Third time’s the most inefficient: Another call for national class actions reform in McKay v. Air Canada, 2016 BCSC 1671
McKay is one of three potential class actions brought in B.C., Ontario, and Quebec respectively, arising from cargo fees charged by certain airlines. Counsel for the proposed class representative in each action worked co-operatively and focused on the Ontario action, which was certified in Airia Brands v. Air Canada, 2015 ONSC 5352. The Ontario Superior Court subsequently approved a distribution protocol respecting settlement funds. Counsel for the proposed class representative in McKay then sought the B.C. Supreme Court’s approval of a similar distribution order.
The application was heard by Chief Justice Hinkson, who began his reasons for judgment with a review of Canada’s national class actions regime—or lack thereof. Chief Justice Hinkson found that the existence of three parallel actions in B.C., Ontario, and Quebec merely duplicated each other, occupied the time of three courts, and created additional expenses for parties forced to litigate in different provinces.
However, Hinkson C.J. found that despite the absence of national class action legislation, courts in various provinces had permitted the pursuit of what are effectively national class actions, and had also deferred to class proceedings in other provinces. Hinkson C.J. held that deference should be encouraged, as it would prove more efficient than parallel proceedings.
Yet the problem of multiplicitous class actions remains. For example, In McKay, all of the members of the proposed but uncertified B.C. class, were also members of the Ontario class in Airia Brands. With reference to Kowalyshyn v. Valeant Pharmaceuticals International, Inc., 2016 ONSC 3819, Hinkson C.J. identified at least six problems, in the context of class proceedings, in attempting to avoid a multiplicity of proceedings:
- the right of a putative class member to opt-out of the class proceeding;
- the influence and importance of class size and class member loyalty;
- law firms prospecting for a quick profit from class action work, which start multiple class actions or redundant class actions in order to get a piece of the class-action-action;
- what Perell J. [who decided Kowalyshyn] described as the double dealing of defendants;
- the absence in Canada, which is a confederation of provinces, of any mechanism as exists in the United States, which is a union of states, to consolidate proceedings that are initiated in several different jurisdictions; and
- the rarity of purely local class actions and the prevalence of parallel regional, national, or global class actions that are difficult to cull.
Turning to the merits of the application—and perhaps to make the point that McKay was an unnecessary duplication of Airia Brands in Ontario—Hinkson C.J. simply quoted the portions of the Ontario judgment approving the settlement distribution that he considered germane to the application in McKay. Chief Justice Hinkson also held that there was no need for the B.C. Supreme Court to oversee the distribution process because the Ontario Superior Court would do so and because allowing it to do so would be a more efficient use of judicial resources.
One solution to at least partially reduce the impact of parallel class proceedings may be to have judges from different provinces hear applications like the one at issue in McKay concurrently. That approach was approved in Endean v. Canadian Red Cross, 2013 BCSC 1074, where the Court held that it was appropriate to hear an application in a parallel class action at a location outside B.C. alongside supervisory judges from the parallel actions in other provinces. However, the Court of Appeal reversed that decision (2014 BCCA 61) and held that a B.C. judge cannot conduct a hearing outside B.C., but could preside over a hearing that took place in B.C. via telephone or video conference. Conversely, the Ontario Court of Appeal held that an Ontario judge could conduct a hearing outside Ontario (Parsons v. Ontario, 2015 ONCA 158).
The Supreme Court of Canada heard appeals from Endean and Parsons on May 19, 2016. The Court may use the cases to address the issue of parallel class proceedings. However, unless and until the Court or the provincial legislatures engage in much-needed reform, class action counsel and litigants will continue to incur the cost of the inefficiencies identified by Hinkson C.J. and others.
cargo fees distribution protocol multiplicitous national class actions regime parallel proceedings provincial legislatures