Cy-Pres as a Class Action Remedy - Justly Maligned or Just Misunderstood?

Class actions have an established place in Canadian and Australian legal systems but still attract considerable debate in practice, politics and the academy. One debate concerns whether there is any legitimate justification for class actions beyond the procedural facilitation of grouped proceedings. ‘Access to justice’ and ‘judicial economy’ are the goals commonly said to justify class action provisions. On one view, these goals can be achieved through civil procedures that have compensation as their sole remedial goal. At the same time, many jurisdictions that have created class action regimes also provide as another justification, the promotion of behavioural modification and deterrence of wrongdoers. The principal way behaviour is modified and deterrence is achieved is by ensuring that the wrongdoer is forced to internalise all the costs of any harm that may have resulted from the wrongful act, and - depending on the particular facts of the case and whether the cause of action supports recovery of profits - to disgorge any profits earned from the wrongful conduct. Compensating victims may partially and concurrently achieve deterrence if all victims can be identified and the true nature of their loss quantified. However, in many claims where a class action may be the most advantageous mechanism to compensate victims, not all victims may be able to be identified or, because the amount of each class member’s claim is small, the cost of administering the claim may outweigh any benefit to individual class members.