breast implant cases; ttal settlements n behalf f Quebec and Ontari claimants alne amunted t $75, , and there have been additinal actins in British Clumbia). In anther case invking defective heart pacemakers, a settlement f $23.1 millin was reached with the f,005 class members sharing apprximately $16.8 millin. A ttal f $6.3 millin in fees and disbursements was awarded. There have been numerus "vanishing premiums" life insurance plicy cases. In ne such case the settlement was fr $65 millin with an award f $3 millin in fees. In anther such actin the ttal settlement recvery was $240 millin, and the fee award was $6.5 millin (apprximately 2.7 per cent f the amunt recvered). In the Hepatitis C tainted bld litigatin, the glbal amunt f the settlement was $1.5 billin. Fees ttaling abut $52.5 millin were apprved in Ontari and British Clumbia actins, ranging frm 2.36 per cent t 4.26 per cent f the recvery f the class depending n whether the actins were brught in Ontari r British Clmbia, and ' whether it was the transfused actin r the hemphiliac actin. ^ HOW CLASS ACTION LITIGATION IS CONDUCTED Typically class actins are hard fught. Much prcedural battling takes place ver certificatin, and there are frequent pre certificatin mtins by defendants in an attempt t get rid f the case r wear the plaintiffs dwn. Hwever, in sme cases settlement cmes quite early (befre certificatin); this can ften be fr business reasns, r where gvernments are parties, plitical reasns. It is quite cmmn fr certificatin t lead t settlement. Few cases have prceeded t trial; mst settle, as with individual litigatin, and prbably at abut the same rate. There is a whle jurisprudence n certificatin. Curts have been smewhat disingenuus and have used the "preferable prcedure" requirement t give themselves a discretin and the ultimate pwer t say which class actins will be allwed t prceed (and this ften seems t be exercised subjectively). A particular prblem is psed by cases invlving ral misrepresentatins, where it can be difficult t find a "cmmn questin". A small number f plaintiff specialist firms have emerged. Defence wrk tends t be in the hands f the elite crprate law firms, wh have generally eschewed plaintiff's wrk essentially because their majr clients, crpratins, are typically defendants and it is perceived they wuld nt like t see their law firm acting fr "the enemy". TWO AREAS OF DIFFICULTY: COSTS AND FUNDING Csts regime The traditinal "lser pays" csts rules d nt wrk at all well with class actins. The rule that nrmally the winner shuld pay the lser's csts "fee-shifting", r the "English csts rule" as the Americans call it is generally - nt fllwed in the US. Hwever, it is the nrmal rule in the Cmmnwealth cuntries f Canada and Australia, s fee-shifting has nt been a prblem fr the US, but has been fr Canada and Australia. The first thing a Cmmnwealth class actin regime must reslve is whether class members ther than the representative plaintiff may be liable fr the defendant's csts. This has been reslved legislatively s that they are never liable regarding the "cmmn issues" part f the prceeding (since they are, in a sense, invluntary litigants), thugh they can be liable fr csts n the adjudicatin f individual issues (e.y. the assessment f their persnal damages). But a trublesme pint remains: shuld the representative plaintiff be individually liable fr the defendant's csts if the actin is unsuccessful? On this issue the recmmendatin made by the Ontari Eaw Refrm Cmmissin's Reprt n Class Actins in 1982 was succinct - generally the representative plaintiff shuld nt be liable fr csts, and shuld nly be made liable in special circumstances (e.g. if the litigatin plaintiff was fund t be vexatius). The reasn fr the recmmendatin was stated clearly: if the rule were therwise why wuld anyne agree t becme the 29
5 30 representative plaintiff? If the class actin is successful the representative plaintiff will never recver mre than her claim/share (which may be quite small, e.g. $5,000) yet by acting as the representative plaintiff under a lser pay regime she wuld assume the full csts f a multi-millin dllar class actin if the actin fails. But the Ontari legislatin as enacted ignred this recmmendatin and prvided instead fr a general lser pays csts regime, with a discretin in the curt t relieve a lsing plaintiff f liability fr csts where the class prceeding "was a test case, raised a nvel pint f law r invlved a matter f public interest". Hwever, British Clumbia adpted the OLRC prpsal s in that prvince there is a general rule against lser pays csts with sme minr exceptins: csts may nly be awarded in a class actin: if there has been vexatius, frivlus r abusive cnduct n the part f any party. Ntwithstanding Ontari's retentin f fee-shifting, and the OLRC's dire predictin, class actins have thrived in the Prvince and there has been n shrtage f representative plaintiffs. Presumably this is because plaintiffs' lawyers are chsing judgment-prf representatives r are expressly r impliedly agreeing t indemnify the representative fr any adverse cst award. [Individual class members are, naturally, liable fr the cst f pursing individual claim (i.e. quantificatin f individual damages), and at that stage f the prceeding the lser ' ' r pays principle applies.] FUNDING The funding f the plaintiff side f class actins was given little attentin by thse wh designed the Canadian class actin regimes (with the exceptin f Quebec). Class actins are nt cvered by legal aid. Instead the entrepreneurial, bunty hunter, plaintiff class actin cunsel funds the actin and chases the pt f gld at the end f the rainbw; but the chase can be lng, hard and 1 ' very expensive. There is great risk invlved fr lawyers acting n a n-win/n-pay basis in class actins which are frequently cmplex and expensive; when the stakes are high the defendants ften fight very hard with full knwledge f the financial weakness f the plaintiff class cunsel. As a result, interim funding prblems fr the ' r plaintiff lawyer are daunting. Ontari has a class prceedings fund that prvides disbursement funding but des nt cver lawyers' fees. Its primary purpse is t guard the representative plaintiff frm an adverse csts award if any financial supprt is given t a plaintiff, the fund becmes liable fr any cst rder against the plaintiff and the plaintiff is relieved f all liability fr such csts. The fund is financed by a 10 per cent levy n any recvery in funded actins. But the Ontari fund has nt wrked very well. Only a small percentage f class actin plaintiffs have applied fr funding, few cases have been granted funding and the "big settlement cases" have typically nt applied s the fund has lacked funding. The situatin is better in Quebec. It als has a fund knwn as the Fnds which des prvide lawyer fee (and disbursement) funding, financed ut f a 10 per cent levy r charge n any judgments received in cases that funded by the Fnds. It appears t have much higher usage rate than the Ontari fund. CLASS ACTION PROBLEMS Althugh class actins in Canada have had great success and prvided access t justice, and cmpensatin, t hundreds f thusands f peple wh wuld therwise never have received anything, class actins are nt prblem free. Mst f the prblems I am abut t discuss are well dcumented in the US. Hwever, they are at least ptential prblems in Canada as well, and while we are perhaps ding better than ur US cunterparts, I d nt believe we are yet taking the prblems seriusly enugh. The "clientless" lawyer Many f the prblems stem frm the fact that the class actin lawyer is, effectively "client-less" and this gives rise t agency7 prblems. The lawyer is client-less in the sense that ften the lawyer will have chsen the class representative and, in any event, nce the class actin is certified his client is the whle class, nt just the named representative plaintiff. There is n ne t give the lawyer binding instructins and effectively the class actin is the lawyer's actin, nt that f the class r the representative plaintiff. The verarching feature f class actins is that the principals (the class members) cannt effectively mnitr their agent (die class lawyer), s the mnitring rle rdinarily played by clients in nn-class actins is absent in class actins. This is further reinfrced by the fact that the lawyer will typically have (i) invented r devised the class actin, and (ii) he r she will be funding the actin persnally thrugh his r her firm. Settlements and the risks f cnflict f interest and cllusin These agency prblems are mst apparent in the settlement f class actins. Like mst ther cases, mst class actins settle. Unlike mst settlements, class actin settlements raise very serius questins. The settlement f class actins differs frm ther chil suits in an imprtant respect. In an rdinary (nn-class) actin, any settlement reached between the parties will be binding nly upn them; accrdinglv, the settlement will be legitimate s lng ' J' as the named parties cnsent t it. By cntrast, in a class actin any settlement will affect the rights f everyne \\ithin the defined class, withut the explicit cnsent f individual class members. Hence, t prtect these absent class members frm being bund by unfair settlements, under ur legislatin class actins may be settled nly with curt apprval.
6 A further prblem with class actin settlements is the cnflict f interest inherent in the prcess and the pprtunity fr cllusin between plaintiff 's cunsel and the defendant. The Ontari Law Refrm Cmmissin was well aware f this, and in its Reprt n Class Actins the issue is discussed in terms which have been repeated by subsequent US cmmentatrs. The OLRC nted that: "There is a real pssibility that, withut the benefit f apprpriate safeguards, parties and their cunsel might be tempted t abuse the class actin prcedure in reaching a settlement. Fr example, the representative plaintiff might use the class actin t enhance his individual bargaining psitin, r class members' interests culd be sacrificed Jr lawyers'fees... Mrever, in the cntext f a settlement negtiated n behalf f the entire class, the agreement reached culd be inadequate r unfair t the class members "[I]t has als been suggested that the interests f the class lawyer and the class members might diverge; this wuld ccur where the lawyer negtiates a settlement that maximizes the lawyer's cmpensatin at the expense f the ultimate recvery achieved Jr class members. The mst bvius manner in which such a result might ccur is where the defendant ffers t absrb the fees f the class la\yyer, calculated at a premium rate, in return fr the acceptance f an inadequate class award and discntinuance f the class actin. Such a result might als ccur, hwever, thrugh indirect Jinancial pressures, withut any cnscius misbehaviur n the part f the lawyer. " This phenmenn is nt peculiar t class actins and can be present in rdinary PI litigatin where lawyers simultaneusly negtiate bth damages and csts. Fr example, D prpses a settlement f $50,000 fr damages and $5000 fr csts. P says that he culd nt recmmend that t his client. D respnds with an ffer f $45,000 fr damages and $10,000 fr csts, and the plaintiff says that wuld be acceptable. But in nn-class actins we see client mnitring as the answer; the individual client can accept r reject the prpsed settlement. Little r nthing has changed since the OLRC wrte its 1982 Reprt. Recently, Prfessr Jhn Cffee stated the prblem in similar terms: "Cllusin within the class actin cntext essentially requires an agreement actual r implicit by which the defendants receive a "cheaper" than arm's length settlement and the plaintiffs' attrneys receive in smejbrm an abve-market attrneys'fee. In return fr this... settlement, defendants either pay the plaintiffs' attrneys'fees themselves r agree nt t cntest the plaintiffs' attrneys' applicatin fr curt-awarded fees... " And Judge Richard Psner makes the same pint: "The lawyer fr the class will be tempted t ffer t settle with the defendant fr a small judgment and a large legal fee, and such an ffer will he attractive t the defendant, prvided the sum f the tw figures is less than the defendant's net expected lss frm ging t trial". The OLRC, having anticipated these prblems under a new class actin regime, recmmended judicial scrutiny (curt mnitring in place f client mnitring) as the slutin and the requirement that class actin settlements be subject t curt apprval has been incrprated int class prceedings legislatin. But is this "remedy" sufficient, and in applying it what limitatins exist? And mst imprtantly, can this "remedy" be imprved? I believe the real issue here is inability f a cmmn law, adversary system judges t adequately cnduct inquisitrial fairness hearings regarding settlement withut the aid f cunsel t ppse the settlement. At the fairness hearing a judge is faced with tw cunsel wh are bth claiming that this settlement is a gd thing i.e. fair and reasnable fr the class members. Unlike the usual situatin in an adversary hearing, the judge is deprived f adversarial presentatin. I have suggested n several ccasins that judges shuld appint cunsel t ppse the settlement, but n curt has dne s t date. I am f the view that if defendants are willing t thrw $10 millin r a billin dllars at a case t settle it, then the case can affrd the cst f paying a cunsel t ppse the settlement r at least independently advise the curt as t the reasnableness r therwise t the settlement. Our judges have taken sme steps twards assuring the reasnableness f settlements. There is a principle (nt clearly and universally recgnized) that the parties shuld nt simultaneusly negtiate damages and fees. I wuld g further and adpt a principle that the defendant shuld have n say in the plaintiffs lawyer's cmpensatin in a cmmn fund case at all. The curt can just let the plaintiff's cunsel make his/her pitch t the judge as t what shuld be awarded as cunsel fees: the defendant shuld nt be allwed t take part in, r make representatins at, the fairness hearing therwise this becmes a trading pint between the parties (e.g., P agrees t settle fr $3M is D agrees t supprt P's request fr a $1M fee.) We have had tw cases in which judges have refused t apprve settlements until they were imprved (tw tainted bld cases). In anther case the curt refused utright t apprve a settlement f a crprate "strike suit" where cunsel had entered an agreement fr a dismissal f the actin with the defendant paying the plaintiff cunsel's fees. (The lack f adversarial presentatin becmes even mre acute at hearings t fix cunsel fees. Here we have the smewhat ludicrus scene f the suppsed cunsel fr the class standing up unppsed and asking t have a sizeable prtin f the classes' mney given t him as a cunsel fee.) ARE CLASS ACTIONS FAIR TO PLAINTIFFS AND DEFENDANTS? A study in 2000 by the Rand Institute fr Civil Justice bserved: "Plaintiff attrneys can be mtivated by the prspect f substantial fees fr relatively little effrt. Fr their part, defendants may want t settle early and inexpensively. When these incentives intersect, the settlements reached may send inapprpriate deterrence signals, waste resurces, and 31 Amicus Curiae Issue 4 5 January/February 2003
7 encurage future frivlus litigatin ". The study bserved that its data did nt prvide a basis fr estimating the prprtin f litigatin in which questinable practices btain. (Hensler, D.R.et al., Class Actin Dilemmas: Pursuing Public Gals fr Private Gain, Santa Mnica: Rand Institute fr Civil Justice, 2000 The full text f the Rand study can fund at The plaintiff's perspective Class actins wuld be unfair t plaintiffs if the cmpensatin achieved was inadequate and the lawyers' fees paid were excessive. This is nt perceived t be the case in Canada, but the reverse may ften be the case in the US. The Rand study cncluded that the "clientless litigatin" represented by class actins has led t questinable practices settlements that are arrived at withut adequate investigatin f facts and law and that create little value fr class members r sciety and class cunsel fees disprprtinate t the effrt actually invested in the case. The plaintiffs' attrney, nce seen as a public-regarding private attrney general, is nw viewed as a prfit-seeking entrepreneur, capable f pprtunistic actins and ften willing t subrdinate the interests f class members t the attrney's wn ecnmic self- interest. The defendant's perspective Currently there is n cncerted utrage frm defendants (r their lawyers) regarding class actins in Canada. The Rand study indicated that class actins were a cntinuing cncern t defendants in the US because f the alleged "blackmail" they prduce (i.e. the number and size f the claims asserted frce the defendants int unwarranted and excessive settlements). But Rand cncluded that assessing this claim made by defendants was "enrmusly difficult"; defendants' cmplaints abut class actins are difficult t disentangle frm their disappintment at nw being cnfrnted with claims f a type and size that they previusly escaped. CONCLUSION S what is the answer t the questin psed by the title f this piece: d class actins really prvide access t justice r are they just anther prduct line fr lawyers? The Canadian experience suggests they are bth a pwerful tl f access t justice and a prfitable new prduct line fr lawyers wh are prepared t accept the risks. But they are far frm prblem Carry D Watsn QC 32