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"Canadian Class Action Law: A Flawed Model for European Class Actions"

John Beisner, whose writings on class action law are often cited in this space, and his O'Melveny & Myers colleagues Allison Orr Larsen and Karl Thompson, have a new article in the Federalist Society's Engage (summary leads to article, PDF) warning EU policymakers away from a supposed "Canadian path":

Activists urging European Union nations to adopt the class action device have recently begun citing Canada as a model. Like the United States, Canada has adopted formal class action rules that permit plaintiffs to bring class proceedings. And there is a perception that, to date, Canada has been spared the sort of rampant, U.S.-style class action litigation that has been widely criticized for imposing "huge, avoidable, and unnecessary cost[s]" on the economy. Some European class action advocates have therefore suggested that Canada provides a guide to creating a class action regime without opening a "Pandora's box" leading to the American experience.

Unfortunately, they say, Canada's relatively new class action format is abnormally liberal on the key issue of class certification standards, which is likely to open especially wide dangers for abuse. At this early stage, the scope for such abuse is still seriously narrowed by Canada's loser-pays rule and severe restrictions on contingency fees, but abuses did not develop overnight in the United States, either. A certification standard even more liberal than that employed in U.S. courts is unlikely to provide a sound model for cautious Europeans to follow.

More: Canada's Bizop says it's worse than I think up there, and cites a class action against Toronto-Dominion Bank.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.