For The Defense, February 2012 - DRI Today
For The Defense, February 2012 - DRI Today
For The Defense, February 2012 - DRI Today
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Think Globally<br />
Developments in the Class Action Landscape<br />
<strong>For</strong>um Shopping North of the Border<br />
By Lisa D. Parliament and Myriam Seers<br />
Until relatively recently, Canada may have been considered<br />
an “afterthought” jurisdiction for the class actions<br />
bar—a jurisdiction where plaintiffs filed class actions<br />
only as a “follow- on” to or “copycat” of related U.S. proceedings.<br />
Recently, however, the landscape has changed.<br />
<strong>The</strong> plaintiffs’ class action bar is aggressive, experienced<br />
and entrepreneurial. Canadian class action lawsuits<br />
have dramatically expanded in number and scope. Perhaps<br />
more significantly, plaintiffs’ attorneys increasingly<br />
file proposed class and proceed to certification in Canada<br />
ahead of parallel proceedings in other jurisdictions.<br />
Canada’s attractiveness as a class action destination<br />
appears to be growing. It is easy to identify possible reasons<br />
for the change. <strong>The</strong>se include the broad availability<br />
of class proceedings, the relative ease of achieving certification,<br />
the courts’ receptiveness to novel or untested<br />
causes of action, the possibility of broad national and<br />
even international classes, potential third-party funding<br />
to counteract adverse costs awards suffered by plaintiffs,<br />
and legislatively expanded rights of civil action, all<br />
discussed below.<br />
Class proceedings are available in each Canadian<br />
jurisdiction with leave of the court. Any legal person<br />
can commence a proposed class proceeding as long as<br />
the person can satisfy the criteria for certification. <strong>The</strong><br />
threshold for certification is relatively low, and the criteria<br />
for certification are largely the same in all Canadian<br />
jurisdictions except Quebec: (1) the claim must disclose<br />
a cause of action, (2) there must be an identifiable class<br />
of two or more persons, (3) the claims of class members<br />
must raise common issues, (4) a class action must be the<br />
preferable procedure for resolution of those common<br />
issues, and (5) the proposed representative plaintiff must<br />
be capable of adequately representing the class. Quebec<br />
does not have a formal “preferability” requirement.<br />
In key jurisdictions such as Ontario, a plaintiff does<br />
not have to show that common issues predominate.<br />
Instead, the test for certification requires the plaintiff to<br />
show that a case has common issues that would advance<br />
the litigation in a meaningful way.<br />
Canadian courts typically hesitate to strike novel<br />
causes of action before trials. As a result, several Canadian<br />
courts have certified class actions raising novel<br />
or “emerging” causes of action or claims even though<br />
whether such claims even exist under Canadian law remains<br />
debatable. <strong>For</strong> example, Canadian courts now almost<br />
routinely certify “waiver of tort” claims in product<br />
liability cases even though Canadian law has never recognized<br />
waiver of tort in this context. Serhan Estate v. Johnson<br />
& Johnson (2006), 85 OR (3d) 665 (Div Ct), Pollack v.<br />
Advanced Medical Optics, 2011 ONSC 1966. Claims based<br />
on waiver of tort pursue “restitution” of benefits allegedly<br />
received by a defendant as a result of a defendant’s<br />
impugned conduct rather than compensatory damages<br />
calculated based on the plaintiffs’ alleged losses. <strong>The</strong><br />
quantified profit enjoyed by a defendant arising from an<br />
alleged wrong, the plaintiffs’ bar has argued, constitutes<br />
a common issue. In many cases, it appears obvious that a<br />
plaintiffs’ attorney simply invokes “waiver of tort” to attempt<br />
to minimize the significance of individual issues to<br />
increase the likelihood that a court will certify the class.<br />
Attorneys now frequently commence Canadian class<br />
actions on behalf of national and even international proposed<br />
classes. Several Canadian jurisdictions will even<br />
permit classes to include “foreign” class members on<br />
“opt-out” bases.<br />
Recently, for instance, Ontario courts certified securities<br />
class actions involving global classes of investors.<br />
In deciding that they had jurisdiction over the<br />
claims of non- Canadian investors as part of proposed<br />
“global” classes, the courts found “real and substantial<br />
connection[s]” existed between those claims and<br />
Ontario, largely because the issuers’ offices were in<br />
Ontario, the documents allegedly containing misrepresentations<br />
were prepared in Ontario and the securities<br />
were listed in Ontario. Silver v. Imax Corp., 2009 CarswellOnt<br />
7873 (SCJ); Ainslie v. Afexa Life Sciences, 2010<br />
ONSC 4294.<br />
Canada does not have a formal multidistrict litigation<br />
structure similar to the multidistrict litigation structure<br />
available in the United States. As a result, the introduction<br />
of national and global class actions has resulted in<br />
■■<br />
Lisa D. Parliament is a partner, and Myriam Seers is an associate, in McMillan<br />
LLP’s Litigation and Dispute Resolution Group practicing from the firm’s Toronto,<br />
Canada office. With expertise in product liability and class action defense, Ms.<br />
Parliament regularly advises leading companies on multi- jurisdictional coordination<br />
and cross-border issues, risk assessment and management, and litigation<br />
management. She is a member of <strong>DRI</strong>. Ms. Seers has experience acting for clients<br />
in a wide range of commercial litigation and arbitration matters with particular<br />
experience assisting clients in the natural resources, automotive, aviation, overlapping class actions in several provinces purportmanufacturing,<br />
and financial services industries. Think Globally, continued on page 69<br />
<strong>For</strong> <strong>The</strong> <strong>Defense</strong> ■ <strong>February</strong> <strong>2012</strong> ■ 61