Class Proceedings Changes Proclaimed in Ontario

As of Oct. 1, 2020, significant changes to the Class Proceedings Act, 1992 come into effect in Ontario. These changes were part of the legal omnibus Bill 161, which received Royal Assent on July 8, 2020.

The amendments are intended to ensure that claims proceed more quickly, with greater opportunity to dismiss certain claims at an earlier stage. It supporters claim that it provides courts a more balanced framework to determine which chases are best suited for certification.

Some of the amendments are based on the Law Commission of Ontario (LCO) report in July 2019, including recommendations on the timing of certification motions and use of administrative dismissals, settlement approvals and distributions, multi-jurisdictional class actions, fee approvals, third party funding, and appeals.

The most controversial change involves the certification test, adding additional requirements of predominance and superiority to the test. While these are perceived as potential barriers to the use of class actions by the detractors of these changes, it reflects a legislative priority to ensure that the court resources spent on these large and complex claims are “superior” to other means of resolving the dispute.

The new certification test also requires common issues to “predominate” over other questions around individual class members. This might pose a challenge for the new and growing area of privacy class actions, where the nature of the breach may be similar shared source of the cause of action, but the actual information or privacy interests at stake, and the nature of the harm, would invariably differ from person to person. This may then limit the more use of the more modest privacy torts such as intrusion upon seclusion, where a single action without other causes is unlikely to create a substantial enough case to warrant representation.

In statements to the Law Times, the LCO has indicated that these changes to the certification test by”…fundamentally restructure class action law and policy in Ontario by shifting the CPA’s longstanding certification test strongly in favour of defendants,” which could increase costs, introduce longer delays, and create greater legal uncertainty.

In a related letter, the LCO states,

…Bill 161 will effectively restrict class actions and access to justice in a broad range of important cases, including consumer matters, product and medical liability cases, and any potential class actions where there may be a combination of common and individual issues. Applied retroactively these provisions would likely have prevented important and successful class actions regarding Indian Residential Schools, environmental tragedies (such as Walkerton), tainted blood supplies (such as hepatitis C), and/or price-fixing. The provincial government should not restrict Ontarians’ access to class actions in such broad and important areas.

A significant change that benefits defendants but also reflected the inherent asymmetry in class proceedings, where a plaintiff can appeal a certification order, but a defendant must seek leave to do so. The LCO made the recommendation for this change in their report as follows,

Ontario’s appeal routes from certification orders are unique in that the Divisional Court and the Ontario Court of Appeal have divided appellate jurisdiction. No other province or the Federal Court have an intermediate court for certification appeals. Moreover, Ontario is the only common law province with asymmetrical certification appeal rights as between plaintiffs and defendants.
Two levels of appeal add time and expense without offering finality. Further, there is no principled reason to maintain asymmetry between the parties for these appeals as certification is fundamentally important to both parties. Finally, the development of case law on emerging issues in class actions is facilitated by equal access to appellate review.

The most challenging part of these amendments may not be even be in the Class Proceedings Act at all. The creation of the Crown Liability and Proceedings Act (CLPA), which repealed the Proceedings Against the Crown Act in July 2019, prohibited any cause of action in negligence from the Crown or its officers, employees or agents for any policy matters.

While policy grounds have long been a basis for denying the creation of a new duty of care, this statute goes further by defining policy matters in an expansive manner in s. 11, to include in s. 11(5) “the manner in which a program, project or other initiative is carried out” (emphasis added). This is a radical extension of the exceptions to liability against the Crown, and may insulate them from not just the creation, design or funding of a program or project, but also how a third-party or independent contractor executes one of these projects or programs.

The LCO suggests in their letter that the changes, stating that combined the “create significant barriers for Ontarians wishing to initiate class actions against their provincial government, government agencies, corporations and other institutions.”

The CLPA was examined by the Ontario Superior Court of Justice earlier this year in Leroux v. Ontario. The matter had been previously certified in 2018, for the operation and administration of a provincial social assistance program for developmentally disabled persons, brought by the father of a disabled person. It was certified on the basis of how the program was operated, and not policy matters, which could negate a a duty of care on the facts.

The process for being formally assessed, approved, and receiving government support and services was allegedly negligent in its execution, giving rise to claims of negligence, breach of fiduciary duty and breach of s. 7 of the Charter. The complaint was not about inadequate funding, but the use of services registries that acted as wait lists for services.

Parents across Ontario documented their concerns in a legislative report in 2014, which were reflected in the Annual Report by the Auditor General in the same year, and a report by the Ontario Ombudsman in 2016. However, the legislation in the CLPA claimed to have retroactive application, meaning it would theoretically cover all of these complaints, even when introduced at a later date.

At the re-hearing motion, the focus was whether it was plain and obvious that the negligence claim was statute-barred by the new CLPA. The judge found that the operational negligence claim still cleared the cause of action hurdle found in s. 5(1)(a) of the Class Proceedings Act,

[13] The plaintiff did not plead, and did not have to plead, that the defendant or its employees or third-party contractors were negligent in making or failing to make specific decisions that resulted in the listed instances of operational negligence. The plaintiff didn’t have to plead this because when the action was commenced, and again when it was certified, the CLPA had not yet been enacted and the s. 11(4) “decision” requirement in the context of an operational negligence claim did not exist.

…

[15] In other words, given the “decision” requirement in s. 11(4), it is possible that the CLPA may not even apply on the facts herein. Or, the defendant may still plead that the alleged instances of operational negligence were in fact the result of specific decisions (or of failures to make a decision) by certain individuals.[12] At this stage of the proceeding, however, it cannot be said that the operational negligence claim does not disclose a cause of action under s. 5(1)(a) of the CPA.

[16] In my view, it is not plain and obvious that the operational negligence claim is doomed to fail – even in the face of ss. 11(4) and (5) of the CLPA.

However, the re-certification hearing also had another twist. The Canadian Civil Liberties Association (CCLA) obtained intervener status, arguing that the CLPA violated the Constitution Act, 1867.

The re-hearing motion judge similarly concluded that it was not plain and obvious that this argument would not succeed, and also noted,

[20] The s. 96 argument, as advanced by the plaintiff and developed in more detail by the intervener, focuses on the “core jurisdiction” analysis to be sure, but adds an important refinement that, in my view, was not satisfactorily rebutted by the defendant. The refinement is based on the three-part proposition, reaffirmed by the decision of the Supreme Court of Canada in Trial Lawyers, that (i) s. 96 constitutionally protects the core jurisdiction of superior courts; (ii) this core jurisdiction includes access to these courts; and (iii) provincial legislation that denies access to these courts may constitute an impermissible infringement on that core jurisdiction.

…

[23] The Supreme Court has specifically addressed both of these points. In the Just decision, the Court noted that in modern times “complete governmental immunity” has become “intolerable”. In Imperial Tobacco, the Court emphasized again that “exempting all government actions from liability would result in intolerable outcomes”. More to the point, the Court cautioned in Just that “complete Crown immunity should not be restored by having every government decision designated as one of policy”.

[24] In my view, for purposes of constitutional argument, it is certainly possible to link (i) what the Court has said about the importance of the “access to the courts” component of s. 96 with (ii) what the Court has said about complete governmental immunity being intolerable and that it should not be restored by defining every government decision to be a policy matter. This linkage is at least constitutionally arguable and, if it succeeds, may lead to a “reading down” or some other appropriate measure.

If this matter is read in such a way that CLPA is read down, it is possible that portions of the new Class Proceedings Act could fall with it. And just like that, significant reforms to decades of class proceedings jurisprudence could just be reversed by the courts.