Law Commission of Ontario issues recommendations for class action reform in Ontario
On July 17, 2019, the Law Commission of Ontario (“LCO”) published its Final Report on Class Action reform, Class Actions: Objectives, Experiences and Reforms (the “Report”). The Report is the culmination of the LCO’s two-year class action project, which included consideration of submissions from 32 interested stakeholders. The Report makes 47 recommendations for amendments to Ontario’s Class Proceedings Act, 1992 (the “Act”), some of which the LCO itself describes as “controversial”. They include recommendations for significant reforms regarding managing class actions, carriage disputes, multijurisdictional issues, certification, settlement approvals, settlement distribution, fee approval, costs, behavior modification and appeals. The full text of the LCO’s report and recommendations can be found here. Some key recommendations are highlighted in this blog post.
Perhaps the most significant recommendation in the Report, and the one that represents the greatest departure from current practice (and will likely spur significant discussion), is the LCO’s recommendation to adopt a limited no-costs regime to provide for no-costs for certification and ancillary motions. Currently, the successful party on certification can seek its costs, and large costs awards have been made in some cases. The Report favours maintaining two-way costs on all other aspects of the action, including summary judgment motions, disputes about jurisdiction, de-certification motions, and trial. A number of recommendations are also made regarding third-party funding, including the right for successful defendants to seek costs directly from third-party funders.
The LCO recommends that courts interpret the existing elements of s. 5(1)(d) (“preferable procedure”) of the certification test more rigorously. In particular, it recommends that courts give significant weight to alternative options under the preferable procedure analysis. It also recommends that courts support and endorse pre-certification summary judgment motions or motions to strike if such motions will dispose of the action or narrow the issues to be determined or evidence to be filed at certification.
The LCO recommends the implementation mandatory class actions outcome reports that include information about behaviour modification outcomes following a class action, including changes in corporate or government practices and behaviour that may be attributable to a class action. The LCO roots this recommendation in the public policy objective of allowing litigators, clients, courts, policy-makers and the public to systematically assess the success (or not) of class action as a vehicle for corporate/institutional deterrence and behaviour modification.
The LCO recommends a that the Class Action Bench-Bar Liaison Committee continue to develop a dedicated Practice Direction to be complied with by class counsel to improve the management of class actions, and to improve efficiency and timeliness of certification motions. The LCO recommends that a failure to comply with the Direction result in potential judicial sanction.
Multijurisdictional Class Actions
The LCO recommends that the Act be amended to add provisions relating to multijurisdictional class actions consistent with legislation in Alberta, British Columbia and Saskatchewan, and to ensure consistency with International Bar Association’s “Guidelines for Recognizing and Enforcing Foreign Judgements for Collective Redress”, in order to streamline multijurisdictional class actions.
To achieve consistency among provinces, the LCO encourages Federal, Provincial and territorial Ministers of Justice to work together to develop a national protocol or set of rules for the recognition of provincial certification decisions and multijurisdictional classes, and recommends consistent training for judges across Canada regarding the management of multijurisdictional class actions. It also supports the recent adoption of the CBA Protocol on Multijurisdictional Actions as a Practice Direction in Ontario.
The LCO recommends that the process for appeals from certification motions be streamlined by providing both parties with a right of appeal to the Ontario Court of Appeal from certification orders. Currently, defendants do not have an automatic right of appeal if certification is granted. The LCO remarked that interested stakeholders were largely in favour of streamlining the appeals process.
Implications and next steps
Class actions judges, class counsel and interested stakeholders will be reacting and discussing these recommendations in the coming months, as they are considered by the Attorney General for Ontario. While it will likely be some time before we see which of these recommendations will be adopted by the legislature, we expect that recommendations made to courts will be cited by counsel in upcoming appearances, including the recommendation that a rigorous approach be taken to preferable procedure element of the certification criteria.
For more information about the LCO’s Final Report, and the practical implications that its recommendations may have on class action practice, please contact a member of our Class Actions team.