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| Patrick D. Fitzpatrick |
For counsel and parties considering a class proceeding, the case is a useful reminder that a workable class definition must do more than describe a group, it must fairly capture a shared legal interest.
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Background: What was at stake in Ingram v. Alberta?
The Ingram case was an action brought against His Majesty the King in Right of Alberta by individuals who owned and operated businesses who were adversely affected by the orders issued in the name of the chief medical officer of health to mitigate the impact of the COVID-19 pandemic (the CMOH Orders). Those original plaintiffs were successful in certifying their class and then brought the application underlying Ingram to add another class of plaintiffs made up of corporations and other business organizations that were affected by the CMOH Orders (the Proposed Corporate Class).
How did the court identify a conflict within the Proposed Corporate Class?
The court raised concern on this application with an apparent conflict between the members of the Proposed Corporate Class. Namely, the pleadings, written arguments and oral arguments made in support of the plaintiffs’ case revealed that the plaintiffs’ position was that the CMOH Orders harmed small and medium-sized business disproportionately and possibly benefited large businesses. The court’s concern was that the definition of the Proposed Corporate Class advanced by the plaintiffs included all corporations affected by the CMOH Orders, thereby including both “small” and “large” corporations.
The court found that there was a fundamental conflict of interest between small and large corporations embedded in the pleadings and in the written and oral submissions of the plaintiffs. Namely, “[s]mall corporations are painted as the victims of the CMOH Orders and large corporations are posited to be the beneficiaries. Whether or not there is truth in either of these suppositions, they pit the Proposed Corporate Class against itself.”
What options did the court give plaintiffs’ counsel to address the conflict?
Rather than dismissing the plaintiffs’ application because of this conflict, the court exercised its authority under ss. 6(1) of the Class Proceedings Act to adjourn the certification application to allow the plaintiffs to amend their materials. The court was satisfied that an adjournment was appropriate because the application to certify the Proposed Corporate Class, in its current form, posed “a significant threat to the efficient and fair administration of the proceeding.”
The court provided the following list of solutions to the plaintiffs for ways to amend their materials prior to the application being restored to the list:
a. amending the pleadings and application so that the action would seek certification only for a class of objectively defined small corporations;
b. amending the pleadings to reflect that the claim is pursued on behalf of all corporations without preferring corporations of any particular size;
c. proposing a sub-class or classes for corporations of different sizes;
d. appointing additional representative plaintiffs to represent the interests of corporations of different sizes;
e. obtaining separate legal representation for different classes of corporations: and
f. depending on what other steps are taken, addressing how the issue of the potential conflict of interest between classes of corporations in the conduct of the case will be described in the opt-out notice to be sent to the Proposed Corporate Class.
b. amending the pleadings to reflect that the claim is pursued on behalf of all corporations without preferring corporations of any particular size;
c. proposing a sub-class or classes for corporations of different sizes;
d. appointing additional representative plaintiffs to represent the interests of corporations of different sizes;
e. obtaining separate legal representation for different classes of corporations: and
f. depending on what other steps are taken, addressing how the issue of the potential conflict of interest between classes of corporations in the conduct of the case will be described in the opt-out notice to be sent to the Proposed Corporate Class.
Practical takeaways
The court in Ingram compared the issues that arose in the context of conflicts between members of a class of plaintiffs to those that arise when law firms engage in joint retainers with clients. Citing the Law Society of Alberta’s Code of Conduct, the court stated that before a lawyer takes on a joint retainer for two or more clients, the lawyer must not only obtain the consent of the clients but “ensure the joint retainer is in the best interests of each client.” The relevant question when a lawyer considers taking on a joint retainer is whether the lawyer will be able to demonstrate that each client “received representation equal to that which would have been rendered by independent counsel,” and when the answer to that question is “no,” then the clients should not be jointly represented.
The court acknowledged that the Code of Conduct did not apply to the situation at hand but also pointed out that it clearly illustrated the principles at play in this case. For counsel, the lesson is straightforward: before proposing a class, make sure the class members are not only aligned procedurally, but also aligned in substance. When different segments of a proposed class may be affected in different ways from the same conduct, counsel should consider whether subclasses, separate representative plaintiffs, separate counsel for different classes or a narrower class definition would better serve the proceeding.
Patrick D. Fitzpatrick is a partner in the Calgary office of Miller Thomson LLP who practices in dispute resolution and business law. He skillfully handles contractual disputes, intellectual property litigation, insurance defence and more. With a rich legal background, including time as a law clerk at the Supreme Court of Canada, he brings a wealth of experience to the table.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, LexisNexis Canada, Law360 Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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