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Carter v Ford Motor Company of Canada: an updated guide to awarding costs in Ontario class proceedings

A revised framework for costs awards

Carter v Ford Motor Company of Canada[1] is a recent costs decision by Justice Perell, which followed a certification motion in which Justice Perell struck or refused to certify 14 of the plaintiff’s 15 proposed causes of action.

In Carter, Justice Perell introduces a revised framework for costs awards in class actions which recalibrates costs rules so as to better support the underlying principles of the Class Proceedings Act, 1992, namely: (1) access to justice, (2) behavior modification, and (3) judicial economy. 

More specifically, Justice Perell outlines the following six purposes in the administration of justice, which he says Courts (and therefore litigants) should consider in relation to an award of costs in a class action proceeding: 

  1. to indemnify successful litigants for the costs of litigation, although not necessarily completely;
  2. to facilitate access to justice;
  3. to discourage frivolous claims and defences;
  4. to discourage under-inclusive or over-inclusive class membership;
  5. to discourage and sanction inappropriate behaviour by litigants in their conduct of the proceedings; and
  6. to encourage settlements.[2]

In Carter, Justice Perell is particularly concerned with discouraging under-inclusive and over-inclusive class membership, which can result in unfairness to all parties and stakeholders to the litigation.

Overreaching class actions and certification motions should be discouraged

As noted above, the plaintiff in Carter successfully certified just one of the fifteen claims it advanced in the certification motion. The plaintiff nevertheless sought indemnity for their full costs of $354,759.57.

The defendants argued that the parties should bear their own costs for the certification motion, primarily on the grounds that the plaintiff met limited success within the motion.[3]

The plaintiff, on the other hand, argued that its success within the motion was immaterial to the costs analysis, and that cost should be awarded in the determination of certification. In other words, even if only one issue is certified, the plaintiffs are entitled to their costs.[4]

After admonishing both parties for advancing arguments which “focus on a success that ignores the main policy goal of access to justice”, Justice Perell concluded that a reduced costs award was nevertheless justified in the circumstances given class counsel’s “overreach” with respect to potential class membership:

 [39]           It is always in the interests of justice for both the Defendants and for the putative Class Members that the certification criteria be tested and satisfied, and in some cases, of which the present case is an example, there may be a reduction in the indemnification for the legal expense incurred by a plaintiff where his or her Class Counsel’s litigation reach exceeds the grasp.

[40]           The reason for this reduction is not so much to award the Defendant for its tactical, strategic, or substantive success on the certification motion, although that is a factor that the court is entitled to consider, but because it is in the interests of justice not to have an over-inclusive class membership.

[41]           The reason for this reduction is also not so much to punish the Plaintiffs for an overblown and wrong in law proposal, although that too is a factor that the court is entitled to consider but because over-inclusiveness is potentially unfair to both the class members who should be included and to those who are over-included.

[42]           Over-inclusive class membership may not be in the interests of justice. Like litigation generally, very few class actions are actually tried, and the overwhelming majority are settled. If there is a settlement, it is not access to justice if the class members’ already compromised compensation and already contingency fee reduced recovery is further diluted by sharing it with the over-included class members. (In this regard, it is worth noting that unless the court intervenes, Class Counsel has no skin in this skinning.) If the settlement minimizes or excludes compensation for class members for whom the defendant has no genuine liability, then these Class Members may feel that they have been just cannon fodder in the litigation or a negotiating chip in the settlement. If the settlement adjusts for the over-included class members, then there may be conflicts of interest amongst the class membership about the fairness of the settlement. Over-inclusiveness is a potential problem.

[emphasis added]

Justice Perell ultimately awarded the plaintiff the reduced amount of $197,750.[5]


Carter does not radically alter the landscape for costs awards, but it does highlight the practical value of a costs scheme which supports rather than detracts from the underlying goals of the Class Proceedings Act, namely: (1) access to justice, (2) behavior modification, and (3) judicial economy.  

If applied correctly, the revised framework Justice Perell sets forth in Carter could lead to narrower claims being advanced at certification.  





[1] Carter v. Ford Motor Company of Canada, 2021 ONSC 5586.

[2] 2021 ONSC 5586 at para. 45.

[3] 2021 ONSC 5586 at para 33.

[4] 2021 ONSC 5586 at para 34.

[5] 2021 ONSC 5586 at para 46.



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