Class actions, Legal business, Quebec, Quebec Superior Court
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Montreal lawyer disqualified as representative counsel in proposed cryptocurrency class action

Lawyer disqualified from proposed class action

In a case that deals with the bounds of “entrepreneurial lawyering” and whether it exceeds the “proper limits of ethical rules,” Quebec Superior Court disqualified a Montreal lawyer as the representative’s counsel in a proposed class action suit seeking compensatory and punitive damages for individuals who bought or sold cryptocurrencies from Shakepay inc.

The proposed class action in essence alleges that Shakepay charged hidden commissions, contravening the Consumer Protection Act, Civil Code of Quebec, and the Competition Act.

Justice Lukasz Granosik said that disqualifying a lawyer requires a “great deal of circumspection.” But a combination of “minor transgressions” occurred in this case crossed the line, held Justice Granosik in Abicidan c. Shakepay inc., 2024 QCCS 11.

At issue was the Application for Authorization (or Certification) for the class action. There were two versions:

The first version stipulated:

On September 27, 2022, the Applicant sent a message to Shakepay’s online chat support explaining the above situation and asking for an explanation, as it appears from the chat transcript.

The applicant, Shay Abicidan, amended the application and the relevant claim now reads:

On September 27, 2022, some five days after the transaction mentioned in paragraph 95, the Applicant directed his attorney to send a message to Shakepay’s online chat support, using Applicant’s Shakepay account, describing the above situation and asking for an explanation, as it appears from the chat transcript.. As it appears from this chat transcript, this communication was meant to obtain a proof and an admission from Shakepay that it was conscious of its practice, which the Applicant considers illegal, and the exchange of messages did indeed contain this proof and admission. (my emphasis)

Amendments to modify allegations are commonplace as are actions taken by lawyers of record in preparation for proceedings, particularly in class actions, said Justice Granosik. But in the case at hand,

  • by failing to draft an allegation correctly, “knowing full well that it is misleading and does not correspond to the truth;”
  • contacting the representative of a person, “who will inevitably become an opposing party a few days later, for the purpose of extorting an admission essential to part of the syllogism of the proposed class action”
  • and, above all, “usurping the identity of one’s client for that purpose, creates a malaise such as, in my opinion, to bring the administration of justice into disrepute.”

“I am convinced that it would not be acceptable to a reasonable, well-informed person (or to a jurist or layperson) for a lawyer to impersonate his client, the co-contractor of the defendant, for the avowed purpose of obtaining a crucial admission in anticipation of an imminent judicial proceeding,” said Justice Granosik, adding that articles 193 of the Civil Code of Procedure and 111 and 116 of the Code of ethics of advocates are at issue here.

But even though the lawyer was disqualified, the plaintiff cannot be held liable for any breach, personally or by proxy, held Justice Granosik. Shakepay failed to show that the application for authorization was ill-founded, frivolous or dilatory or that it was used in an excessive or unreasonable manner, added Justice Granosik. 

As a result, the application for authorization may stand, and the proposed class action representative may continue his action.

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