Class Division

A nationally coordinated class-action system remains elusive as provincial class actions conflict and come to different conclusions

As lawyers Robert Carson, Olivia Dixon and Jessica Harding wrote in Osler, Hoskin & Harcourt LLP’s “US Guide to Class Actions in Canada”: “Most class actions in Canada are litigated in provincial courts, and there are differences among the provincial approaches, particularly regarding the class certification procedure, the opt-in or opt-out mechanisms and the potential for adverse costs awards.”

Predicting which provincial jurisdiction is more sympathetic for plaintiffs — or defendants — has been going on since Canadian class-action litigation was brought into force. It is too close to call. And really beside the point. For critics of the system, the fact that these actions can go on relatively independently puts pressures on litigants and slows down the course of justice.

In early September, the Law Commission of Ontario’s (LCO) Final Report, Class Actions: Objectives, Experiences and Reforms is the first independent, evidence-based and comprehensive review of class actions in Ontario since the enactment of the Class Proceedings Act (CPA) in 1992. Included in its recommendations was that there be “New provisions to better manage carriage hearings and multijurisdictional class actions.”

Sounds sensible enough. In the view of John Campion of Gardiner Roberts LLP, “Cross-border provincial class-action litigation, like inter-province free trade, is a much-desired goal. It is possible to design a system to meet all local distinctions without doing injustice. The blockage is self-interest but the benefits are huge for business and citizens variously seeking justice, compensation and exoneration.”

According to law firm Lenczner Slaght’s “Class Actions in Canada 2019,” “While certain provinces including Ontario have a disproportionate share of class actions in Canada, class actions legislation exists across the country. National classes that include residents from across Canada are possible and often advanced. However, it is also common for plaintiff’s counsel to advance parallel claims in different courts across the country. This can give rise to coordination problems.”

And yet the achievement of a nationally coordinated class-action system eludes us.

Says Katherine Kay of Stikeman Elliott LLP in Toronto, “there seems to be no solution to it” as yet, even though “there is a protocol from the CBA.” Cases move forward in more than one province that overlap substantially.

The CBA Protocol to which Kay is referring was described by the Canadian Bar Association in the 2011 “Class Actions: Baby Steps Towards National Coordination” by Colin Stevenson: The CBA “created the National Class Action database in 2007 in an attempt to deal with issues arising from multijurisdictional class actions. Initially this was a two-year pilot project by the Civil Litigation Section based on a recommendation by the Uniform Law Conference of Canada’s working group on multijurisdictional class actions. It has now been extended indefinitely.

“The concept was that counsel initiating a class action anywhere in the country would register their pleadings on a CBA regulated national database. The database would allow counsel involved in class actions, and the public, to more easily determine whether the issues to be litigated were already before a court, whether in another province or the same one.

“Counsel could then determine how best to coordinate potentially overlapping actions. The database would, in theory, also allow members of the public to determine more readily in which jurisdiction their interests were being looked after and reduce confusion about where an individual could file for compensation, whether in a settlement or otherwise.

“Although the database contemplates plaintiffs will file pleadings and the certification motion, there has not been universal acceptance of this requirement, notwithstanding practice directions requiring these steps to be taken in BC, Alberta, Ontario, Québec, Saskatchewan, Yukon, Newfoundland and the Federal Court. This lack of compliance has yet to be addressed by the Task Force.”

In 2018, the CBA re-affirmed its Protocol, in summary urging courts to follow the coordination steps in it (see

Not surprisingly, the American experience with class actions is longer and has more of a federal angle. Lawyers Margaret Zwisler, Christopher Yates, William Sherman, William Rawson and William Rinner of Latham & Watkins LLP explain: “After many years of growth in the use of the class action device in both federal and state courts, the US Congress and US Supreme Court have both acted to attempt to limit class actions, and additional bills are pending before the US Congress that would impose further limitations.

“In 2005, the US Congress passed the Class Action Fairness Act, 28 U.S.C. § 1332(d) (CAFA). CAFA expands federal jurisdiction over class actions, to reduce inconsistency among class actions litigated in the individual states, and provides for greater scrutiny of class action settlements and the payment of attorneys’ fees.

“In addition, recent decisions of the US Supreme Court have addressed the requirements for class certification. For example, in Wal-Mart Stores, Inc. v Dukes (131 S. Ct. 2541 (2011)), the Supreme Court overturned a grant of certification to a nationwide class of 1.5 million female Wal-Mart employees because the class failed to show that the suit involved common issues where there was no single discriminatory policy, but rather numerous independent decisions.”

According to the Lenczner Slaght LLP report: “Importantly, there is no Canadian analog to the American multidistrict litigation system, which allows US Federal Courts to coordinate and case manage a variety of proceedings from across the country relating to the same subject matter. In addition to allowing for coordination of class actions, the American MDL system can also allow for case management of large numbers of individual cases in parallel. By allowing plaintiff’s counsel to advance large numbers of similar cases in parallel, challenging or complex cases that would not be cost effective in isolation, particularly mass torts cases, become economically feasible.

“In Canada, because there is no equivalent to the MDL system, it is much rarer for plaintiff’s counsel to bring large numbers of individual cases in mass torts situations. Rather, such cases are typically brought as class actions; a failure to obtain certification often results in the end of the proceeding.”

Kay and her colleagues aren’t commenting on the effectiveness of the Protocol in the US system one way or another. But she and others are saying maybe it is time for more coordination among class actions in various jurisdictions.

Even if plaintiffs’ counsel select a jurisdiction on which to focus, there is a fair amount of randomness and unpredictability to the process. Moreover, class actions in Canada often follow upon US actions.

According to Kirk Baert of Koskie Minsky LLP in Toronto, “Various committees across the country have discussed this problem numerous times. No changes have ever been made that have accomplished anything. The same problems occur again and again. The US does not have the same problem. Most American class actions of any size or complexity are litigated in their federal courts where their jurisdiction is nationwide. Most Canadian class actions are litigated in the provincial superior courts, which do not have nationwide jurisdiction.”

Where is the harm in not having a nationwide program? Luis Sarabia of Davies Ward Phillips & Vineberg LLP in Toronto says: “Dealing with class actions on a province-by-province basis is expensive, inconvenient and inefficient for both Plaintiffs and Defendants alike. It would be far better to have a national approach to these types of legal proceedings. Unfortunately, our Constitution arguably does not allow for the creation of a mandatory, nationwide process like the process that exists in the United States.

“The only way to deal with this in a comprehensive and predictable manner is to have all of the provinces voluntarily enter into an agreement for the conduct of these types of proceedings. An example of a similar effort is the emerging agreement among some provinces for the creation of a national securities regulator. The difficulty has proven to be getting all the provinces on side with a common approach. Unfortunately, there does not seem to be an adequate solution in sight at this time.”

Most class actions settle. And they do so with practical cooperation among provincial actors and with a view to what is occurring in the US and other jurisdictions. After all, the issues are largely the same throughout. As the Lenczner Slaght report sets out: “While common issues trials are becoming more common in Canada, most class actions still settle at some stage of the proceedings. Because the representative plaintiff is advancing claims on behalf of an entire class of persons, the representative plaintiff has no power on his or her own to compromise those claims. Rather, any settlement agreement reached must be approved by the Court hearing the proceeding.”

Crawford Smith of Lax O’Sullivan Lisus Gottlieb LLP in Toronto offers this comment: “I agree with the Law Commission of Ontario’s final report on Class Actions that improvements need to be made. As matters now stand, multijurisdictional class actions are inefficient and lead to delay and suboptimal outcomes. Caution should be had however to expect too much from a substantive law perspective given the limits on provincial jurisdiction.”

Would a reformed Canadian system start with a nod to the US regime? Smith says: “I generally agree with the LCO that the CPA should be amended to reflect the Uniform Law Conference of Canada’s Uniform Class Proceedings Act 2006, and to harmonize with Alberta, BC and Saskatchewan multijurisdictional class-action legislation.”

But he cautions that training needs to come with that: “There will also need to be considerable judicial training as the expertise with these types of cases varies widely across the country.”

Sonia Bjorkquist of Osler, Hoskin & Harcourt LLP in Toronto puts forward by email examples of ways in which the Canadian system has adapted and cautions that adopting a US-like system might potentially add a layer of bureaucracy: “As the class-action landscape in Canada has matured, the Canadian courts have adapted reasonably well to the challenges of managing multijurisdictional class actions:

  • Courts are using the tools available to manage national class actions and avoid overlap with other provinces. These include:
    • Joint settlement approval hearings like in Endean (three judges heard settlement together).
    • Judicial protocols from the Canadian Bar Association that facilitate court-to-court communications. The 2018 revised protocol promotes greater coordination of class-action proceedings.

  • Superior courts in the provinces have been vigilant about preventing forum shopping — for example in BCE Inc. v. Gillis, the Nova Scotia Court of Appeal permanently stayed a class action when a similar class action had already been litigated in Saskatchewan.
  • The current system may not be perfect, but a national regime to manage class actions might just add another layer of bureaucracy to the management of class actions.
  • A truly national system could not ignore the division of powers and the provinces’ legislative authority over many matters affecting class actions. If it’s not sufficiently nuanced, a national system could actually complicate issues where separate class actions are necessary and appropriate, in light of differences in legislation.
  • The US MDL system is far from perfect as well, and now it is overburdened.
    • It does not have a screening mechanism for weeding out unmeritorious cases (though there is of course the screening mechanism of certification).
    • It has morphed from a pretrial management process to a platform for national settlements, with the unintended consequence of encouraging plaintiff firms to advance unmeritorious claims.”

In other words, to be continued, but cautiously.