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Similarly, U.S. lawmakers implemented reforms to curtail the phenomenon
of so-called “strike suits” commenced without merit where the nature
of the claim is such that a sizable settlement can be extracted.16 Enhancing
the supervisory responsibilities of the courts was thought to address this
form of “legalized blackmail” that became frequent among the “entrepreneurial
sector of the legal profession in the United States known as the
‘strike bar’”, particularly with securities class actions.17
Amendments have been made in recent years to class proceedings
legislation in other Canadian jurisdictions to require court approval of settlements
and discontinuances before certification. For instance, amendments
to Alberta’s Class Proceedings Act18 came into force in March 2011
that expanded the requirement for court approval of settlements and discontinuances
to “a proceeding that is the subject of an application for certification”.
19 Even before that amendment, the Alberta Court of Queen’s
Bench expressed its view that it is “prudent for the parties to have any discontinuance
of a proposed class action reviewed by the Court”.20 The
Saskatchewan Court of Queen’s Bench similarly noted that “counsel out
of abundant caution … have been requesting court approval for pre-certification
settlements and discontinuances. The court has addressed such precertification
settlement or discontinuance applications pursuant to its
inherent jurisdiction”.21
Amendments to the CPA came into force in 2018 that switched B.C. from
an “opt in” jurisdiction to an “opt out” jurisdiction and established a framework
for the certification of multi-jurisdictional class proceedings.22 While
the definition of “class proceeding” was amended to include a “multi-
jurisdictional class proceeding”, no change was made to effect a requirement
for court approval of pre-certification settlements and discontinuances,
despite an aim of those amendments being to achieve greater
consistency across Canada.23 To date, there remains no requirement in the
CPA to apply for court approval of pre-certification settlements or discontinuances,
despite there being no principled reason for their exclusion.
INTERESTS OF PUTATIVE CLASS MEMBERS
While not directly parties to a proposed class action before certification,
putative class members are not strangers to the litigation and have rights
that are at stake and worthy of protection.24 When the settlement of an
uncertified class action is being considered, it is clear that the interests of
absent class members who are not getting the benefit of any settlement
may be affected.25 Courts have inherent jurisdiction to protect the interests
of putative class members from the outset of litigation commenced under