USA-Canada Class Actions: Trading in Procedural Fairness

Abstract

The US class action model and experience has influenced Canadian developments in collective litigation such that in recent years there has been a frenzy of legislative activity making class actions available virtually throughout the country. Now that two thirds of NAFTA is a class action zone, few policy obstacles stand in the way of actions covering both markets. For these to be viable, however, preclusive effect against class members in one country must be forthcoming for judgments or settlements rendered in the other country. In the first decision to consider this issue on the Canadian side, an Ontario appellate court held that an Illinois settlement was not binding on absent Canadian class members, on the basis of inadequate notice. Despite this negative conclusion, the judgment heralds a positive future for USA-Canada class actions by declaring a principle of recognition, dependant only on evidence of procedural fairness. This evidence is based on criteria well known to American doctrine and jurisprudence, namely adequacy of notice and of representation. The manner in which these requirements can be met is explored in the article, along with other possible means of enhancing efficiency and fairness in the context of cross-border class actions.