A Stricter Certification Test
The most substantive change is the introduction of superiority and predominance requirements to the certification test for class actions in Ontario—concepts that may be familiar to U.S. class actions lawyers. Echoing Federal Rule of Civil Procedure 23(b)(3), the amended Ontario statute now requires that the proposed class action be a “superior” way to determine the rights or entitlements of the class members, and that the questions of fact or law common to the class members “predominate” over the individual issues. If interpreted in line with U.S. case law, the new predominance requirement will likely affect what kinds of cases become class actions in Ontario, particularly in terms of cases that involve many individual issues, like product liability and personal injury actions. CPA, § 5(1.1)(a)–(b).
Earlier Motions Practice
The court will now hear any precertification dispositive motion by a defendant—a motion seeking to put an end to a proceeding altogether, or to narrow the issues for determination—before the certification motion, unless the court orders that the dispositive motion and the certification motion should be heard together. This replaces the traditional practice of usually hearing certification motions first, and opens the door for more motions to strike claims or for summary judgment at an earlier stage of the proceeding. Id. § 4.1.
Management of Multijurisdictional Cases
Like statutes in some other Canadian provinces, the Ontario statute now acknowledges multijurisdictional class actions. At certification, the court now has to consider whether a parallel class action has been started in another province and whether the Ontario action is the preferable means of resolving the relevant claims. Parties can also move, before certification, to stay the competing proceeding. Id. §§ 5(6), 5(8).
Registration of Class Actions
Unlike in the United States, plaintiffs are now required to register class actions under a new “general” regulation under the Class Proceedings Act, 1992, to build a National Class Action Database in Canada. Id. § 2(1.1).
Dismissal of Dormant Actions
Proposed class actions will now be dismissed automatically for delay unless, within a year of issuing the claim, the plaintiff has filed a “final and complete” motion record for certification. The plaintiff can avoid dismissal if the parties agree on a timetable or if the court fixes one. This is a major change from the old approach (of no deadline) and, notably, applies to existing proceedings. Id. § 29.1(1).
Faster Resolution of Carriage Disputes
Carriage disputes among competing counsel in overlapping class actions in Ontario now have to be filed within 60 days of the first action’s issuance. The court will then decide which action best advances the class members’ claims in an efficient and cost-effective manner, heeding each representative plaintiff’s theory of the case, the relative likelihood of success of each action, the expertise and experience of counsel, and the funding of each action. There are no appeals from carriage decisions—another major change that should help quicken the pace of Ontario’s class actions certification process as a whole. Id. § 13.1(3)–(5).
Parties now have the right to appeal from a certification order directly to the Court of Appeal for Ontario (the highest court in the province). Except in exceptional and unforeseen circumstances, plaintiffs now cannot materially amend their notices of motion for certification, pleadings, or notices of application on appeal from a certification order, so they cannot reframe their cases after the fact. Id. § 30(1)–(2).
More Settlement Approval Disclosure
A party seeking approval of a settlement must disclose information about the settlement, including why it is fair and reasonable, risks or possible recovery if litigation continues, the number of class members, and expected recovery. After settlement, the administrator must file a comprehensive report on the performance of the settlement. The court may hold back class counsel’s fees until it is “satisfied with the distribution of the monetary award or settlement funds.” Id. §§ 27.1(7), 27.1(16), 32(6).
Approval of Third-Party Funding
A plaintiff who agrees to receive third-party funding must obtain court approval of the agreement. The court will only approve a third-party funding agreement if it is fair and reasonable, it does not diminish the rights of the representative plaintiff to instruct counsel and control the litigation, and the funder can satisfy adverse costs awards. Once approved, and to the extent of the indemnity under the funding agreement, defendants will be able to recover costs awarded against the plaintiff directly from the funder and obtain security for costs when certain conditions are met. Id. §§ 33.1(2), 33.1(9), 33.1(11)–(12).
New Certification Notice Rules
The court must now make orders as needed to ensure that the certification notice in the proceeding is the best notice that is practicable under the circumstances. The notice must be recorded in both of Canada’s official languages (English and French) in a plain-language way, and the plaintiff must pay for the initial costs of providing certification notice unless the defendant consents otherwise and subject to costs if the plaintiff succeeds in the class action. Id. §§ 17–22, especially §§ 20(1)–(2), 22(1.1).
Time and judicial interpretation will tell the effect of these amendments on the Ontario class actions landscape. Meanwhile, if you have any questions about the information in this article, please contact a member of the Bennett Jones Class Action Litigation Group.
Gannon G. Beaulne is an associate at Bennett Jones in Toronto, Ontario, Canada. Katrina E. Crocker is an associate at Bennett Jones in Toronto, Ontario, Canada.