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U.S. PLAINTIFF'S FIRM'S INVOLVEMENT SINKS CANADA CLASS ACTION
By Beth Posno and Robin Linley of Blake, Cassels & Graydon
On November 14th, 2006, a class action certification decision was released that will impact on the way the plaintiffs’ class action bar in Canada co-ordinates their activities with U.S. plaintiffs’ counsel, an increasingly common occurrence in Canada. In Poulin v. Ford Motor Co. of Canada (Poulin), Justice MacKenzie of the Ontario Superior Court denied certification in a proposed class action with respect to allegedly defective door latch mechanisms in certain vehicles sold in Canada. In denying certification, Justice MacKenzie found that the proposed representative plaintiff would not adequately represent the proposed class as the representative plaintiff had been effectively recruited by plaintiff’s counsel and lacked any real knowledge or interest in advancing the case. The Court was also concerned with the “co-counsel association agreement” between Canadian plaintiffs’ counsel and the U.S. plaintiffs’ class action firm Motley Rice LLC. It is expected that so-called co-operation or association agreements as between plaintiffs’ counsel north and south of the border will face increasing scrutiny by Canadian courts as a result of this decision.
It is not uncommon for U.S. law firms who have brought class actions in the U.S. to look to Canada with a view to importing their accumulated knowledge and expertise in order to create a “copycat” action in Canada. In Poulin, the well-known U.S. plaintiffs’ law firm Motley Rice had initiated several individual lawsuits in the United States with respect to allegations of faulty door latch mechanisms. Due to the low class certification threshold in Ontario, however, the decision was made to move for certification of a class action in Canada first. Subsequently, Motley Rice entered into a co-counsel agreement with Canadian plaintiff’s counsel in which it agreed to fund and provide guidance in support of a class action claim in Canada.
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