The new dispositions of the Quebec Code of civil procedure with respect to class actions

March 1, 2003

On January 1, 2003, the new provisions of the Quebec Code of Civil Procedure (C.C.P.) with respect to class actions came into force with immediate application (Act to reform the Code of Civil Procedure, Bill No. 54, Chapter 7, enacted on June 6, 2002 and assented to on June 8, 2002) (hereinafter referred to as the Reform Act). These provisions are part of a complete revision of the rules of civil procedure in Quebec. However, actions instituted before January 1 shall be governed by the former C.C.P., unless the parties agree to proceed under the new rules.1

The newly adopted provisions favor the institution of class actions and limit a defendant’s ability to contest such a proceeding at the preliminary stage of the authorization to exercise such right.

In this respect, two major amendments to the procedure for obtaining from the court a prior authorization to institute a class action are of  particular interest. First, the requirement that an affidavit be filed in support of the motion for authorization has been eliminated.2 The former rules required that the authorization be obtained by way of a motion supported by an affidavit from the group representative. Second, the motion for a prior hearing may be contested only orally, subject to the submission of relevant evidence which may be allowed with the court’s permission. These particular provisions are an exception to the general regime following which a motion is supported by an affidavit attesting to the veracity of all facts alleged. If these new rules are strictly applied, they will lessen considerably the latitude that a defendant once had to contest the motion for authorization of a class action using the usual procedural methods, including examination on discovery. This new set of rules creates a significant distinction between the class action authorization process in Quebec and that which applies in other Canadian provinces such as Ontario, British Columbia and Newfoundland. Furthermore, where formerly it was customary for a court to allow a defendant to contest in writing and submit proof at the hearing, a practice which allowed a real debate at the stage of the authorization, the courts will now likely use their discretionary power to limit the length of hearings at that stage. It will be of interest to follow the debates that may be raised as concerns related to the validity of these new provisions, which debates however are unlikely to be successful in light of the current case law. Indeed, the new legislative provisions reflect the Quebec case law that prevailed prior to January 1, 2003, according to which a motion for the authorization of a class action “[translation] constitutes a filtering and verification mechanism” where there is no analysis of the merits of the grounds submitted as such. The court will therefore limit its intervention to a summary analysis of the extent to which the following four conditions listed at article 103 C.C.P. (which have not been amended by the Reform Act) have been met:

(a) the recourses of the members raise identical, similar or related questions of law or fact;
(b) the facts alleged seem to justify the conclusions sought;
(c) the composition of the group makes the application of article 59 or 67 difficult or impracticable ; and
(d) the member to whom the court intends to ascribe the status of representative is in a position to represent the members adequately.

Our courts have long interpreted article 1003 C.C.P. as not allowing any discretion with respect to the authorization to exercise the class action where the court is of the opinion that the four conditions have been met.3 Historically, Quebec courts have adopted a less restrictive approach in interpreting these conditions than that seen in Ontario and in the United States. Recently, the Court of Appeal, in Benoît Cardinal v. Ordinateur Highway Inc et al., C.A. 500-09-010456-002 (May 8, 2002), reiterated that an examination of these conditions must be given a wide and liberal interpretation. This principle was reaffirmed by the Court of Appeal on several occasions.4 Although until now our courts have had the opportunity to analyze the evidence submitted by a defendant in support of the certification process, including out-of-court examinations of the member’s representative, they have not considered the merits itself of the allegations made in the motion seeking the authorization. In case of doubt, the current tendency of the courts is to interpret the conditions of article 1003 C.C.P. in favor of the applicant, thereby dismissing only the motions which are clearly frivolous or unfounded.5 Therefore, even though an action presents problems of evidence or raises a serious doubt as to the alleged liability of the defendant on the merits, our courts have generally authorized class actions and have let the trial judge decide of the merits of the case. As confirmed by the Court of Appeal in Jean-Guy Vidal v. Harel, Drouin & Associés, REJB 2002-27512 (p. 1) in January 2002, referring to the words of the trial judge: “[translation] The motion for authorization must not replace the trial and the judgment on the merits of the class action suit. At the authorization stage, the court examines only the likelihood that the action will succeed based on the evidence submitted for this purpose (…).” As of January 1, 2003, the court will dispose of even less evidence at this preliminary stage for all new class actions.

Without the possibility of an examination on discovery of the members’ representative, the plaintiff ’s allegations in support of the four conditions applicable to the institution of a class action will be for all intents and purposes considered recognized, and little place will be left for an actual contestation.

In other words, defendants to a motion for an authorization to institute a class action can expect the dismissal of such a motion at the preliminary stage to become a rarity in Quebec and that our courts will favor hearings on the merits of class actions. This will have the effect of shortening the period for the hearing of a motion for authorization and, therefore, of reducing the possibility of settling a class action before it is authorized.

It should be noted that since January 1, 2003, no judgments have been reported pertaining to the application of the new rules. However, in a decision rendered on January 23, 2003, the Court of Appeal has stated, yet again, in its interpretation of the former C.C.P., that the authorization stage is strictly preparatory in nature and does not in any way decide of the merits of the debate or of the rights of the parties, as it is rather a decision that pertains strictly to “procedural administration”. The Court of Appeal also notes that the mere fact of being designated as a defendant in a class action cannot in itself be the basis of a prejudice6.

Another interesting amendment which came into force with respect to class actions is a broader definition of the concept of members which may institute a class action. Under the former Code, only a natural person part of a group for which a natural person was bringing or intended to bring a class action could institute a class action. As of January 1, 2003, a legal person established for a private interest, a partnership or an association that is part of a group may be a member of a group if, at all times during the twelve-month period preceding the motion for authorization, not more than 50 persons bound to it by contract or employment were under its direction or control and if it is dealing at arm’s length with the representative of the group and if it is part of a group on behalf of which a natural person, a legal person established for a private interest, a partnership or an association brings or intends to bring a class action.7 This change will significantly increase the number of potential class actions.

Lastly, the Reform Act simplifies the rules regarding notices, their publication and their circulation.8.

1 Reform Act, art. 179.
2 Reform Act, art. 179. C.C.P., as amended, art. 1002, and Reform Act, art. 50.
3 Comité d’environnement de la Baie James Inc. v. Société d’électrolyse et de chimie de Alcan Ltée, (1990) 29 Q.A.C. 251 ; Option Consommateurs v. Assurances générales des Caisses
Desjardins Inc., JE 2001-1636; Brochu v. Société des loteries, REJB 2002-31508.
4 Comité d’environnement de La Baie Inc. v. Société d’électrolyse et de chimie (1980) C.A. 568, p. 570; Tremaine v. A.H. Robins Canada (1990) RDJ 500, (C.A.); Château v. Les Placements
Germarich Inc. (1990) RDJ 655 (C.A.).
5 Le comité régional des usagers des transports en commun de Québec v. Quebec Urban Community Transit Commission, [1981] 1 SCR, 424-429); Comité d’environnement de la Baie
James Inc. v. Société d’électrolyse et de chimie de Alcan Ltée, (1990) 29 Q.A.C. 251 ; Vidal v. Harel, Drouin & Associés, REJB 2002-27572; Benoit Cardinal v. Ordinateur Highway inc.
et al. C.A. 500-09-010456-002, REJB 2002-32002; Tremaine v. A.H. Robins Canada (1990) RDJ 500, (C.A.); Château v. Les Placements Germarich Inc. (1990) RDJ 655 (C.A.); Bassam
Ajam v. General Motors du Canada, SC 500-06-000132-015, AZ 501 60810.
6 New York Life Insurance Co. v. Vaughan CA 500-09-012768-024, JE 2003-296
7 C.C.P., art. 999, and Reform Act, art. 149.
8 C.C.P., art. 1025 and 1046, and Reform Act, art. 151 and 155.

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