As 2021 draws to a close, Torys looks at how this year’s trends may impact Canadian class actions in the coming year.
What to expect: continuing to navigate Ontario’s new higher bar for class certification
This past year has shed some light on Ontario’s first comprehensive amendments to its Class Proceedings Act (the Act). The changes were the first in more than 25 years and came into effect on October 1, 2020. As we described last year, the most significant amendment was the introduction to the certification test of a preferable procedure threshold that adopts the predominance and superiority test set out in the U.S. Federal Rules of Civil Procedure.
As expected, this more onerous test for certification has had some impact on class action law and procedure in 2021 and will almost certainly continue to impact class actions in Ontario and country wide in 2022. While there has not yet been a comprehensive analysis of the new preferable procedure threshold, a handful of decisions have briefly considered the amendments and described the new criteria as “important differences to the certification process” that now include “minimum statutory requirements for a class action to be the preferable procedure to resolve the common issues”1.
Ontario courts have also provided some guidance on other notable amendments. In Dufault v. Toronto Dominion Bank2, the court confirmed for the first time that under the new section 4.1 of the Act, defendants in proposed class proceedings have a presumptive right to have pre-certification motions that can arguably dispose of the proceeding in whole or in part, or can narrow the issues or the evidence, heard and decided before certification. This approach differs from other jurisdictions as we have previously noted3. In Baroch v. Canada Cartage4, the court confirmed that, given the new provisions of the Act requiring the disclosure of third-party funding arrangements, these arrangements will impact the determination of reasonableness of contingency fee agreements and legal fee awards on settlements going forward. Finally, the drop-dead date for existing class actions under the new section 29.1 regarding mandatory dismissal for delay was October 1, 2021, resulting in defendants bringing motions to have stale claims dismissed.
The amendments to the Act appear to have impacted the number of class proceedings commenced in Ontario this year compared to previous years. In the one year since the amendments came into force, approximately 33% fewer class proceedings have been commenced in Ontario compared to previous years. This has coincided with a continued uptick in claims commenced in the Federal Court of Canada and other provinces such as British Columbia5.
What to expect: development of substantive law in Québec
While the number of new applications for authorization to institute class actions dropped in Québec in 2021, the same cannot be said regarding the number of active cases, which has continued to rise. As of writing, 236 authorized class actions are active before the Superior Court of Québec, the highest number ever, and a sharp increase over the past several years.
As more class actions head to trial, we expect to see further developments of the substantive law, particularly in areas such as consumer protection which are less likely to result in Superior Court judgments outside the class action space given their relatively low value for individual plaintiffs.
What to expect: the continuing rise of employment class actions, COVID-19 related claims, consumer protection claims and privacy class actions
Proposed employment class actions are on the rise and we expect this trend to continue into 2022. Recent discrimination class actions on the basis of sex, gender, sexual harassment, race and, more recently, pay-equity based claims continue to be launched. In some instances, courts have been hesitant to allow these claims to proceed by way of class action, citing more preferable ways for those claims to proceed, such as through the human rights administrative processes available in most jurisdictions6. However, given the increase in these claims, and the continued evolution of how these claims are being pleaded (for example, to include allegations of breach of contract, breach of implied undertakings and breach of common law duties of care7), 2022 is likely to shed further light on whether discrimination cases will be seen by courts as preferable for class action treatment.
The continued rise of the gig economy is also likely to result in increased claims related to the misclassification of employment status (such as the proposed class actions against Amazon, SkipTheDishes, and Uber in recent years). Proposed employment class actions seeking damages for vacation and holiday pay are also likely to see continued filings in 2022, although Ontario courts have recently been hesitant to certify these types of claims because of their individualistic nature8.
After the initial surge of COVID-related class actions in the early days of the pandemic, the number of new cases waned through 20219. Nevertheless, as the harms of the pandemic continue to crystallize and the time bar date approaches for certain causes of action, we expect the number of related class actions to rise in early 2022, particularly in the common law provinces.
COVID-19 consumer protection related class actions seeking compensation for death, illness, the scope of business interruption insurance, services not provided, and refunds not granted were the subject of first-instance class action authorization and certification judgments in the past year. The demonstration of an identifiable class and of common issues susceptible to advance the action have proven to be difficult burdens for plaintiffs to overcome in these actions10. Appeal decisions regarding many of the initial COVID-related authorization and certification judgments are expected in 2022.
Lastly, the continued evolution of the jurisprudence on privacy class actions has resulted in Canadian courts developing a theory of liability in data breach class actions that depends on evidence of harm. Courts have been focused on the type of information concerned and the actual, rather than feared, consequences of a breach. This may impact the rate at which these types of claims are brought going forward into 2022.
What to expect: guidance on multi-jurisdictional class actions
As multi-jurisdictional class actions have proliferated in recent years, some Canadian courts have initially leaned towards certifying or authorizing actions bringing together in a single forum, members from multiple jurisdictions where different laws may apply. On the merits, the complexity of proving the scope of laws which apply to each member of a broad class has proven to be a difficult burden for plaintiffs to overcome, and initially broad groups are often reduced to a single jurisdiction after lengthy proceedings.
We expect 2022 to provide guidance regarding the effects of broad classes on the tolling of claims outside the forum in which an action was certified or authorized. The framework surrounding the settlement of claims of national or even worldwide classes will continue to develop in the coming years as the benefits of a uniform settlement will be weighed against jurisdictional specificities.
Takeaways for business
Changing landscape of Canadian class actions. As Ontario becomes less class-action friendly, in part because of a more onerous road to certification, more complex litigation may emerge and companies will want to be mindful of class actions arising in jurisdictions where there are lower bars to certification, such as in Western Canada. Meanwhile, in Québec, more class actions are going to trial, which heightens the potential risk of more costly and protracted litigation.
Employment class actions on the rise. As we see more employment litigation generally, including discrimination and harassment-related claims, organizations should be aware that more of these types of class actions are potentially on the horizon.
More consumer protection class actions. Consumer-facing businesses in particular will want to keep watch on this growing area of class actions, including in Québec, particularly as COVID-related consumer protection claims are being heard by courts. More broadly, as time limitations loom for certain COVID-related actions, we may see a surge in pandemic-spurred class actions being brought in 2022.
Evolving approach to privacy breaches. Courts are addressing data breach and other privacy related class actions with a theory of liability that depends on evidence of harm rather than feared consequences of a breach. This may lead to a higher bar for plaintiffs bringing privacy-related class actions.
Arsalani v. Islamic Republic of Iran, 2020 ONSC 6843, at para. 153.
Data taken from the Canadian Bar Association’s class action database.
See for example: Lewis v. WestJet Airlines Ltd., 2021 BCSC 228.
See for example the recently filed statement of claim in Thompson et al v. Her Majesty the Queen (13 May 2021), Toronto T-1458-20 (FCTD).
See for example: Curtis v. Medcan Health Management Inc., 2021 ONSC 4584.
In Québec, for example, approximately 20 COVID-related applications for authorization to institute a class action were filed in 2020. As of the date of writing, none have been filed in 2021.
See for example Lachaine c. Air Transat AT inc., 2021 QCCS 2305 (as later rectified) and Beaulieu c. Procureur général du Canada, 2021 QCCS 4559.
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