I am affected by a class action. What are my options?

Imagine finding out that thousands of people, just like you, have been impacted by the same issue – maybe it’s a product defect, a financial loss, or a breach of privacy. A class action is the collective response. It’s a powerful way for people who have been similarly affected to band together and demand justice on a scale that truly makes an impact.

But if you find yourself among those impacted, what steps can you take? Knowing your options clarifies how to participate, what compensation may be available, and how to safeguard your rights.

This guide breaks down each critical stage, from joining a class action to understanding the distribution of compensation.

Contents

• Why should I join a class action?
• How can I join a class action?
• Do I have to pay the lawyers involved?
• How does compensation work?
• How do I protect my rights in a class action?
• What does it mean to “opt-out” of a class action?

Why should I join a class action?

A class action is a lawsuit started by one or more people, called “representative plaintiffs,” on behalf of a larger group with similar experiences, known as the “class.” If a court “certifies” the lawsuit as a class action, it means the case can properly move forward as a class action on behalf of the class. Any settlements or court decisions will then apply to all class members, so they can benefit from the outcome without filing their own separate cases.

Joining a class action can be a practical, powerful choice for those impacted by similar harm. For many, pursuing an individual claim against a large corporation is both costly and daunting, often making it hard for everyday people to demand accountability on their own. A class action changes that equation, offering access to shared legal resources and expertise, with the litigation costs is divided over many people.

Class actions streamline the process, ensuring that everyone affected can seek justice simultaneously. When class members join together, they strengthen their collective voice, making it more likely that the case will gain momentum and that defendants will be held accountable for their actions. Class actions also provide uniform outcomes, making fair compensation more achievable for everyone involved.

How can I join a class action?

In Canada, most class actions operate under an opt-out regime, meaning you’re automatically included as a class member if you meet the criteria outlined in the certification order – unless you actively opt out (exclude yourself as a member). However, not all provinces follow this system. While jurisdictions like Ontario, British Columbia, and Quebec use opt-out models, New Brunswick and Newfoundland take a different approach for non-residents. In these provinces, residents are automatically included on an opt-out basis, but non-residents must actively opt in to participate. This distinction, often referred to as a quasi-opt-in process, means non-residents need to take specific steps to join the class action.  Click here for more information about opting out. 

That said, if you’re affected by a class action, you should “join” the class action to stay informed.  Joining the action is typically straightforward. Here’s a step-by-step guide:

1. Register as a Class Member: Many law firms will have online registration forms where you can submit your details to join a class action. This step is essential to ensure you’re included in any communication regarding case progress, proposed settlement, and the distribution of any settlements or court awards.
2. Submit Documentation: Once registered, you may be asked to submit supporting documentation to verify your eligibility as a class member. Depending on the nature of the claim, this could include receipts, medical records, proof of purchase, etc.
3. Stay Informed: After joining, watch for emails or updates from the law firm handling the case. They’ll inform you of any developments, deadlines, or actions required on your part.  You should also check Class Counsel’s website for updates on the class action.
   
   

Do I have to pay the lawyers involved?

In most class actions, lawyers work on a “contingency fee basis,” meaning they fund all time and disbursements associated with the class action and are only paid if the class action succeeds. Their fees are generally a percentage of the settlement or awarded compensation and must be approved by the court to ensure fairness for class members.

Class actions are expensive to pursue.  Without contingency fees, most class actions would be prohibitively expensive for most class members.  Contingency fees are therefore important in enabling class actions.   

Class actions involve additional costs beyond legal fees. These costs, known as “disbursements,” include expenses for expert witnesses, filing fees, administrative expenses, and other essential resources needed to build a strong case. In class actions, these disbursements are generally paid by the law firm representing the class. Law firms assume this financial risk, allowing affected individuals to participate in the class action without bearing these expenses. If the case is successful, these costs are typically reimbursed from the settlement or court award, ensuring the law firm is compensated for the resources it advanced on behalf of the class.  Like fees, these disbursements must be approved by the court.

Some Canadian jurisdictions, such as Ontario, have an adverse cost regime.  Adverse costs means that the losing party has to pay a portion of the winning party’s legal costs.  Class Counsel customarily provide an indemnity against an adverse costs award, meaning that Class Counsel will pay any adverse costs in the place of the representative plaintiff.  If Class Counsel is unwilling to provide an indemnity to a proposed representative plaintiff, the proposed representative plaintiff should seek independent legal advice before signing a retainer agreement.

In Ontario, there is also an additional layer of financial protection available through the Class Proceedings Fund. This fund was established to support plaintiffs in class actions by helping fund disbursements and any adverse costs.  

So, do you have to pay the lawyers involved in a class action? The answer is no. By joining a class action, you benefit from a system that shares the financial burden, allowing you to seek fair compensation and accountability without out-of-pocket legal expenses.

How does compensation work?

Compensation distribution in a class action can vary depending on the nature of the case and the number of people involved. Here’s how it typically works:

1. Settlement or Court Award: If the class action is successful, compensation may come from a negotiated settlement or a court award.
   
2. Distribution Protocol: Once compensation is secured, a distribution protocol is established. This protocol, which must be approved by the court, outlines how funds will be allocated among class members. Factors such as the severity of harm, individual losses, and the number of class members often influence distribution.
   
3. Notice of Claims Process: If the settlement and distribution protocol are approved, a notice will be published advising of the deadline and process for submitting a claim.  You should read this notice carefully.
   
4. Submitting a Claim: After a distribution protocol is approved, the settlement funds are then typically distributed to settlement class members by a third party appointed by the court. The third party, known as a “Claims Administrator” oversees the claims process and distributes funds in accordance with the distribution protocol.
   
   In most cases, you will need to submit a claim form to receive your share of the compensation.  Claim forms are typically submitted through an online claims portal, but usually paper claim forms are available for people without Internet access.
   
   The claim form requires information about your eligibility and may ask for additional documentation to verify your claim.  The documentation required depends on the nature of the case.  In some cases, such as a consumer claim, the claims process may not require any documentation, simply a declaration that you purchased the relevant product.  In a medical device case, you may need to provide medical and pharmacy records.
   
5. Claims decisions.  The claims administrator will review your claim and determine whether you are eligible for settlement benefits.
   
6. Direct Payment: Once your claim is approved, compensation is typically issued directly to you. Depending on the terms of the class action, payments are typically made by check or etransfer.

Bridget Moran, a class action lawyer at Siskinds LLP, provides a more in-depth guide to the compensation process in the blog post titled ‘I am affected by a class action. How does compensation work?‘

How do I protect my rights in a class action?

Protecting your rights as a class member involves staying engaged, informed, and responsive to communications. Here are a few steps to ensure you’re well-positioned to protect your rights:

1. Register to Receive Updates: Register to receive updates about the class action to stay informed of case developments. This will help you understand how the class action is progressing and what steps might be required of you.
2. Read Updates & Notices: Once a class action is filed, the law firm handling the case will typically send updates and notices to potential class members. These communications provide critical information about deadlines and your options for acting.
3. Meet Deadlines: Class actions often have strict deadlines for opting out, objecting to a settlement, submitting a claim, etc. Missing a deadline could forfeit your ability to participate in the class action and receive compensation, so be sure to mark these dates on your calendar.
4. Submit Documentation as Required: To confirm your eligibility and entitlement to compensation, you will need to submit specific documents. Make sure to respond promptly to any requests for documentation.
5. Ask Questions: If you have questions about your rights or the process, don’t hesitate to reach out to the firm handling the case. Class actions are complex and understanding your rights will help you make informed decisions.

To learn more about protecting your rights in a class action, consult our blog post, ‘How do I protect my rights in a class action?‘

What does it mean to “opt-out” of a class action?

When a class action is filed and certified by the court, eligible individuals who meet the class definition are typically automatically included unless they actively choose to “opt-out.” Opting out means excluding yourself from the class action, deciding not to participate in the class action, and preserving the right to pursue your own individual legal claim. This is an important decision with significant consequences. If you opt-out, you are not entitled to share in any settlement or court award from the class action and will not be bound by its outcomes. However, you retain the ability to bring your own lawsuit, which can be advantageous in rare cases where your circumstances are unique or your potential recovery in individual litigation could exceed what might be achieved as part of the class.

However, opting out also means that you forego the benefits of the class action, including shared legal representation and any settlement or court award. The notice of certification will outline the steps for opting out. Typically, this involves submitting a completed opt-out form or providing a written request to opt out. The notice will also specify the deadline by which you must opt out. Failing to act before the deadline means you remain part of the class and will be bound by the court’s decisions or any settlement reached.

With that in mind, the Ontario Court of Appeal’s decision in Johnson v. Ontario,[1] establishes the test for extending the opt-out deadline in class actions, outlining a two-part test that a class member must meet when it comes to late opt-outs. Specifically, the Court emphasized that the class member must show “excusable neglect” in failing to comply with the opt-out deadline and that granting an extension would cause “no prejudice” to the class, the defendants, or the administration of justice. The case involved a class member who failed to opt-out of the class action by the prescribed deadline and subsequently filed an individual action that overlapped with the class claims.  The class member argued that he was unaware of the class action due to inadequate notice.

The Ontario Court of Appeal found that his delay in opting out was the result of excusable neglect, as the notices had been sent to an address that he did not attend during the opt-out period. Furthermore, the Court determined that there was no prejudice to the class, the defendants, or the judicial process. Importantly, the Court clarified that while the adequacy of notice is not decisive, it does not automatically preclude late opt-out motions, emphasizing a nuanced approach to such cases. The Johnson v. Ontario decision reinforces strict adherence to court-imposed deadlines while balancing the individual rights of class members in exceptional cases.

Class action rules in Canada differ across the provinces, especially when it comes to how people opt out. The provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, Prince Edward Island, and Nova Scotia, follow an opt-out system. Class members are automatically included in the class unless they opt out.

On the other hand, New Brunswick and Newfoundland take a different approach. Residents of these provinces are included on an opt-out basis, just like in most other provinces; however, non-residents must actively opt in if they want to be part of the case. Courts in these provinces might also create separate groups – or subclasses – for residents and non-residents to ensure their specific legal needs are addressed.

You should read the notice of certification carefully to determine whether any steps are required to “opt in” to the class action.

Takeaways

Class actions serve an essential role in providing justice for groups of people affected by similar issues. Whether you’re seeking to join a class action, considering the cost implications, or wanting to understand how compensation works, having a clear grasp of your options is crucial. Staying informed and actively participating in the process allows you to make empowered decisions that protect your rights and maximize your potential compensation.

[1] 2022 ONCA 725.