Class Actions Changes In Ontario: You’d Better Hurry Up
December 11th, 2019
Ontario’s Attorney General has recently proposed a bevy of changes to the provincial justice system in Bill 161, the Smarter and Stronger Justice Act, 2019, including important changes to the Class Proceedings Act, 1992 that, among other things, expedite carriage motions and require plaintiffs’ counsel to move a case forward to certification quickly or risk dismissal.
Move It Along
A new section is being added to the Act dealing with carriage motions between different groups of plaintiff lawyers. If there are multiple proceedings involving the same or similar subject matter and some or all of the same class members, the court is now empowered to permit one action to proceed and to stay the others. The court can also bar new proceedings involving the same or similar subject matter from being commenced.
Once a proceeding is commenced (and registered as a class proceeding pursuant to another addition to the Act), any new proceedings dealing with the same or similar subject matters must be commenced within 60 days of the first proceeding. Carriage motions are now meant to be made within 60 days from when the first proceeding was commenced, and need to be heard as soon as practicable. Decisions on carriage are final and not appealable.
A party can now bring a motion to dismiss a proceeding for delay if more than one year has passed from when it was commenced and the representative plaintiff has not filed a final and complete motion record for certification. Otherwise, the parties can agree to a timetable to move matters forward. If a matter is dismissed for delay, a notice must be posted on the solicitor’s website or otherwise provided to class members who expressed an interest in the case at the solicitor’s own cost.
Notices under the Act are now required to be written in plain language and in English and French. The costs of a notice of certification are now only recoverable by a representative plaintiff if they ultimately win the case.
As for lawyers’ fees, the court will not approve them unless they are fair and reasonable. Whether fees are fair and reasonable will depend on the results achieved for the class members, the degree of risk assumed by the solicitor in providing representation, and the proportionality of the fees and disbursements in relation to the judgment or settlement amount. As for the “degree of risk assumed by the solicitor” factor, the court will consider the likelihood that it would have refused to certify the proceeding, the likelihood that the class proceeding would not have been successful, or whether there were any reports or funding arrangements that had affected the degree of risk assumed by the solicitor.
The court may now also order some of the fees and disbursements to be held-back until it is satisfied with the distribution of the monetary award or settlement funds, including the number of class members who made a claim for monetary relief and how many of them actually received money.
Third-party funding agreements require court approval and on such motions, defendants are entitled to make submissions. The court must be satisfied that the agreement is fair and reasonable, that it will not diminish the rights of the representative plaintiff to control the litigation, and that the funder is financially able to satisfy an adverse costs award in the proceeding.
If the funder is not ordinarily resident outside Ontario, if the defendant has an order against the funder for costs in the same or another proceeding, or if there is good reason to believe that the funder has insufficient assets in Ontario to pay costs, then the court can award security for costs up to the limit of the indemnity provided by the third-party funder.
Dealing With Multi-Jurisdictional Class Actions
A multi-jurisdictional class actions under the Act involve subject matters or class members in two or more Canadian provinces or territories. Where a proposed Ontario representative plaintiff wishes to certify such a class action in Ontario, they must give notice to the representative plaintiff of any class proceeding or proposed class proceeding elsewhere in Canada. That person is entitled to make submissions on the certification hearing of the proposed Ontario class action.
In determining whether it is preferable to certify a multi-jurisdictional class action in Ontario, the court will take into consideration some of the following: the alleged basis of liability in each of the proceedings, any differences in the laws of each applicable jurisdiction respecting liability and any available relief, the stage each proceeding has reached, the location of class members and representative plaintiffs in each proceeding, the ability of a representative plaintiff to participate in a proceeding and to represent the interests of class members, and the location of evidence and witnesses, amongst other considerations.
If it is not satisfied, then the court can refuse to certify a multi-jurisdictional class action in favour of it proceeding in another province or territory. It can also divide the class into Ontario residents and non-resident subclasses.