Ontario is seeking to reshape the 25-year-old rules governing class-action lawsuits, proposing changes that critics say would make it easier for corporations and government to get many cases thrown out of court.
Some of the biggest class actions over mass harms in Canadian history – tainted blood, contaminated water supply in Walkerton, Ont., and residential schools for Indigenous children – might never have made it past a preliminary stage if the new rules had been in place at the time, legal academics, some practitioners and organizations say.
Under Ontario’s Bill 161, introduced in December, the government would change the test for certifying class-action lawsuits, a step required for a case to move forward. The current test requires that the claims of the class members raise common issues – meaning everyone’s case is based on similar issues of fact or law – and that a class action is preferable to other procedures such as individual lawsuits.
The new test, however, would require that a class action is the “superior" process to resolve the claims, and that the same facts or legal issues “predominate” in every person’s case. This sets a higher bar because many cases – such as negligence claims related to product liability or personal injury – involve a range of differing personal circumstances or damages.
The proposed changes are being considered just months after a new law took effect that makes it more difficult to sue Ontario government agencies for negligence or wrongdoing. That law is already facing court challenges.
The latest proposed changes followed lobbying by business-friendly groups such as the Canadian Bankers Association, the Canadian Life and Health Insurance Association and the International Association of Defence Counsel. Those groups pressed for even tougher changes to the certification stage, arguing it should include a test of the merits of the claim.
What the government’s proposed changes mean will ultimately be defined by the courts over time. But lawyers who work with the people who bring the lawsuits say it appears to alter the balance between defendants – who tend to be large corporations and governments – and the plaintiffs who sue.
Kirk Baert, a lawyer who represents plaintiffs at one of Ontario’s most prominent class-action law firms, Koskie Minsky LLP, said he believes the government is trying to limit its own liability, both through the new Crown Liability and Proceedings Act, which took effect in July, and the recent proposed changes to class-action law.
“If you take the two of them together, what’s the common denominator? It will make it tougher to sue the province of Ontario. That’s the real motivating force here.”
The Law Commission of Ontario (LCO), an independent law-reform agency, spent two years studying class-action law and rejected changes to the certification test in a report last summer. The commission wrote to Attorney-General Doug Downey in late January urging the government to remove them.
“Bill 161 will effectively restrict class actions and access to justice in a broad range of important cases, including consumer matters, product and medical liability cases, and any potential class actions where there may be a combination of common and individual issues,” Andrew Pinto, then the LCO chair, wrote in a letter. (The federal government has since appointed him as a judge.)
Jenessa Crognali, a spokeswoman for Mr. Downey, said the proposed changes “are largely informed by the LCO’s report and recommendations.” The bill makes a number of other procedural changes that have attracted less controversy. But Ms. Crognali would not explain why the government rejected the commission’s advice to maintain the existing certification test.
She added: “The proposed changes would not preclude individuals from seeking redress from other remedial avenues, but rather, these changes would ensure that a class action is the most appropriate procedure to obtain that redress.”
Class actions are intended to be a legal tool for challenging “mass wrongs,” Nye Thomas, the LCO’s executive director, said in an interview. They give people with limited resources a chance to seek access to justice for claims they could not otherwise afford to pursue. For instance, they allow plaintiffs to share the costs in lawsuits where expensive evidence from medical experts is required. And lawyers can charge contingency fees, where they collect their fees only if they win.
Ontario was the second province to introduce class-action legislation, in 1993, followed by several other provinces over the following 15 years. No other Canadian province has the same rules as Ontario’s proposed new test for certification, which echoes the test used across the United States.
Stanford University law professor Janet Alexander said early interpretations of the U.S. test were “relaxed” and allowed many class actions to go forward. But recently the courts have “choked off class actions in a lot of different contexts,” she said. As a side effect, individuals unable to use class actions have banded together in multijurisdictional cases called joinders, which she said has clogged federal courts.
Jasminka Kalajdzic, one of two principal researchers on the LCO’s report, said the government is sending a clear signal to restrict class actions. “And for those of us who believe that the class action device is a really important part of our civil justice system, that signal is worrisome,” said Ms. Kalajdzic, a University of Windsor law professor and director of the school’s class action clinic.
Lawyers who typically represent defendants say the changes are meant to improve efficiency and reduce delays by limiting the class-action procedure to cases that share the same primary issue.
“If cases go forward which are not suited to class actions, then the appearance of access to justice is an illusion, and unsuitable cases can get bogged down and become unmanageable,” said Laura Fric, a litigation partner at Osler, Hoskin & Harcourt LLP who defends many companies facing large class actions.
Bill 161 was introduced in the Ontario legislature on Dec. 9 and passed first reading.