Ontario’s Attorney General proposes significant changes to the Class Proceedings Act
Ontario’s Attorney General has proposed significant changes to the Class Proceedings Act, 1992 (the “CPA”). The CPA had been the subject of a recent review by the Law Commission of Ontario, which issued a report in July recommending modest changes. Few of the changes recommended by the Law Commission found their way into the proposed legislation, which instead advances a slate of reforms propounded by defence interests.
For the time being, the rules of the game are unchanged. If some or all of the proposed changes to the CPA are adopted, they will affect class actions commenced after the amendments enter into force, likely in the first half of 2020 (s. 39).
The following are the ten most significant proposed changes:
- A stricter certification test: The Attorney General has proposed a US-style predominance requirement (s. 5(1.1)(b)). The proposed amendment tracks the language in some Western Canadian class action statutes, but it makes predominance mandatory, rather than a matter for consideration. Certification will only be granted if “the questions of fact or law common to the class members predominate over any questions affecting only individual class members”. It appears that the goal is to bar class actions that are difficult to adjudicate because they raise significant individual issues. Products liability and institutional abuse claims may be more difficult to certify on this tighter test for certification.
- Limiting multi-jurisdiction cases: Ontario Courts will be required to decide whether Ontario is really the preferable forum in which to resolve the claims of some or all members of the proposed class, if there are competing cases in other provinces. The CPA would adopt the Uniform Law Conference of Canada’s test for assuming carriage of multi-jurisdictional class proceedings (s. 5(6)). Further, an Ontario Court would (in contrast to Western provinces), be permitted to determine jurisdiction prior to the motion for certification (s. 5(8)), which will avoid a needless expenditure of resources where Ontario is not the appropriate forum. In order to facilitate this process, it will be mandatory for Ontario Plaintiffs to register class actions (s. 2(1.1)), and to serve an Ontario notice of certification on counsel advancing parallel proceedings in other provinces (s. 2(3)).
- Early dismissal motions encouraged: Motions by Defendants to narrow or dispose of the proceeding will presumptively be determined prior to the motion for certification (s. 4.1). This amendment would overturn the jurisprudence that delayed dispositive motions until they could be heard in tandem with certification motions (to avoid multiple rounds of appeal). The new emphasis on early motions will allow defendants to challenge proceedings on their merits before plaintiffs obtain the leverage of a certified action.
- An enhanced right of appeal for Defendants: Defendants and plaintiffs will have the same direct right of appeal from a certification decision to the Court of Appeal for Ontario (s. 30(1)). Moreover, the plaintiff will be barred from making material amendments to the proposed class action on appeal (s. 30(2)). These changes address widespread dissatisfaction with the asymmetrical appeal rights in the CPA (a direct right of appeal for an unsuccessful plaintiff, while an unsuccessful defendant must seek leave to appeal), as well as the delay that results from an intermediate appeal to the Divisional Court. Additionally, defendants will no longer face the frustration of an evolving claim on appeal, which undermined the value of the decision at first instance, especially when defendants were successful.
- Enhanced consideration of alternative procedures: Courts will now be directed to consider whether a variety of alternative proceedings, including administrative and regulatory proceedings, might better determine the entitlement of class members to relief, or address the defendant’s conduct (s. 5(1.1)(a)). The proposed amendment overturns the jurisprudence that had rendered it difficult for defendants to argue that another proceeding had already addressed or could adequately address the substance of class members’ claims, and was therefore preferable to a class action.
- Streamlined carriage motions: Competing class counsel will now have carriage decided faster and in a more predictable manner. Carriage should be decided within 60 days of the commencement of the first action, and on a set of defined criteria (s. 13.1). Moreover, no appeals will be allowed (s. 13.1(5)). The new carriage motion regime will likely be welcomed by class counsel, as well as by defendants who wish to know who will actually be in charge of the Ontario litigation.
- More rapid dismissal for delay: If a plaintiff does not file a certification record or a timetable to proceed within one year of commencing the action, it will be dismissed for delay (s. 29.1(1)). The plaintiff would then be responsible for giving notice to the class (s. 29.1(2)). This change reflects a recommendation by the Law Commission to respond more effectively to plaintiffs who do not seek certification expeditiously.
- Clarity on the resumption of limitation periods: If a certification motion is dismissed, the limitation period will begin to run for all proposed class members (s. 28(1)(a)), and the limitation period on a defendant’s claims for contribution and indemnity from third parties will be suspended upon commencement of a putative class proceeding (s. 28(3)). There had been a lack of clarity on these important points under the current legislation.
- More balanced allocation and recovery of costs: The Class will only recover the costs of giving notice of certification, if their claims actually succeed, whether on the merits or in a settlement (s. 22(1.1)). Further, if a plaintiff receives support from a third party funder, it will be mandatory to disclose the fee sharing arrangement in the notice of certification (s. 16(5)(e)); third party funding agreements will be subject to prescribed criteria for court approval, on notice to the defendant (s. 33.1(6)); the defendant will have a direct right of action against the funder for costs (s. 33.1(8)); and the defendant can seek security for costs from a third party funder not ordinarily resident in Ontario (s. 33.1(12)). These changes will enhance transparency so that class members can make an informed decision as to whether to opt out of the class proceeding, courts can protect the class in its dealings with third party funders, and defendants can collect on cost awards.
- Fuller disclosure for settlement approval: On settlement approval, class counsel will be required to make “full and frank disclosure” of prescribed factors intended to assist the court in assessing the fairness of the proposed settlement (s. 27.1(7)). This codifies the recent trend in the jurisprudence toward requiring greater empirical support for proposed settlements. After settlement, the administrator must file a comprehensive report on the performance of the settlement (s. 27(16)), and the court may hold back class counsel’s fees until it is “satisfied with the distribution of the monetary award or settlement funds” (s. 32(6)).