Seeking Recognition of Canadian Class Action Judgments in Foreign Jurisdictions: Perils and Pitfalls

AuthorJohn P. Brown
Seeking Recognition of
Canadian Cl ass Action
Judgments in Foreign
Jurisdictions: Perils and
John P. Brown1
There is a growing trend in Canadian class action settlements for defen-
dants to seek certification of a worldwide settlement class. Settling
defendants ask for such a class hoping to secure the broadest possible
release from liability. Plaintiffs are willing partners because a larger class
inevitably means a larger settlement. Conversely, when a settlement is
not involved and certification is contested, a defendant’s interests shift.
Rather than a worldwide class, a defendant argues for the narrowest (geo-
graphic) class possible.
Whether a worldwide class is certified for settlement purposes or
after a contested motion, there is a significant risk that a Canadian judg-
ment approving such a class will not be recognized or enforced in most,
if not all European countries. The result will be that defendants who
voluntarily paid for a worldwide release of their liability (in a settlement)
or who were ordered to pay damages on the basis of a “worldwide” class
(after a contested certification motion and trial) will not achieve the
“global” protection from future litigation that they expected because they
could still be subject to further litigation by “foreign” class members in
foreign jurisdictions.
Canada, the U. S., and Australia share similar class action regimes.
Notwithstanding these similarities, there are difficult issues with cross-
1 John P. Brown is a partner at McCarthy Tétrault LLP specializing in class
actions. He is the Vice-Chair of the Consumer Litigation Committee of the
International Bar Association and Chairman of the Task Force on International
Procedures and Protocols for Collective Redress.
VOL UME 4, No 2, march 2008 221
border enforcement of class action judgments between these countries,
and in the case of Canada, between provinces within the same country.2
Most European countries, in contrast, do not have class action legislation.
Some European countries are beginning to investigate and/or introduce
various forms of group or representative actions (which they refer to as
actions for collective redress) but these are almost exclusively opt-in
rather than opt-out actions.3 England, one of the few common law coun-
tries in Europe, is arguably the most advanced when it comes to repre-
sentative actions. However, even England continues to resist opt-out class
actions notwithstanding the comprehensive report to the Civil Justice
Council of England and Wales—Reform of Collective Redress in England
and Wales: A Perspective of Need—in which the author, Professor Rachael
Mulheron, argues very persuasively for an opt-out regime.4
The European Commission announced in March 2007 that it would
begin studying the viability of continent-wide collective redress legisla-
tion. The European Parliament supports this initiative. However, the ini-
tiative is not progressing quickly and there is a discernible bias towards
an opt-in approach. This is not surprising given that the most oft-cited
reasons in European countries for opposing class actions is that opt-out
class actions violate the fundamental principles of consent and party
autonomy or, more simply put, they violate the principle that one should
only become a claimant by asking to bring a claim and not by remaining
European countries are adamant that they do not wish to import the
abuses which they perceive to exist in the American class action model.
Features such as punitive damages, contingency fees and jury trials clash
2 See, for example, Lépine v. Société canadienne des postes, [2005] Q.J. No. 9806
(S.C.), aff’d 2007 QCCA 1092, leave to appeal to S.C.C. granted 31 January
2008, 2008 CanLII 3197 (S.C.C.) [Lépine].
3 There are two relatively long-standing opt-out regimes in Europe: Portugal
(1995) which has seen limited use, and Spain (January 2001) in which the
action can only be brought by a consumer or user organization. In July 2005
the Netherlands introduced an opt-out approach for settlement agreements in
mass claims. It has only been used on three occasions. Norway and Denmark
have recently passed legislation allowing limited opt-out claims (January 2008).
In both countries, the “main model” is still an opt-in regime, but an opt-out
model can be permitted by the court if the claims are so small (e.g. less than
$400) that it is unlikely they will be pursued individually. However, presently
in Denmark only the Danish Ombudsman is permitted to institute an opt-out
4 Civil Justice Council, 8 February 2008, online:
with their culture and traditions, and in some cases with their consti-
tutional principles. Europeans recognize that there are some important
differences between the U.S. and Canadian approaches to class actions.
Nonetheless, judicial acceptance of a Canadian class action judgment is
still some time away because most European countries are unwilling, and
in many cases are unable, for legal, constitutional, political, or public
policy reasons, to enforce a class action judgment.
In October 2006 the Consumer Litigation Committee of the
International Bar Association created the Task Force on International
Procedures and Protocols for Collective Redress. Over the course of the
following year the Task Force, which is comprised of lawyers, academ-
ics, and jurists from around the world, studied the issues relating to the
recognition and enforcement of foreign judgments for collective redress.
It released its report on this subject at the International Bar Association
conference in Singapore in October 2007. The report includes draft
Guidelines for Recognizing and Enforcing Foreign Judgments for Collective
Redress.5 The Guidelines have been distributed to legal, judicial, and gov-
ernment officials around the world for comment. They are intended to
address many of the issues raised in the discussions below.
B. Traditional Judgment Enforcement
Rules Are Not Enough
The enforcement of a Canadian class action judgment in a foreign juris-
diction raises complex and difficult issues. Virtually all jurisdictions
have laws, conventions, or treaties for the recognition and enforcement
of a foreign judgment in an individual action between named parties.
However, these time-honoured rules for the recognition and enforcement
of an individual foreign judgment are ill-suited to deal with the unique
due process, jurisdictional, and other issues created by a class action
judgment that purports to bind class members in multiple countries.
Although, at a minimum, the requirements set out in the existing rules
would have to be met before a class action judgment from one jurisdic-
tion would be recognized or enforced in another jurisdiction, additional
rules are required. This is because class actions create a new type of
claimant—one that did not exist when the traditional recognition and
enforcement rules were being developed.
5 See Appendix A, following this article [the Guidelines].

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