Law in Quebec

News about Quebec legal developments


Class actions

  • Class action authorized against three accounting firms in Mount Real financial scandal

    Nearly six years after 1,600 investors were bilked, left holding an estimated $130-million of worthless promissory notes when Montreal financial group Mount Real Corp. was shut down by the Quebec securities regulator, a Quebec judge authorized a class action against two former executives, two financial service companies and three accounting firms.

    In a ruling that appears to have lowered the bar for class action certification against accounting firms, Quebec Superior Court Justice Jean-François Buffoni held that the representative plaintiff demonstrated that the allegations she is trying to establish between the fault allegedly committed by the accounting firms and the harm suffered by the class does not “appear to be frivolous nor manifestly unfounded” and stands a reasonable chance of succeeding, even though the representative plaintiff admitted that she did not rely on the audited financial statements to make an investment decision.

    “This ruling represents an important precedent regarding the civil responsibility of accounting firms,” noted Bruce Johnston, a Montreal lawyer for one of the three law firms representing the investors. “I hope it sends a message to auditors. It’s very important that auditors do their work properly and be held accountable if they fail to do so.”

    (more…)

  • New indemnity fund proposed following out-of-court settlement in Norbourg class-action

    Days after an agreement in principle was reached in the Norbourg class action suit, opening the door for thousands of investors to recover nearly all the money they lost in one of the biggest investment frauds in the country, questions surrounding the efficacy and scope of investor protection provided by the debt-ridden indemnity fund overseen by Quebec’s financial watchdog have surfaced.

    A group of investor advocates, financial professionals, and the body that oversees financial professionals in Quebec are beckoning the provincial government to cast a critical eye on the financial services compensation fund administered by the Autorité des marchés financiers (AMF), a call that Quebec Finance Minister Raymond Bachand seems to have heard. The finance minister recently requested the securities regulator to “see if something different should be put in place, how it should be done, while listening to industry.”

    (more…)

  • Few number of claimants prompts questions over class actions

    Nearly three decades after class actions made their first appearance in the Canadian legal landscape, little light has been shed over the proportion of class members who make a claim, which hasn’t stopped some from speculating that the numbers are so low that they call into question the need for class proceedings.

    “Where there is money set aside for individual plaintiffs and they have to apply for the funds, anybody who did the research would find that there’s very little uptake and the funds that are unapplied for are given to charitable organizations,” asserts William Vanveen, a former assistant law professor at the University of Windsor’s faculty of law, now a partner with Gowling Lafleur Henderson LLP in Ottawa. “The lack of application for relief to the funds by directly affected plaintiffs indicates to me that there isn’t a great social need for these actions.”

    (more…)

  • Norbourg: Law firms seeking $11 million

    A couple of days after an agreement in principle was reached in the Norbourg class action suit, allowing thousands of investors to recover nearly all the money they lost in one of the biggest investment frauds in the country, a lawyer warned me that the case was far from over.

    That’s because the $55 million settlement against Quebec’s securities regulator, Northern Trust Co. of Canada, Concentra Trust, accountant Rémi Deschambault and accounting firms KPMG LLP and Beaulieu Deschambault did not cover legal fees. “The judge in the case has opened a can of worms,” told me the class action specialist. “It’s unheard of to reach a settlement without agreeing to the legal fees.”

    The lawyer is right. The law firms that negotiated the settlement are seeking $11-million, representing 20 per cent of the $55-million settlement, in legal fees — and the victims are not happy. Three Norbourg victims are expected to be in court today arguing that the amount is far too much, with one saying that lawyers should be receiving up to five per cent while another asserting that 6.5 per cent is reasonable. “It’s disproportionate,” said François Leblanc, an industrial relations consultant whose family lost hundreds of thousands of dollars in the Norbourg scandal. “In my opinion, 6.5 per cent of the settlement is a reasonable remuneration. They’re calculating $400 an hour, which would give them salaries of $700,000 a year.”

    Quebec Superior Court justice André Prévost is expected to render a decision by month end. “I am conscious that the Norbourg investors have lived through difficult times,” said the judge yesterday. “The conclusion is approaching.”

  • News roundup: A truce, a crucifix and class actions

    A truce has ostensibly been declared by two men who dominated the legal and political scene in Quebec over the past year. Premier Jean Charest and former Justice Minister Marc Bellemare have seemingly dropped lawsuits against each other, launched in the wake of the judicial nomination scandal in the province.

    Nearly a year ago the former justice minister rocked Quebec with explosive allegations that powerful party fundraisers tainted the judicial appointment process six years ago. On the same day Bellemare lodged a formal complaint with Quebec’s provincial police force, Premier Charest launched a $700,000 libel lawsuit against the former justice minister for “false, malicious and defamatory remarks” and appointed former Supreme Court of Canada Justice Michel Bastarache to preside over a commission of inquiry into Bellemare’s allegations. Bellemare, in turn, sued Charest as well.

    The Bastarache commission made in late January sweeping recommendations to address “several weaknesses” in the Quebec judicial selection and appointment process “vulnerable to all manner of interventions and influence” even though it dismissed Bellemare’s allegations that he acted under undue pressure by Liberal Party fundraisers, with the consent of Premier Charest, in the appointment of judges.

    Last month the Quebec government introduced a series of new interim rules that drew tepid praise.

    In a press release issued yesterday, Bellemare gives a number of reasons for dropping the suit, surprisingly stating that the whole episode “was blown out of all proportion.” He also said that the lawsuits and the Bastarache commission “cost Quebec taxpayers millions of dollars.” Quebec taxpayers, however, were no longer picking up the tab for the legal battle the two protagonists were fighting against each other.


    Never mix politics and religion, so the adage goes. Jean Tremblay, mayor of the City of Saguenay, doesn’t buy it.

    The City and the mayor were recently ordered to pay $30,000 in moral and punitive damages by a Quebec Human Rights Tribunal to a citizen for discriminating against his freedom of religion and conscience, and to remove a crucifix and a Sacred Heart statue from city council meetings as well as to stop reciting a prayer before each city council meeting. “By reciting a prayer and displaying religious symbols in a hall where all citizens are invited to participate in the life of a democratic municipality, the Mayor and the City of Saguenay did not respect its obligation to remain neutral,” said the Tribunal.

    The outspoken mayor launched a campaign to collect funds for an appeal, and it’s working. So far, the city has collected more than $100,000, an indication that “Quebecers are attached to their identity, their tradition and their culture,” says the mayor.


    Quebec used to have a deserved reputation as being a haven for class action suits.

    The pendulum began to swing four years ago when the appellate court affirmed in Bouchard v. Agropur Coopérative et al the necessity of a legal relationship between the petitioner and all of the entities he wishes to sue. In Lallier vs Volkswagen Canada inc. and Del Guidice c. Honda Canada inc., the Court of Appeal established more precise criteria that place a higher burden on plaintiffs to pass the authorization stage, said class action expert Peter Richardson of Borden Ladner Gervais LLP. “These are criteria defense lawyers have been trying to plead for many years but maybe now are getting recognition,” said Richardson, who successfully pleaded the Volkswagen case.

    “It’s never been easy to obtain class action authorizations, but with these two rulings the Quebec Court of Appeal has certainly made it more difficult than ever,” remarked class action expert Fred Adams of Adams Gareau in Montreal.

    It may be more daunting but it is certainly possible. Over the past week Quebec Superior Court authorized two class actions.

    A class-action lawsuit launched by a Montreal sixplex building owner who blames Montreal’s aging sewage pipes for repeated flooding over the last five years was granted authorization. Eugène Robitaille is seeking $2,000 for each homeowner who signs on as well as the cost of repairs.

    Also granted authorization was a class action launched by Option consommateurs, a consumer rights non-profit organization, against furniture retailer The Brick for alleged misleading advertisement. Option consommateurs is seeking punitive damages of $5 million after it says The Brick claimed clients would not have to pay interest on financed purchases for 15 months. The suit says that clients are in fact charged an annual fee of $35.

  • Norbourg class action good business for lawyers

    A couple of weeks after an agreement in principle was reached in the Norbourg class action suit, opening the door for thousands of investors to recover nearly all the money they lost in one of the biggest investment frauds in the country, Quebec’s securities regulator is facing an expensive legal tab.

    The Autorité des marchés financiers (AMF) has incurred $12 million in legal expenses to defend itself in the Norbourg scandal, according to a French-language television network. The law firm Heenan Blaikie ostensibly charged $9.275 million.

    Over the past five years, five government bodies hired the services of private-sector lawyers at a cost of $51.9 million. Investissement Quebec spent $1.2 million, utility giant Hydro-Quebec $9.2 million, the Société générale de financement $9.8 million, the Caisse de dépôt et de placement du Québec $15.4 million — and the AMF $16.4 million.

    Marc Lajoie, head of the Association des juristes de l’État (AJE), a union representing nearly 1,000 lawyers, notaries, and other legal professionals now on strike, does not understand.

    “If they don’t have the money for prosecutors and government lawyers, then they surely don’t have the means to reach out to the private sector to hire people for cases,” Lajoie told me recently. “All we’re asking is that our salaries be pegged to the Canadian average.”

  • News roundup – Tainted water class-action, asbestos & $4.3 million condemnation

    Days before a class-action over tainted water opened, a lawyer representing citizens living in Shannon, a small town in Quebec, in its legal battle against the federal government and an ammunition company faced an audit by federal tax authorities. “I tried to explain that I should be devoting all my time to the trial for the next six months, asking them to delay the audit until July but they said no,” said Charles Veilleux. Questions are surfacing around the timing of the audit.


    A Quebec university suspended, with salary, a professor teaching psychology. Paul Bellemarre, a psycholgist, was suspended from practicing for two years by the Ordre des psychologues du Québec (a professional corporation that oversees psychologists) for committing uncalled for gestures on two patients several years ago, one of whom was a psychology student at the university. The Université du Québec à Trois-Rivières has been criticized for reacting slowly.


    The Supreme Court of India rejected an appeal to ban asbestos, on the grounds of “lack of specific data.” The nation’s highest court said that ‘what is required is better supervision and regulatory control rather than banning of the activity.” A  consortium of international investors that wants to buy Jeffrey mine in Asbestos, Quebec and increase chrysotile exports to developing countries salutes the landmark decision while groups calling for its ban decry the latest in “a long line of missed opportunities.”


    Quebec Superior Court ordered an enterprise, Roch Lessard 2000 Inc.,  to reimburse $4.3 million, plus court costs and interest, to the town of Saint-Augustin in Quebec, for failing to respect the terms of a contract it obtained to clean up muncipality’s water. The enterprise began its work in 2000 but stopped two years later after it sought to renogiate terms of the contract. The town used the services of another company to complete the work.

  • Class actions targeting law firms

    During a luncheon with colleagues recently, Eric Hoaken gave an informal presentation that turned out to be quite unappetizing as it raised the spectre of broader duties of care accompanied by prohibitive financial exposure and skyrocketing insurance costs for practitioners and law firms alike.

    In what appears to be the emergence of an unsettling development that has begun to attract the attention of the legal community, a series of class action suits armed with significant claims has waded its way through the Ontario courts, all of whom have named major law firms as defendants. In two of the three cases, the claims were brought by parties other than the clients of the law firm.

    (more…)

  • Lawyers expose themselves and law firms when taking on directorships

    A securities class action recently certified by the Ontario Superior Court of Justice highlights the perils of lawyers taking on directorships, draws attention to potential conflicts of interests and indirectly raises questions over privilege.

    While a growing number of law firms across the country have over the past few years discouraged partners from becoming directors due to conflicts of interest and increased exposure to suits, the class action certification will likely lead to even more wariness.

    “There certainly has been a chill over the last five years, and this certification may result in a further chill,” noted Wendy Berman, a partner in Heenan Blaikie’s Toronto office who practices commercial litigation with an emphasis on securities-related litigation. “It’s a difficult role, and law firms are starting to recognize that.” (more…)

  • Class actions not the appropriate procedure to quash muncipal by-laws, rules Supreme Court of Canada

    A deeply-divided Supreme Court of Canada recently held that a class action is not an appropriate procedure to challenge the validity of a municipal by-law in a ruling that may have an impact for all common law provinces even though the decision dealt with the Quebec provincial regime for class action authorization.

    In narrowly upholding a decision of the Quebec Court of Appeal by a five-to-four margin, some legal observers now wonder whether the ruling, Marcotte v. Longueuil (City), 2009 SCC 43, has curbed access to justice through class action by seemingly holding, among other reasons, that class actions are inappropriate for matters where summary disposition is appropriate.

    (more…)

  • Ruling may spell death knell for overtime class action suits

    A much-anticipated ruling keenly followed by federally-regulated employers and employees could sound the death knell of class action suits seeking compensation for unpaid overtime after an Ontario judge held that overtime claims are individual in nature and lack the essential element of commonality necessary to justify a class action proceeding.

    In a ruling that draws distinctions between overtime claims, clarifies the Canada Labour Code (CLC), and provides guidance over evidentiary considerations in certification motions, Justice Joan Lax of the Ontario Superior Court refused to certify a class proceeding that claimed $600-million in compensatory and punitive damages against the Canadian Imperial Bank of Commerce.

    “This ruling should give pause to plaintiffs considering overtime claims, no matter what the basis for the claim is,” noted Brett Ledger, a senior partner in the litigation department at Osler, Hoskin & Harcourt LLP in Toronto.

    (more…)

Law in Quebec
Privacy Overview

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognizing you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.