Lessons for overzealous class action lawyers in landmark court decision
An Ontario court ruled lawyers pursuing class actions without real class support may be personally liable for defendants' costs.Summary
The article examines the Ontario Superior Court decision in Navaratnarajah v. FSB Group Ltd., where a proposed class action of insurance sales agents was decertified after 66 of 69 potential class members opted out, leaving only a nominal plaintiff. Justice Edward M. Morgan found that continuing the litigation served only the lawyer’s interests and awarded the defendants $100,000 in costs, later holding class counsel personally responsible for the unpaid award. The ruling underscores three principles: a class action is defective when purported members do not share the representative’s interests, certification is not permanent and can be revoked when the class effectively disappears, and lawyers who persist after losing class support may bear the defendant’s costs. It warns counsel to verify genuine class-wide grievances before certification and to avoid treating the procedure as a means to secure fees while externalizing risk to impecunious plaintiffs.
(Source：Financial Post)