The Ontario Superior Court has delivered a landmark decision that serves as a stark warning to overzealous class action lawyers: pursuing litigation in the name of unwilling class members is an abuse of process, and attorneys who persist after the class disappears may be held personally liable for the employer's legal costs.
Class Action Without a Class
In Navaratnarajah v. FSB Group Ltd., Justice Edward M. Morgan decertified a proposed employment-status class action after 66 of 69 identified potential class members opted out. Of the three remaining, one had died and another could not be located, leaving a single representative plaintiff and his counsel pursuing a case on behalf of a class that had effectively ceased to exist.
The lawsuit originally alleged that insurance sales agents, described as producers, had been improperly classified as independent contractors rather than employees and were therefore owed statutory entitlements. On its face, the case resembled a conventional worker-protection lawsuit. However, many of those whom the plaintiff claimed to represent did not consider themselves victims. They valued their independent contractor status for its tax advantages, commercial autonomy, and ownership interests in their books of business.
Three Key Principles Established
The decision establishes three propositions that plaintiff counsel can no longer safely ignore. First, a proposed class action may be fundamentally defective when all the employees ostensibly represented do not share the interests, objectives, or desires of the representative plaintiff. Second, certification is not permanent — when virtually the entire class opts out, the proceeding will be decertified. Third, and most ominously for plaintiff counsel, lawyers who persist after the class has effectively disappeared will be held personally responsible for the employer's costs.
Justice Morgan had warned at the initial certification stage that the financial interests of class members might be hijacked rather than advanced. His warning proved prophetic. The court found that a class proceeding cannot function where its supposed beneficiaries reject both its premise and prosecution.
Implications for the Class Action Bar
Howard Levitt, the article's author, notes that class actions are intended to provide access to justice, but they become considerably less noble when lawyers pursue litigation in the name of employees who reject the lawsuit, its objectives, and the counsel claiming to speak for them. The decision makes clear that litigation brought in the name of unwilling employees can itself be an abuse of the procedure created to protect them.
Each of these risks — defective class composition, decertification, and personal cost orders — is known in theory. What this case demonstrates is how quickly they can converge in practice, and how little tolerance courts have when they do. The ruling serves as a prescient warning to the class-action bar that a class action without a class is not access to justice — it is litigation in search of a client.
