Cross-border Collaboration By Class Counsel in the U.S. and Ontario

AuthorEthan Preston
Ethan Preston1
In the modern world, both the opportunities for and necessity of mul-
tinational class actions are growing, if simply because many causes of
action involve more than one country. Cross-border collaboration and
cooperation by class counsel is a prerequisite to effective multinational
class actions. Although both Canada and the U.S. now have robust, well-
developed class action proceedings, class counsel have limited ability to
collaborate across their respective borders.
Differences in the law on attorneys’ fees form one of the most sig-
nificant barriers to cross-border collaboration by class counsel. The law
controls the economic viability of such collaboration on a number of
levels. Can counsel undertake class representation on a contingency fee
basis? Can local counsel share fees with foreign counsel? Can foreign
counsel participate fully in any class fee award? Finally, how are attor-
ney fees calculated? Class counsel are in a poor position to invest time
and capital in cross-border collaboration without a clear understanding
of its potential rewards (and its risks). Indeed, the attorneys’ fees laws
in the U.S. and Canada reflect very different policy choices. This article
explores the differences in the attorneys’ fees laws in the federal courts of
the U.S. and costs law in the provincial courts of Ontario. The article also
discusses the costs law of England and Wales, which is a helpful frame of
reference in comparing the U.S. and Ontario systems. Finally, this article
also touches on important ancillary issues such as the risk of adverse cost
awards, insurance against adverse costs, security for costs from foreign
plaintiffs, and offers to settlement that can shift costs.
1 Member, Kamber & Associates, LLC. The author is a class action attorney prac-
tising in Chicago, Illinois. A version of this article was presented at a Center for
International Litigation Studies conference in February 2007.
VOL UME 4, No 1, JUlY 2007 165
This publication is a testament to the fact that modern class pro-
ceedings are no longer strictly an American affair. American counsel will
recognize varying degrees of resemblance between U.S. Federal Rule of
Civil Procedure 23 and the rules enabling class proceedings in the federal
courts of Canada and Australia,2 the provincial courts of Alberta, British
Columbia, Manitoba, New Brunswick, Newfoundland and Labrador,
Ontario, Quebec, and Saskatchewan,3 as well as the Australian state of
Victoria.4 Even England and Wales stick a toe into the waters of class
proceedings with the group litigation order (GLO),5 although GLOs have
limitations that render them unsuitable as a replacement for class actions
in many situations.6
2 Federal Courts Rules, S.O.R./98–106, rr. 299.1–299.42 (Can.); Federal Court of
Australia Act, 1976, §§ 33A to 33ZJ (Cth.), online:
cth/consol_act/fcoaa1976249/notes.html (last amended 4 May 2006). See also
Garry D. Watson, “Class Actions: The Canadian Experience” (2001) 11 Duke
J. Comp. & Int’l L. 269; S. Stuart Clark & Christina Harris, “Multi-Plaintiff
Litigation in Australia” (2001) 11 Duke J. Comp. & Int’l L. 289; Alberta Law
Reform Institute, Class Actions, Final Report No. 85 (December 2000), online: (describing development of class pro-
ceedings in Canada, the U.S., Australia, and England).
3 Class Proceedings Act, S.A. 2003, c. C-16.5 (Alta.); Class Proceedings Act,
R.S.B.C. 1996, c. 50 (B.C.); Class Proceedings Act, C.C.S.M. c. C130 (Man.);
Class Proceedings Act, S.N.B. 2006, c. C-5.15 (N.B.); Class Actions Act, S.N.L.
2001, c. C-18.1 (Nfld. & Lab.); Class Proceedings Act, 1992, S.O. 1992, c. 6
(Ont.) [Ontario Class Proceedings Act]; Code of Civil Procedure, R.S.Q. c. C-25,
arts. 999–1052 (Que.); Class Actions Act, S.S. 2001, c. C-12.01 (Sask.).
4 Supreme Court Act, 1986, c. 110, §§ 33A–33ZK (Vict.), online: www.austlii. (last amended 23 April 2007).
See also Thomas D. Rowe, Jr., “Shift Happens: Pressure on Foreign Attorney-
Fee Paradigms from Class Actions” (2003) 13 Duke J. Comp. & Int’l L. 125
at 126–27, (discussing class action developments in the People’s Republic
of China, Indonesia, Sweden, Finland, Nor way, Scotland, and South Africa);
Edward F. Sherman, “Group Litigation Under Foreign Legal Systems: Variations
and Alternatives to American Class Actions” (2002) 52 DePaul L. Rev. 401 at
418–30 (describing EU, German, English, Australian, and Canadian class pro-
5 English civil procedure provides for group litigation orders [GLOs] and rep-
resentative actions. GLOs resemble class certification orders under Federal
Rules of Civil Procedure, r. 23, but diverge on several significant issues. Civil
Practice Rules [CPR] 19.6, 19.10–19.15 (Eng.); Civil Practice Directive [CPD]
19B (Eng.), online: (42d
ed., effective as of October 2006). See also Roger Horne, Yet Another Woolf Site,
online: (last updated January 2007) (a
remarkably useful and comprehensive cross-referenced, annotated version of
the CPR and the Practice Directives).
6 See Rachel Mulheron, The Class Action in Common Law Legal Systems: A
The global growth of class proceedings corresponds to an increased
need for cross-border cooperation by consumer class counsel: as cor-
porations become increasingly multinational and causes of action arise
in more than one country, consumers in different countries need their
lawyers to be able to work with each other.7 However, although class
proceedings are increasingly available around the world, this does not
necessarily make cross-border collaboration between class counsel eco-
nomically viable.
Compared with the other exotic flora and fauna that inhabit interna-
tional litigation and arbitration, the law of costs is, doubtless, a mundane
topic. However, it would hard to understate its practical significance.
The ability to enter into contingent fee agreements and to share fees
with foreign counsel are preconditions to collaboration on cross-border
class actions.8 Further, the method for calculating fee awards and the
cost of hedging against the risk of an adverse attorneys’ fee award may
determine whether such collaboration is economical. Finally, the law on
attorneys’ fees may even influence plaintiffs’ choice of claims and their
choice of venue.
This article makes three arguments that increased cross-border col-
laboration is required to meet the modern class litigant’s demands. First,
the modern global economy is increasingly interconnected — and,
consequently, companies’ malfeasances are increasingly multinational.9
Comparative Perspective (Oxford: Hart Publishing, 2004) at 77–111 (2004)
(reviewing deficiencies with English GLOs). See also Sherman, above note 4
at 422–24; Neil Andrews, “Multi-Party Proceedings in England: Representative
and Group Actions” (2001) 11 Duke J. Comp. & Int’l L. 249.
7 Ilana T. Buschkin, “Note, The Viability of Class Action Lawsuits in a Globalized
Economy — Permitting Foreign Claimants to be Members of Class Action
Lawsuits in the U.S. Federal Courts” (2005) 90 Cornell L. Rev. 1563 at 1588–
60. (describing foreign claimants’ need for access to class action procedure in
U.S. federal court).
8 Compare Rex R. Perschbacher, “Lawyers and Ethical Issues/Considerations in
Cross-Border Class Action Litigation” (2004) Mich. St. L. Rev. 735 at 738–51
(discussing impact of professional conduct rules about contingency fees and
unlicensed practice on cross-border class action litigation); Rowe, Jr., above
note 4 at 127–33 (describing how fee-shifting and attorney fees policies impact
availability and use of class proceedings).
9 U.S. Census Bureau, Trade in Goods (Imports, Exports and Trade Balance) with
Canada, online: (January

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