Looking Forward: Class Actions in 2021
Written by Katrina Crocker, Cheryl Woodin and Ranjan Agarwal
For the first time in 25 years, substantive amendments have been made to Ontario's Class Proceedings Act, 1992 (CPA). These changes apply to any class action started on or after October 1, 2020.
While the new amendments to the CPA aim to improve procedural efficiency and streamline the class action process, the major change is the introduction of a stricter certification test for class actions in Ontario. Previously, certification under the CPA required showing that a class action be the preferable procedure to resolve the common issues between members of the class. The amended CPA now requires that the proposed class action be a superior way to determine the rights or entitlement of class members, and that questions of fact or law common to the class members predominate over the individual issues.
These new requirements are similar to the requirements for certification of class actions in the United States. If interpreted as courts in the United States have, it will impact the type of cases certified as class actions in Ontario—particularly those which involve many individual issues, such as product liability and personal injury cases. As a result, other provinces like British Columbia may become increasingly attractive for plaintiffs and Class Counsel. British Columbia has already been an attractive forum for class action plaintiffs because of its facilitation of national classes and its no-costs regime, two features now joined by the lack of a predominance requirement.
For those class actions that do continue in Ontario, parties are likely to see more pre-certification challenges. Courts must now hear any dispositive motions—those seeking to put an end to legal proceedings altogether or to narrow the issues to be determined—prior to or simultaneously with a certification motion. This overhauls the traditional practice of hearing certification motions first, and will allow for summary judgment motions and strike motions, to take place earlier in the certification process. Parties will also have the right to bring a stay motion prior to certification where there is an overlapping class action in another province.
The new legislation brings much needed clarity to the rules surrounding the suspension of limitation periods. Besides the existing instances under the CPA where the limitation period of a cause of action asserted in a class proceeding resumes, the amendment adds that the limitation period will also resume where: (a) the court refuses to certify the proceeding as a class proceeding; (b) the court makes an order that the cause of action shall not be asserted in the proceeding; or (c) the court makes an order that has the effect of excluding the member from the proceeding. Thus, where a class action is not certified, plaintiffs will need to begin their individual actions in quick-fashion or else risk that the limitation period will expire, thereby barring their claim.
This provision of the legislation was prompted by a key decision of the Ontario Court of Appeal in RG v The Hospital for Sick Children. Ms. Green was representative plaintiff in a putative class action against SickKids for negligently operating the Motherisk Drug Testing Laboratory and delivering false positive results. After certification was denied and her appeals dismissed, the plaintiff moved for an order to continue the suspension of the putative class members’ limitation periods, to continue the proceeding as a multi-plaintiff action under section 7 of the CPA, and for leave to join 200 other claimants to her claim.
The motion judge held that if a motion to certify a class proceeding is dismissed and the limitation period does not resume running under section 28(1) of the CPA, as occurred here, the suspension of the limitation periods remains in effect until the defendant brings a motion.
SickKids appealed the motion judge's interpretation of section 28. The Ontario Court of Appeal dismissed the appeal. It found that section 28(1) sets out an exhaustive list of circumstances governing limitation periods in class proceedings. As the denial of certification was not specifically listed as one of those circumstances, the limitation period was still suspended. The Court accepted this result was not ideal, but that judicial interpretation could not overcome clear legislative language. SickKids has sought leave to appeal the Court of Appeal's decision to the Supreme Court of Canada.
Between the disposition of the appeal (June 2020) and the filing of the leave to appeal application (November 2020), the various amendments to the CPA came into force, which added the refusal to certify a class claim as an instance in which a limitation period will resume. While generally not applying to proceedings commenced before October 1, 2020, it will be interesting to see whether the Supreme Court exercises the court'’ plenary jurisdiction under section 12 of the CPA to manage class proceedings and apply the new provision in the case. In any instance, the amendments to section 28 of the CPA will render cases such as this one a thing of the past, as it is now clear that the dismissal of a certification motion will cause limitation periods to resume.
In addition, parties may expect to see an increased pace in the prosecution of Ontario class actions. Any proposed class action will now be automatically dismissed for delay unless, within one year from issuing the claim, the plaintiff has filed a “final and complete” motion record for certification. Dismissal can be avoided only if the parties agree upon a timetable or one is established by the court. Notably, this provision also applies to actions already existing prior to October 1, 2020.
Finally, on appeals from a certification order, plaintiffs can no longer materially amend their notice of motion, pleadings or notice of application, without leave of the court, and can only do so in exceptional or unforeseen circumstances. This will place pressure on plaintiffs to ensure that they deliver complete and comprehensive pleadings at the earliest stages of the class action process.
While these amendments are welcome news for companies with class action exposure, judicial interpretation will help determine their impact in the years to come. In the short term, class actions will be subject to heightened scrutiny as the amendments take effect, and the Ontario courts seek to interpret and apply them. Going forward, we expect to see strategic forum selections being made for newly proposed class actions, more pre-certification motions for those class proceedings that are started in Ontario, and a moderately quicker pace to the certification process in Ontario as a whole.