On December 9, 2019, Ontario’s Attorney General introduced Bill 161, the Smarter and Stronger Justice Act, 2019 to “simplify a complex and outdated justice system”.
Among the omnibus legislative reforms are the first comprehensive amendments to Ontario’s class actions regime since its introduction in 1993. One of the government’s stated objectives in reforming the Class Proceedings Act (CPA) is to ensure that “businesses experience fewer financial and reputational risks”1. We provided a summary of the significant amendments in an earlier Torys bulletin. Here we examine whether the government’s proposed changes to the CPA are likely to be beneficial to defendants; in particular, we consider the proposed amendments:
raising the bar for certification through a new test for preferable procedure;
requiring courts in Ontario to account for the existence of class actions in other provinces;
broadening the courts’ power and discretion on carriage motions; and
directing courts to dismiss proceedings for delay.
A new test for preferable procedure
Arguably the most significant amendment to the CPA is the introduction of a new preferable procedure threshold as part of the five-part certification test. Currently, to meet the certification test, a plaintiff bears the burden of proving that the proposed class action is a “preferable procedure for the resolution of the common issues”2. The plaintiff must lead “some basis in fact” to prove that a class action is: a) a fair, efficient and manageable method of advancing the claim; and b) preferable to other reasonably available means of resolving the claim. The leading case interpreting the preferable procedure requirement is the Supreme Court of Canada’s decision in AIC Limited v. Fisher3. In that case, the Court set out five inquiries to resolve preferable procedure. Those inquiries assess whether a class action or another procedure would achieve the principal goals of class actions, namely judicial economy, behaviour modification and access to justice. Bill 161 would substantially modify that approach.
In a nod to our neighbours to the south, Bill 161 amends the preferable procedure test to adopt almost verbatim the predominance and superiority test set out in the rules for class action certification in the U.S. Federal Rules of Civil Procedure4. The proposed amendment directs Ontario courts to find that a class proceeding is the “preferable procedure” only if, at a minimum:
(a) it is superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant; and
(b) the questions of fact or law common to the class members predominate over any questions affecting only individual class members5.
The text of the proposed amendment signals a more onerous test for certification. What remains to be seen, however, is the extent to which Ontario courts will adjust their approach to preferable procedure if the amendments are enacted. If Ontario courts follow the clear legislative intent to raise the bar for certification, there may be new grounds “to protect the defendant from being unjustifiably embroiled in complex and costly litigation”6. This is clear from the experience in the United States where the predominance and superiority criteria have led courts to refuse certification where proposed claims raise:
material differences in the various state laws governing class members’ claim;
a large number of individualized factual issues; or
individual legal issues such as causation or reliance.
A note of caution: Canadian class action judges have not historically followed the approach to certification of their U.S. counterparts, going so far as to have expressly rejected a predominance test. This is true even though class proceedings legislation in other provinces, such as British Columbia and Alberta, requires that courts consider the “predominance” of common issues over individual ones when considering preferable procedure7. An early example of Ontario courts refusing to follow the U.S. approach to predominance was former Ontario Chief Justice Winkler’s rejection of the U.S. approach, holding that “[an] action might well be suited for a class proceeding where the individual issues predominate over the common issues on a simple numerical basis”8.
The most common explanation offered by Canadian courts for refusing to follow the U.S. approach has been the significant differences in the legislative tests for certification. Indeed, in Fischer, in articulating a Canadian approach to preferable procedure, the Supreme Court of Canada noted the differences in the language of section 5(1)(d) of the CPA and U.S. Rule 23(b)(3)9. However, if the proposed amendments come into force, those differences will be no more.
Multi-jurisdictional class actions
Bill 161 proposes to give Ontario courts new powers to deal with “multi-jurisdictional” class proceedings, which are those cases brought on behalf of residents of two or more provinces or territories. Defendants often face overlapping and duplicative class actions that propose to represent the same or similar classes in multiple provinces. To date, defendants have been left with few options to deal with them in Ontario. The Uniform Law Conference of Canada proposed legislation to give courts those tools in 2005, and those provisions have now been enacted (with minor variations) in the class proceedings laws in British Columbia, Alberta, and Saskatchewan10.
Those laws require courts to consider the existence of overlapping multi-jurisdictional class actions and whether it would be preferable to have some or all of the claims resolved in another jurisdiction. The lawyers in the other cases have standing to make submissions on those issues, and the laws each set out factors that judges must take into account in reaching a decision. Bill 161 would add similar requirements into the CPA.
One question raised by these laws is the stage at which that analysis should take place. From a defendant’s perspective, it should be as early as possible to avoid expending resources (both those of the parties and of the courts) dealing with multiple certification motions in multiple provinces. Many courts, including the BC Court of Appeal, have reached the opposite conclusion, reasoning that the issue should be dealt with at the certification motion unless the defendant can demonstrate that the actions are completely duplicative11.
Bill 161 specifically addresses this issue. Proposed section 5(8) would permit a court to decide before the certification motion whether an overlapping proceeding in another province is preferable to the Ontario case (and to therefore stay the Ontario proceeding). Whether courts will do so remains an open question, though this provision seems to be a clear legislative response to the case law from other provinces deferring the issue to the certification hearing.
Bill 161 gives Ontario courts new powers to deal with a similar issue to overlapping proceedings in multiple provinces: overlapping proceedings in the same province. Where two or more representative plaintiffs start claims related to the same subject matter, the court is asked to decide which one should go forward. Bill 161 proposes new deadlines and rules for carriage motions that will speed up this phase of the proceeding, and sets out specific factors that must be considered by the court in determining which proceeding should go forward. Among other things, the court is to have in mind the proposed case theory, relative likelihood of success, expertise and experience of each counsel team, and the funding of each proceeding (including the existence of third-party funding).
On the timing front, Bill 161 requires that a carriage motion be made within 60 days of the day on which the first proceeding was commenced, and that it be heard “as soon as is practicable.” The costs of carriage motions are not to be recovered from class members or from defendants, and there are to be no appeals from a carriage decision. Bill 161 also bars the commencement of proceedings involving the same or similar subject matter without leave of the court if more than 60 days has passed since the existing proceeding was commenced. These provisions should provide defendants with more timely certainty about the case they have to meet, at least in Ontario.
Dismissal for delay
Finally, in a move to foster greater certainty and finality, the amendments direct courts to dismiss proceedings for delay unless one of the following occurs within one year of the claim being commenced:
the representative plaintiff files “a final and complete” certification motion record;
the parties agree to (and file) a timetable for service of the motion record or for other steps required to advance the proceeding;
the court orders the proceeding not be dismissed, and establishes a timetable; or
any other steps required by regulation have taken place.
Although this amendment appears to be designed to relieve defendants of “dormant” proceedings, courts are afforded discretion to not dismiss the proceeding and to establish a timetable instead. Past experience with Ontario courts suggests that defendants should be cautious in concluding this new tool will result in class actions being dismissed. It may, instead, become an impetus for greater case management of class proceedings, and more active class proceedings, since plaintiffs will be required to secure and comply with procedural timetables.
1Better, More Affordable Justice for Families and Consumers, Ministry of the Attorney General Backgrounder, December 9, 2019, available here.
2Class Proceedings Act, s. 5(1)(d).
3AIC Limited v. Fischer, 2013 SCC 69.
4 Rule 23(b)(3) sets out the predominance and superiority test.
5 New section 5(1.1) of the CPA.
6Robertson v. Thomson Corp. (1999), 43 O.R. (3d) 161 (Gen. Div.) Justice Sharpe held that the certification motion was a screening device to achieve this end. His guidance has arguably not been followed more recently.
7 See British Columbia’s Class Proceedings Act, R.S.B.C. 1996, c. 50, s. 4(2)(a), and Alberta’s Class Proceedings Act, S.A. 2003, c. C-16.5, s. 5(2)(a). These provisions make predominance of common issues over individual ones a factor the court must consider in the preferable procedure analysis, a different approach from that in Bill 161.
8Carom v. Bre-X (1999), 44 O.R. (3d) 173 (Gen.Div.).
9Fischer, para. 20. In the other leading case on preferable procedure from the SCC, Hollick v. Toronto (City), 2001 SCC 68, the Court also distinguished between section 5(1)(d) and the predominance requirement in Rule 23(b)(3).
10 The Canadian Bar Association has also urged the adoption of provisions to deal with multi-jurisdictional class proceedings, and has issued a protocol for the management of multijurisdictional class actions, which has been adopted by the superior courts in various provinces through practice directions. Torys’ bulletin on the CBA protocol is available here.
11 See, e.g., Fantov v. Canada Bread Company, Limited, 2019 BCCA 447, para. 66, adopting the reasoning of the Saskatchewan Court of Queen’s Bench in Brooks v. Canada (Attorney General), 2009 SKQB 54. Compare Ammazzini v. Anglo American PLC, 2016 SKCA 164, paras. 56-57, also discussed in Fantov at para. 59.