Class Actions in Canada: 2005 State of the Union: Growing, Expanding, and Developing

Growing, Expanding, and Developing CLASS proceedings in Canada are a relatively recent development, with exponential growth in the number of cases being brought over the past five years. Quebec was the pioneer, introducing class action legislation in 1978, with Ontario and British Columbia following suit in 1992 and 1996, respectively. Most recently, in 2004, Alberta became the seventh province to enact comprehensive class actions legislation. Copycat class actions, based on U.S. proceedings, are common in Canada today, and Canadian plaintiffs' counsel are frequently working with their U.S. counterparts to coordinate their claims. This article reviews the current state of class certification decisions in Canada across a variety of types of claims, as well as cross-border issues of interest to U.S. and multinational companies that do business in Canada, including the permissible scope of cross-border discovery, the enforceability of U.S. class settlements against class members that reside in Canada, and cost awards in Canadian class proceedings. Overview of Class Actions in Canada Class actions are permitted in all Canadian provinces,1 with most having specific class action legislation.2 While each common law jurisdiction has slightly different criteria, in general an action can be certified as a class action if: (1) the claim asserts a sustainable cause of action, which will be assessed on the pleadings alone; (2) there are two or more persons in the proposed class; (3) the claims of those persons have substantial issues of fact or law in common; (4) it is preferable to resolve the common issues in a class action having regard to the objectives of class proceedings - increased access to justice, judicial economy and behaviour modification; and (5) the proposed representative plaintiff can adequately represent the interests of the class. In Quebec, the threshold is lower than in the other Canadian provinces. Quebec actions will be allowed to proceed as a class action if: (1) the recourses of the members raise identical, similar, or related questions of law or fact; (2) the facts alleged seem to justify the conclusions sought; (3) the composition of the group makes the application of Article 59 (representative actions) or 67 (joint actions) of the Quebec Civil Code difficult or impractical; and (4) the member of the class to whom the court intends to ascribe the status of representative is in a position to represent the other members of the class adequately.3 Moreover, recent changes to Quebec's procedural rules make it very difficult for defendants to challenge the veracity of the plaintiffs' factual submissions at the certification hearing.4 Where a class action is certified, discovery and a trial of the common issues will be held first, and then a procedure is ordered for resolution of any individual issues (such as specific causation and damages). Court approval is required for settlement of certified class proceedings. Class Certification The threshold for class certification in Canadian provinces is generally considered to be lower than in the United States, in large part because there is no predominacy requirement. Predominacy is just one of a number of factors to be considered by the courts. This article discusses some of the trends that are emerging in different substantive areas. 1. Product Liability and Toxic Torts Product liability cases have been successfully certified in a majority of the cases that have reached a class certification hearing in recent years. For example, there have been no successful oppositions to certification of medical products class actions in Ontario since 1994, when the Court refused to certify a class action involving tainted blood products.5 Not surprisingly, the frequency with which medical products class actions are being commenced across Canada is on the rise, with class actions involving Vioxx and implantable defibrillators being the most recent examples. …

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