Difficulties for defendants responding to substantially identical proposed class actions

Britton v. Ford Motor Company of Canada, 2021 ABQB 17 demonstrates that substantially similar class actions in different Canadian jurisdictions can pose headaches for defendants because Canada lacks a national structure for managing them. The case also demonstrates the sometimes slower pace of litigation in Canada (on average) relative to other jurisdictions, particularly the United States.

The case related to alleged engine defects. In 2012, the Merchant Law Group (MLG) filed a proposed national class action in Saskatchewan; Kevin Whittal was the proposed representative plaintiff. There was little activity in the Saskatchewan action and by 2020 no certification hearing had been scheduled.

Mr. Britton—also represented by MLG—filed a substantially identical action in Alberta in 2019 because of the delays in the Saskatchewan action. The defendants applied to stay the Alberta action as an abuse of process because the actions were substantially identical and managed by the same plaintiff firm—Mr. Whittal and Mr. Britton were even cooperating on some issues.

However, with reference to precedents from across Canada, the court held that competing proposed national class actions are not inherently or presumptively abusive. As the court noted, there is no Canadian national class action coordination procedure comparable to multidistrict litigation in the United States. Therefore, overlapping and competing actions are common and managing even substantially identical actions is difficult.

Defendants applying to stay one of several competing proposed class actions also bear the onus of proving that it serves no legitimate purpose. In this case the defendants failed in their attempt to reverse that onus.

MLG nevertheless tried to justify the action because (i) of the delays in Saskatchewan and (ii) it would preserve limitation periods in Alberta. The court held that the first justification was unsatisfactory because similar actions by effectively the same party should be discouraged—MLG had significant influence over the progress of the Saskatchewan action and the plaintiffs were cooperative.

On limitation periods, the court held that “sometimes commencing an action later is better than never” (para. 29), even if the Alberta action was filed many years after the vehicles were made and Mr. Britton apparently learned of the alleged defect.

Ultimately, the court preferred to deal with limitation periods at certification and therefore refused the stay. Alberta’s Class Proceedings Act requires the court to consider whether it would preferable for the proposed common issues to be resolved in a competing class action when resolving a certification application. The court directed the parties to address the limitation period issues and the impact of potential coordination between Alberta and Saskatchewan in that context. The court concluded by forewarning MLG that it would ask for a substantive proposal to address the parallel actions at certification.  

 

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