For The Defense, February 2012 - DRI Today

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