Ethical, Professionalism Issues Attract Attention Of Courts In Class Actions

Class action litigation is a unique part of the legal universe in Canada. These special cases tend to have a high profile and affect a wide range of stakeholders on both sides of a deeply adversarial divide.

Class actions are the result of a deliberate legislative action to address recurrent weaknesses in the modern legal system for claimants, such as economic barriers to accessing the courtroom, other natural imbalances in procedural power and lack of access to skilled advisers.

They also have special technical and procedural machinery that sets them apart from other kinds of litigation — the certification motion and requirements to notify class members, for example. Because of the scope and impact of these proceedings, public policy elements also play a regular role in such cases.

As a result, class actions can give rise to a number of ethical and professionalism issues that do not occur elsewhere. It is useful to highlight some professionalism issues found in recent case law that could only arise in the class action context.

'Carriage' disputes

Put simply, a carriage motion is necessary where there are multiple class actions filed in the same jurisdiction, all seeking to prosecute essentially the same case. Multiple filings cannot be permitted to stand and only one case can move forward. In a carriage motion, the case that is selected will move forward and all others will be stayed or dismissed.

Carriage motions allow clear mandates to be created so that cases can proceed to a certification motion and a resolution on their merits. The problem is that they can balloon into heavy litigation quite quickly, and disputes between competing candidates for carriage will delay progress in the case. In addition, the defendant stands on the sidelines watching the competing would-be class counsel highlight the other's weaknesses.

Most firms on the plaintiff side quickly resolve carriage issues and get on with the case. But in other cases, it is clear that there are heavily mismatched objectives between contestants. There can even be examples where it appears one party's objective might be to contest carriage in order to negotiate a share of fees that will be earned by the successful counsel in exchange for standing down. In those circumstances, is a fee-sharing agreement acceptable, since it dispenses with delay and other difficulties, or is the whole concept an outrage that should be prohibited? Therein lies the ethical question.

In Bancroft-Snell...