Ontario’s amended class action legislation raises the bar on certification

After much consultation by the government, review and redrafting, changes to Ontario’s Class Proceedings Act came into effect on Oct. 1 as part of the province’s Bill 161. The amendments raised the bar on certification and created a predominance requirement to certify a class.

What its effects will be on the number of filings for certification in Ontario remains to be seen, but the changes are noteworthy.

”Everybody has a view on [the new legislation’s] effects,” says Craig Lockwood, a litigation partner in Osler, Hoskin & Harcourt LLP in Toronto, but they “agree it raises the bar for certification.”

These were the first major amendments to Ontario’s Act since the class action legislation was adopted in 1992, and “they are truly significant,” says Matthew Fleming, a partner in the Litigation and Dispute Resolution group of Dentons Canada LLP in Toronto.

“They have raised the bar for plaintiffs at the certification stage, [and] have encouraged preliminary motions which dispose of all or part of the claim at an early stage of the proceedings,” he says. The amendments also promote the early resolution of potential jurisdictional issues and imposed tighter timelines to provide for the dismissal for delay of claims that do not proceed in a timely fashion.

Other amendments affect matters such as carriage motions and competing plaintiffs bringing claims in respect to wrongdoing. “This method codified the test and the procedure to be followed for dealing with that scenario,” says Fleming, ”and also levelled the playing field on appeal rights and addressed third-party funding agreements” where third parties are assisting with the funding of the class action.”

Another issue, Lockwood says, is the predominance requirement to certify a class action. The amendments the Class Proceedings Act require that common issues predominate over individual ones, which many are speculating will raise the bar for certification and that plaintiffs will be loath to bring actions in Ontario and may shift to other jurisdictions.

“I don’t know that that’s necessarily the case,” Lockwood says, “but at this stage, very rarely do you see a class action in Canada that’s not national,” meaning that counsel from different firms in various provinces are coordinating and liaising with each other, with multiple actions started in multiple provinces.

“So, I feel the amendments to the Ontario Act may not be as big as people think.”

Any class action filed before Oct. 1 was done so under “the old regime,” he notes, and in the runup, “we did see a number of class actions newly filed” in Ontario.

Fleming summarizes the key amendments of the Act as:

• Encouraging early resolution;
• Promoting early resolution of potential jurisdictional issues;
• Codifying factors in the jurisprudence respecting the award of carriage of a class action to one of the competing class counsel. If there is an existing proceeding under the Act, a competing proceeding may not be issued without leave of the court if more than 60 days have passed since the issuance of the initial claim;
• A more stringent test for certification, introducing the predominance and superiority tests to the preferable procedure aspect of the test;
• Required court approval of third-party funding agreements, on motion on notice to the defendant;
• Mandatory dismissal for delay of any actions that do not meet certain requirements; this addresses so-called “zombie” class actions that have been filed but not advanced by class counsel.