U.S. Chamber Warns Canadian Class Action Lawsuit System Increasingly Subject to Abuse

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March 23, 2015

WASHINGTON, D.C.—Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR), today issued the following statement on the increasingly lax certification standards and growth of third party litigation funders that are making the Canadian class action lawsuit system more vulnerable to abuse. Rickard’s comments accompany an ILR research paper, “Painting an Unsettling Landscape, Canadian Class Actions 2011-2014,” being released today in Toronto:

“We want Canada to import American products and services, but not the mistakes the U.S. legal system has made leading to rampant abuse of class action lawsuits. 

“Most class action lawsuits provide little or no benefits to class members, but almost always provide huge legal fees—often in the tens of millions of dollars—to class action plaintiffs’ lawyers.

“Recent confirmation by the Canadian courts of low class certification standards, and the convergence of other factors favorable to class actions, are setting the stage for increased abuse of this type of litigation across Canada.

“The growth of third party litigation funding is also fueling class action lawsuit abuse in Canada because it is a sophisticated scheme for gambling on litigation that rewards those who invest in the lawsuits, or the gamblers, at the expense of the class members themselves.”

ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the global, national, state, and local levels.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.