Class Action FAQ

What is a class action?

A class action is a special form of lawsuit in which one plaintiff brings a claim against one or more defendants based on allegations which are common to a group, or class, of people. In order for the action to become a class action, it must proceed through a stage known as “certification”.

Who brings a class action lawsuit forward?

A statement of claim is issued on behalf of a “representative plaintiff”. The representative plaintiff’s role is to work with class counsels to bring the action forward and to represent the class members in court.

What is certification?

In order for an action to proceed on behalf of the entire class, a judge must decide (among other things) whether the members of the proposed class have common issues, and whether a class action is the preferred way to resolve the issues. The process to decide these issues is known as the “certification motion”. If the judge is satisfied that the case meets all of the requirements for certification, he or she will issue an order which certifies the action as a class action.

Do I have to do anything to “join” the lawsuit?

No.  If the lawsuit is certified, and you are included in the class as defined, you are automatically included in the lawsuit.

Once I am part of the class do I have to do anything?

No. We will work primarily with the class representative.

What if I do not want to be included in the lawsuit?

Those who do not wish to remain in the class will be given the option to opt-out by sending an opt-out form at the appropriate time to us.

What are the benefits of proceeding as a class action?

Certification as a class action will enable us to prove the facts in a single lawsuit rather than in numerous individual lawsuits.  This has obvious benefits to the class members and to the courts.

How long does it take for a class action to be resolved?

There is no timeframe.  We will move the case forward diligently but it can take a considerable period of time to reach trial.

Can this action be settled without going to trial?

Many class actions settle and thereby remove the need for a trial. However, we cannot predict with any certainty whether or not there will be a settlement in a given action.

What are the chances of winning the action?

The chances of “winning” can never be accurately predicted.

How is the lawsuit being funded?

Class action lawsuits are typically brought on a contingency basis.  This means that the lawyers will only be paid if the action is successful or results in a settlement in favour of the plaintiffs.

However, disbursements (i.e. out-of-pocket expenses) are typically funded by the class members, including the class representative. The class representative assists us in obtaining funds for the disbursement from class members. Ultimately, if the class action is successful, all amounts advanced for disbursements will be re-paid from the proceeds of any judgment or settlement to class members (and others).

Will I be liable for costs of the action if it is unsuccessful?

Only the class representative may be liable for costs of the common issues portion of the action if it is unsuccessful.

When can I expect to receive a payout from this class action?

A “payout” or an award for damages is never certain.

The action may settle or it may proceed to trial, at which time a judge will determine the amount of damages, if any, to which the class members are entitled to. Regardless, the amount of “payout” cannot be predicted, and we cannot predict when the action may settle or when the trial will conclude.

Must I continue to abide by the franchise agreement while the lawsuit is pending?

Yes.  In franchise class actions, unless advised otherwise all franchisees must continue to abide by the requirements in their franchise agreements while the dispute is being litigated.

How will counsel keep me updated on the progress of the case?

If the lawsuit is certified as a class action, you will receive a formal notice from the court explaining the nature of the case and providing you with the opportunity to opt out if you wish.

General information about the lawsuit will be posted on Sotos LLP’s website at http://www.sotosllp.com.

Where can I send any documents that I have that may be relevant to a class action?

Please contact us if you have any documents that you believe may be relevant to a class action.

Quiznos victory featured in Lawyers Weekly

The July 9, 2010 issue of Lawyers Weekly features a front-page article about Quizno’s Canada Restaurant Corp. et al. v. 2038724 Ontario Ltd. The article discusses some of the legal hurdles overcome by Sotos LLP on the appeal and draws similarities with Parsons v. Coast Capital Savings Credit Union, another recent B.C. Court of Appeal decision.

Sotos LLP lawyer David Sterns is quoted in the article:

There can be little doubt that the Court of Appeal intended by this decision to signal that class proceedings are ideal tools for achieving justice for economically disadvantaged and vulnerable groups, such as franchisees. In my view, the Court of Appeal wants these cases to be tried on their merits, and may the best man or woman win.

The lawsuit alleges that the Canadian franchisor of the Quiznos chain and others have illegally conspired to enhance and fix the prices of supplies purchased by Quiznos franchisees for their businesses. On June 24, 2010 the Court of Appeal upheld the certification of Canadian Quiznos dealers, allowing them to proceed with a class action lawsuit.

Click here to go to the digital version of the Lawyers Weekly (free preview)

Click here to go to the Quiznos class action home page

Ontario Court of Appeal Dismisses Midas Appeal

The Ontario Court of Appeal released a decision today confirming that Canadian Midas dealers cannot be forced to waive or release their rights to participate in a class action lawsuit against Midas Canada in order to sell or renew their franchise agreement.

Previously, a lower court rejected Midas’ argument that the dealers were precluded from launching a class action due to release of liability provisions in the dealers’ franchise agreements. The dealers, represented by Sotos LLP, successfully argued that their right to band together as a class was protected under the Arthur Wishart Act (Franchise Disclosure), 2000.

Today, the Court of Appeal upheld that decision and dismissed Midas’ appeal. The Court sided with the Midas dealers on each ground of the appeal, holding that the franchisees were indeed protected by the Arthur Wishart Act and could not surrender their right to a class action.

The decision has big implications for franchisors in Ontario who seek to protect themselves from class action lawsuits. As Justice MacFarland notes in the decision:

[29]          To permit the appellant to require the class members to release any claims they might have against the appellant in order to take advantage of any other rights they might have under the Agreement, in my view, is simply contrary to the spirit, intent and letter of the Act.  Where a franchisor insists upon such waiver or release, s. 11 makes it clear that any such waiver or release will be void.

This ruling marks the second big class action win in the Ontario Court of Appeal for Sotos LLP in just two weeks. On June 24 the Court upheld the certification of Canadian Quiznos dealers in a separate case.

Read the Midas decision

Visit the Midas class action home page

CBC: Licence offices class-action lawsuit approved

The CBC has posted a news article on the ongoing Ontario motor vehicle licence issuers class action. From the article:

Several hundred driver’s licence and vehicle registration offices can move forward with a class-action lawsuit against the Ontario government for alleged under-compensation.

The Ontario Superior Court of Justice decision, which came late last week, identifies the private licensers as a class, giving them permission to continue the lawsuit launched last October.

Read the rest of the article at CBC.ca.

Go to the Licence Issuers class action home page

Court grants class action status in suit against Ontario Government

A decision of the Ontario Superior Court of Justice released June 30, 2010 allows the owner-operators of several hundred drivers’ license and vehicle registration offices to proceed by way of a class action against the Ontario government over alleged under-compensation.

Privately-owned issuing offices carry out much of Ontario’s responsibility for issuing drivers’ licenses and vehicle registrations. Private issuers are independently-owned businesses which are paid according to contracts written by Ontario. Over the past decade, several reports, including reports of the province’s Auditor General, have called attention to the inadequacy of the issuers’ compensation.

The court found that the lawsuit meets all of the criteria for class-action status. “This is a major step forward for the issuers in their effort to obtain their fair compensation for the important job which they carry out on behalf of the government,” according to plaintiffs’ lawyer, Allan D.J. Dick. Added Dick: “the private issuers have no influence over their compensation and do not have any of the protections of employees. They are totally dependent on the government for fair compensation.”

The issuers seek substantial additions to their compensation going back to August 2003 and an update of their current compensation formula in the future.

The decision in Mayotte v. Ontario is available at: http://www.sotosllp.com/class-actions/licence-issuers/

Private issuing offices have operated since 1917 and are an example of outsourcing of government services in communities across Ontario. Background information on the private issuers, including the reports of the Auditor General, is available at: http://www.omvlia.com/.

The licence issuers are represented by Sotos LLP, Canada’s leading franchise law firm.

For further information: Allan D.J. Dick at adjdick@sotosllp.com or David Sterns at dsterns@sotosllp.com, Sotos LLP, 416-977-0007, www.sotosllp.com