Webinar Recap - Looking Ahead to 2021: Risk Management and Common Law Class Action Trends in 2021

Window on 2021

We expect fewer class actions in Ontario due to amendments to the Class Proceedings Act which, while beneficial to defendants on some procedural matters, may be particularly transformative in raising the bar for plaintiffs seeking to certify a class. More class actions will likely be filed in Western Canada and Quebec as a result. It follows however that a class action commenced in Ontario will suggest that the plaintiff is prepared to invest in front-loading their case.

In 2021, we also expect third party class action funding to keep growing. Private equity funds sitting on dry powder are increasingly willing to invest in litigation following recent clarifying court guidance on such funding.

Types of Class Actions

Consumer and breach of contract

Over the past several months, we have acted opposite a growing number of entrepreneurial plaintiffs’ counsel proactively bringing class actions based on cancellations and inability to fully perform, most significantly in the events, travel, education, fitness and industries. This trend is not unique to Canada but has also been seen abroad, in particular the US and the UK.

Employment class actions

Emerging trends include:

  • Misclassification of employment status, an increasing issue in the gig economy;

  • Overtime pay and in particular allegations of “time theft” due to unsupervised work from home;

  • Workplace safety; and

Privacy, data, and cybersecurity

Emerging trends include:

  • Breach of privacy rights, whether legislative or tortious (in Ontario for example, the tort of inclusion upon seclusion);

  • Unlawful monetization of data (selling of contact information);

  • Hacker risk;

  • New securities/ privacy cases, which allege that companies misrepresented security guarantees to technology users; and

  • Cases against parties who rely on data security from third parties.

Securities Class Actions

Emerging trends include:

  • ESG class actions

  • Market disclosure and performance against current forecasts; and

  • Disclosure against COVID plans.

Class actions against provincial and municipal government

We expect to see a number of cases challenging lockdowns or for unlawfully shutting down a particular type of business. In the United States, the Supreme Court recently overturned New York State COVID restrictions at houses of worship. 2021 could similarly see businesses or religious groups band together to challenge governments and assert that their freedoms have unlawfully been abridged.

Mitigation

Consumer and breach of contract

Prospective defendants should consider:

  • Whether reasonable arbitration requirements should be imposed;

  • Inserting class action waivers into contracts;

  • Adding releases for claims grounded in expiring contracts when renewing them; and

  • Adding language allowing consumers to seek independent legal advice.

With Canadian courts still facing a COVID-induced backlog, businesses are increasingly choosing arbitration, a trend we expect is here to stay.

Employment

With requirements changing rapidly, employers should regularly review their workspace to ensure it meets the dynamic safety requirements set by local governments. Employers should also consider engaging outside safety experts to review their work safety plan. Though operationally difficult, especially for national businesses, compliance will help ensure that their business is protected from liability and that their employees are safe.

Privacy, data, and cybersecurity

Organisations should consider making enhancements to their processes, systems, and software. This is a rapidly evolving field; seek out expert advice to ensure adequacy on these three fronts.

As importantly, businesses will have to ensure that proper consent has been obtained. For example, data sharing requires a robust sign-in process to prevent an event (breach, hack or other unauthorized access) and to limit liability in such an event.

Finally, businesses must ensure that disclosure is consistent with operational capabilities.

Securities Class Actions

Through 2021, it will remain of utmost importance for businesses to review their disclosure obligations, including continuous disclosure. A persisting but ever changing pandemic will require that disclosure adapt to changing circumstances. Specifically, consider what assumptions being made about the recovery in your disclosure documents. Such assumptions need to be dynamic to guard against accusations that they are misrepresentative.

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