Written by Ilan Ishai, Ashley Paterson and Charlotte Harman
On July 17, 2019, the Law Commission of Ontario released the final report of its class action investigative project, Class Actions: Objectives, Experiences and Reforms. The project is the most comprehensive research, consultation and analysis of class actions ever undertaken in Canada. The report is the first independent assessment of Ontario’s Class Proceedings Act since it was enacted 27 years ago, and could change the way class action litigants approach issues such as certification, settlement and costs.
The project’s mandate was to research class actions in Ontario to form an independent, evidence-based and practical analysis of class actions from the perspective of their three core objectives: access to justice, judicial economy and behaviour modification. The result is a list of 47 recommendations which call for statutory amendments, provide judicial guidance and propose the development of new practice directions for specific areas. These recommendations will be presented to the Ontario government for consideration and possible implementation.
Overall, the recommendations aim to streamline and expedite the class action process, make it more equitable to plaintiffs and defendants, and eliminate unnecessary delays.
While the actual impact of the report remains uncertain, companies facing class action exposure should nevertheless be attuned to its potential to affect the experience of litigating class actions in Canada going forward.
The Law Commission’s extensive list of recommendations address a full spectrum of issues within the class action process, including commencing class actions, certification, settlement approval and distribution, counsel fees, costs and reporting on class actions, including:
- improving case management of class actions through:
- a one-year deadline within which the certification motion is to be scheduled and plaintiffs’ motion material filed; and
- automatic dismissal and costs provision for cases not advanced by plaintiffs in a timely manner.
- refining the approach to preferable procedure at certification to consider:
- interprovincial harmonization of multi-jurisdictional actions; and
- giving greater weight to alternative remedies.
- encouraging courts to support and endorse pre-certification summary judgment motions or motions to strike where they will dispose of the action or narrow the issues to be determined;
- expanding class counsel fee approval criteria to be considered by courts;
- requiring affidavit evidence to support the settlement approval criteria, the risks of litigation, the range of possible recoveries, and the method of valuation of the settlement;
- an increased role for amicus curiae to evaluate fees and settlements;
- building out settlement distribution obligations to include: adding plain language requirements and requiring the court to order the best notice reasonably practicable; adding provisions governing claims administrators; adding provisions governing cy près distributions;
- major new reporting requirements for parties seeking approval of class actions, including mandatory “outcome reports” that contain detailed information on take up rates, compensation for class members, legal and transaction costs;
- introducing a modified no-costs regime for certification and ancillary motions under which no costs would be available to either party for the certification motion and related procedural steps; and
- a more streamlined appeal process dispensing with defendants’ obligation to seek leave to appeal to the Divisional Court (an intermediate Ontario appeal court), so both parties will be provided an automatic right of appeal to the Ontario Court of Appeal from certification orders.
In the short term, the report may cause increased judicial scrutiny and more rigorous case management in individual cases. In the long term, reforms flowing from the report may create higher expectations and responsibilities for litigants and their counsel.
Bennett Jones offers clients some of Canada’s most experienced and active class action defence lawyers. Clients with questions on how this report may affect their exposure to class action litigation may contact a member of the Bennett Jones Class Action Practice Group for further information.