January 28, 2004
Recent Supreme Court and Ontario Superior Court of Justice rulings signal that Canadian courts may view foreign civil judgments as binding in both traditional and class-action proceedings—suggesting that punitive damage awards ordered by U.S. juries will be enforced in Canada.
Some corporate litigators warn that Canadian corporations should brace for more class actions in the United States as plaintiffs' counsel try to extend U.S.-sized damage awards into Canada.
But Sheila Block says the development may have at least one positive aspect: fewer copycat class-action lawsuits could be filed in Canada, making it easier for corporations named as defendants in cross-border class actions to litigate, or settle, in one shot.
"Mostly, that's probably a good thing if you're a defendant because it takes the guesswork out of how many people are going to line up and claim the benefits and so on," says Sheila. "Now if you weren't going to have a class action in Canada, then it's bad news. But today, people monitor what's going on in the United States. They read the pleadings, and start their own case up here if it's a cross-border company that's providing goods or services in both countries. So you were likely going to get sued up here anyway. Any time you're settling a class action, you want to get as wide a description of the class and as wide a description of the matters you're settling, and as big a release as you can. As a defendant, you want to draw a bright line in the sand and say, 'It's over with. We don't have to worry about this anymore.'"