Changes to Ontario’s Class Action Regime: Bill 161 Receives Royal Assent

July 20, 2020

On July 8, 2020, Bill 161, the Smarter and Stronger Justice Act, 2020, received Royal Assent. As we discussed previously, Bill 161 makes a number of amendments to Ontario’s Class Proceedings Act, 1992 (CPA), including the introduction of a more rigorous certification test, improved coordination of multi-jurisdictional class actions, a mechanism to dismiss dormant proceedings, and other procedural changes.

Significant changes in Bill 161 to the Ontario class actions regime are described below. 

A More Rigorous Certification Test

The amendments include a new subsection 5(1.1) that creates a more detailed and onerous standard for satisfying the “preferable procedure” prong of the certification test:

5(1.1) A class proceeding is the preferable procedure for the resolution of common issues under clause (1)(d) only if, at a minimum,

a) it is superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant, including, as applicable, a quasi-judicial or administrative proceeding, the case management of individual claims in a civil proceeding, or any remedial scheme or program outside of a proceeding; and

b) the questions of fact or law common to the class members predominate over any questions affecting only individual class members.

As a result of this amendment, a plaintiff will now have to satisfy the court that its proposed class proceeding is the “superior method” for resolving class members’ entitlement to relief or for addressing the impugned conduct of the defendant. Meanwhile, the predominance element requires the court to assess the extent to which the resolution of the common issues actually advances the resolution of the overall action when compared to the individual issues remaining to be determined.

The addition of the superiority and predominance requirements aligns Ontario’s certification test more closely with the federal certification test in the United States and creates a more rigorous certification test in Ontario.

Coordination of Multi-Jurisdictional Proceedings

Bill 161 introduces provisions for the coordination of multi-jurisdictional class proceedings, which are defined as proceedings brought on behalf of residents of two or more Canadian provinces or territories involving the same or similar subject matter.

Where a proposed class proceeding brought on behalf of a multi-jurisdictional class is commenced outside Ontario involving the same or similar subject matter and some (or all) of the same class members as an Ontario proceeding, Bill 161 requires the court to determine whether it would be preferable for some (or all) of the claims of the Ontario class members in the Ontario proceeding to be resolved in the other jurisdiction. The legislation provides an extensive list of factors for the court to consider in making this determination, including:

  • the alleged basis of liability in each of the proceedings, and any differences in the laws of each applicable jurisdiction respecting such liability and any available relief;
  • the stage each proceeding has reached;
  • the plan required to be produced for the purpose of each proceeding, including the viability of the plan and the available capacity and resources for advancing the proceeding on behalf of the class;
  • the location of class members and representative plaintiffs in each proceeding, including the ability of a representative plaintiff to participate in a proceeding and to represent the interests of class members;
  • the location of evidence and witnesses; and
  • the ease of enforceability in each applicable jurisdiction.

The court may refuse to certify a multi-jurisdictional proceeding if it is preferable that the matter proceed in another jurisdiction. The CPA amendments also permit a party to seek a stay of an Ontario proceeding prior to certification where there is an overlapping class action in another province. These amendments bring Ontario’s legislation in line with other Canadian provinces, such as Alberta, British Columbia and Saskatchewan, where similar provisions to address multi-jurisdictional class actions have been in force for some time.

Mandatory Dismissal for Delay

In response to long-standing concerns about proceedings that are commenced and then remain dormant, Bill 161 has introduced a mandatory dismissal for delay provision.

Pursuant to the new provision, the court is required, on motion, to dismiss a class proceeding commenced in Ontario unless at least one of the following steps has been taken within one year of commencement:

  • the filing of a final and complete certification motion record by the representative plaintiff;
  • the parties have agreed in writing to a timetable for service of the representative plaintiff’s certification motion record, or for completion of one or more other steps required to advance the proceeding, and have filed the timetable with the court;
  • there is an order of the court that the proceeding not be dismissed and a timetable for service of the representative plaintiff’s certification motion record or for the completion of one or more other steps required to advance the proceeding; or
  • any other steps, occurrences or circumstances that may be specified by regulation.

Notable Procedural Changes

Bill 161 contains other significant procedural changes to the CPA, including:

 

 

Early Resolution:

The court is mandated to hear dispositive motions and motions that may narrow the issues to be determined in advance of the motion for certification (unless it orders that the motion be heard in conjunction with the certification motion).

Appeal Routes:

Either party is allowed to appeal directly to the Court of Appeal from an order certifying, refusing to certify, or decertifying a proceeding as a class proceeding. This reform eliminates the prior asymmetry where plaintiffs had an automatic right of appeal while defendants were required to seek leave, as well as eliminating the jurisdiction of the Divisional Court as an intermediate appellate court in class actions.

Carriage Motions:

Where multiple counsel file similar claims in Ontario courts, a motion to determine which counsel has “carriage” of the case must be brought within 60 days of the commencement of the first action, with the decision of the court being final and not subject to appeal. Similar claims that are commenced more than 60 days after the first action has been commenced will be barred. Class counsel may not seek to recover the costs of the carriage motion from either the class or the defendants.

Third-Party Funding:

Third party arrangements will be allowed, subject to court approval (and unenforceable in the absence of such approval). Motions for approval, on notice to defendants, must be made as soon as practicably possible after the agreement is entered into and a copy of the agreement must be provided to the defendants. Information that may be reasonably considered to confer a tactical advantage on the defendant may be redacted, although the motion judge must receive a complete and unredacted third-party agreement, which shall not form part of the court file.

Costs of Certification Notice:

Costs of a notice of certification may be awarded to a representative plaintiff only upon success in the class proceeding, except to the extent the defendant consents to their payment in whole or in part at an earlier time.

 Settlement Approval:  The party seeking approval must make full disclosure of all material facts and file an affidavit detailing the method used for valuing the settlement, the plan for allocating and distributing settlement funds and evidence as to how the settlement is fair and in the best interests of the class (among other things).

Application of the CPA Amendments

The CPA amendments contained in Bill 161 will come into force and effect on a date to be determined by proclamation of the Lieutenant Governor.

Pursuant to the transition provisions, the amendments will apply only to proceedings commenced after the amendments come into force, with the exception of the dismissal for delay provisions, which will apply to existing proceedings, but only from the day that the amendments come into force.

DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at www.stikeman.com/legal-notice.

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