Ontario the Outlier: How Changes to the Class Proceedings Act Might Make Certification More Difficult in Ontario than Anywhere Else

By Jasminka Kalajdzic

In December 2019, the Government of Ontario introduced Bill 161, Smarter and Stronger Justice Act, 2020, omnibus legislation that effects changes in the Class Proceedings Act, 1992 [CPA] among other statutes. The Class Action Clinic largely supports the amendments that aim to improve transparency and efficiency of the class action regime. Two proposed changes to the certification test, however, would undermine any improvements to the Act. The day after the Bill was introduced, I wrote a blog about my initial concerns with the new predominance and superiority requirements. The Clinic made written submissions to the Standing Committee on Justice Policy in March, setting out more detailed arguments against the amendments. On June 12, 2020, I testified before the Standing Committee to make additional submissions, and asked that the additions to the certification test be removed from the Bill.

What follows is the text of my prepared remarks, with some revisions for length and added hyperlinks for sources:

You have our written submission which contains detailed arguments about why we think the superiority and predominance clauses will result in Ontario having the most restrictive class action regime in the country. Having considered the language of the Bill further, and having looked at US jurisprudence more closely, I have three additional points to make. The first is to explain why our courts will inevitably rely on American jurisprudence and what that means for the new predominance requirement.

AMERICAN CASE LAW IS RELEVANT AND WILL BE CONSIDERED

AG Downey stated in his introduction of the Bill that it will be up to Ontario judges to interpret “predominance” in the specific context of the CPA’s evidentiary standard and will lead to a different interpretation. While the evidentiary standard may be different, the Bill introduces two additional steps to the certification test that must be proven. What do those new provisions mean? Defendants will undoubtedly be relying on American case law to interpret language that is so similar to American rules. In fact, our courts do this already.

In Caputo v. Imperial Tobacco Ltd., the court said that despite differences in our two certification tests, “the American experience can, nevertheless, provide guidance. American jurisprudence has to date been considered by the Ontario courts in several class proceedings”.

How do American courts, then, approach the predominance test in Federal Rule 23(b)(3)?

The US Supreme Court has described the predominance test as a demanding prerequisite that will not be established merely because the majority of contested issues are common. In Wal-Mart v Dukes, the US Supreme Court held, “[w]hat matters to class certification … is not the raising of common ‘questions’ – even in droves – but, rather, the capacity of a classwide proceeding to generate common answers apt to drive the resolution of the litigation” (at 9-10).  

There is no one approach to predominance in the various Circuits. In the US, some courts interpret predominance to mean that the common issues will resolve the litigation. Other courts state that common issues must dwarf the individual issues in number or importance. Some courts interpret predominance to mean that the common issues make up the majority of contested issues. This ambiguity is a warning signal – there will be a lot of energy spent by litigants and courts as they try and determine what to make of this new requirement.

What is known for certain is that the requirement makes certain types of mass wrong difficult or impossible to litigate as class actions. Comparing the case law gives us examples.

  • Tainted blood. Not certified in the US. Certified in Canada.
  • Defective medical devices. Not litigated as class actions in the US but certified in Canada. For example, the Dalkon Shield litigation was not certified in the US because the 9th Circuit appeals court said that even though the questions of whether and when defendants knew or should have known of the dangers of the Dalkon Shield to its users and the facts surrounding defendants’ design, production, etc. of the Dalkon Shield were all common, each woman had to prove that the manufacturer’s breach of duty proximately caused her particular injury. We routinely certify medical device cases like this one, such as silicone breast implant cases.
  • Employment discrimination. Gender discrimination case against Wal-Mart not certified, no recourse. In contrast, gender discrimination case against the RCMP certified and settled.

So, for Ontarians with a tainted blood claim, or a defective drug or medical device, or an employment harassment or unpaid overtime case, they will either have to engage lawyers to launch cases, with the added risk of being potentially liable for costs if they are not successful (as class members they don’t face that risk), or, more likely, they swallow their losses, they suffer the harm without redress, they get no justice. Neither of these results is good for Ontario. Neither of them can be the intended goal of this Bill.

IMPORTING JUST THESE TWO PIECES OF THE FEDERAL RULE IS CHERRY-PICKING

There is another reason why I worry the predominance requirement will actually be worse for Ontarians than Americans, and this is my second point. The clause was cherry-picked from a lengthy Rule 23 and dropped into our statute. But Federal Rule 23 is very different from our certification test.

The most important difference is that there are provisions that specifically allow for limited issue class actions. In those situations where a case does not meet the predominance test in Rule 23(b)(3), Rule 23(c)(4) provides that “an action may be brought or maintained as a class action with respect to particular issues.” Limited issue certification under this Rule seeks to isolate an issue (or certain issues) for class treatment even if class members’ claim for liability or recovery might ultimately be adjudicated individually. This other rule allows a class action to move forward even when it would not pass the predominance test.

Bill 161 does not have any provision like Rule 23(c)(4). Under our CPA, either a case gets certified or it doesn’t. There are no ‘limited issue class actions’ that do not need to meet the predominance test. So in this way, Bill 161 makes certification harder in Ontario than even in the US Federal Rule.

RULE OF LAW ARGUMENT

Some of you might be asking, ‘So what if there are fewer class actions?’ This brings me to my third point. Two things can happen if cases cannot proceed as a class action. (1) People with big losses hire lawyers to bring multiple lawsuits. How are dozens or hundreds of lawsuits better for the justice system than one class action? (2) Much more likely, people don’t sue at all. They swallow their losses. The big company that price gouged, or violated their privacy, or broke their contracts, gets away with the bad behaviour because the people who were harmed did not lose enough to warrant suing on their own. Worse, that company knows that if it got away with not paying for that wrongful conduct, it has little incentive to do better next time, to take better care, to ensure it abides by best practices. This is the concept of deterrence that class actions were designed to facilitate. Deterring rule-breakers is necessary for the rule of law.

In our society, rules are necessary – to make safe consumer products, for example, or for the protection of the capital markets.

Those rules need to be enforced. It is not fair to consumers that they have to suffer the consequences of corporate malfeasance. It is also not fair to the businesses that operate fairly that those who don’t abide by the rules, get away with it. This, at its core, is what we mean when we talk about the rule of law.

How do you enforce rules? Either the government does it, or you have private enforcement. The Attorney-General who introduced class action legislation in 1992 saw a role for private enforcement – that it would relieve some of the pressure off of resource-strapped government agencies. Private enforcement, specifically civil litigation, is an important way to encourage compliance with the law, and thus to promote the rule of law. This is actually a conservative principle. Let the private market (in this case, lawyers) do the enforcing, rather than the government.

CONCLUSION: THESE TWO CHANGES CONTRADICT THE AIMS OF THE BILL

The proposed changes to the CPA have been described repeatedly as modernizing Ontario’s class action regime. Respectfully, there is nothing modern about importing two American principles that were drafted in 1966.

Much of the Bill aims to improve efficiency of the justice system. But these two changes do the opposite. In the short term, they create uncertainty, the need for more evidence, more proceedings to sort out the new requirements, and more upheaval in the law.

In the long term, because the requirements will almost certainly lead to a far more restrictive certification test than any other jurisdiction in Canada, these two provisions will make Ontario the outlier. It is a regressive move at a time when all provinces, regardless of political party, are making court processes more accessible to residents.

.           .           .           .           .

Bill 161 is currently in Third Reading. The Standing Committee issued revisions to the Bill on June 23, 2020; the controversial changes to the certification test remained intact. Predominance and superiority are almost certain, therefore, to become the law of Ontario, and are the new hurdles on the path to justice for Ontarians.

Jasminka Kalajdzic / Associate Professor, Windsor Law / Director, Class Action Clinic / Co-principal researcher and co-author of the LCO Class Action Report

Long-Term Care Homes and the Rise of COVID-Related Class Actions

By Azra Alagic and Lovejot Bhullar

The COVID-19 pandemic is affecting how virtually every institution and business are run. The pandemic is also exposing their vulnerabilities. One of the most hard-hit institutions has been long-term care (“LTC”) homes. The rapid spread of the virus has illustrated the need to examine the standards of LTC homes in Canada.

There have already been more than 1,400 deaths from the pandemic in Canada. According to The National Institute on Aging, 82% of deaths in Canada have been in LTC homes, with most cases coming out of Quebec and Ontario. The virus has killed 1,300 long-term care residents in Quebec, accounting for 80% of deaths from the virus in that province. In Ontario, 671 LTC residents have died, representing two-thirds of the deaths in Ontario from COVID-19. 

Family members of loved ones who resided in these homes have turned to class action lawsuits to hold both private and government-run LTC homes accountable for unnecessary and preventable deaths.

Class Actions Against Private Long-Term Care Operators

In Canada, there are no federal or national standards or guidelines for the operation of LTC homes. For-profit LTC homes have four times as many COVID-19 related deaths than non-for-profit homes.  Privately-owned homes have been sued in 10 separate class actions.

For example, a $15-million class action has been proposed against six Ontario homes linked to Responsive Group Inc. and its subsidiaries for failing to provide adequate care to residents. As of April 23rd, 71 residents had died in the six homes during the pandemic.

A $120 million class action has been proposed against Revera Inc and Sienna Senior Living, which together own and operate 105 long-term care and retirement homes in Ontario. It is estimated that the action could include as many as 3,000 residents from the homes and 10,000 family-members who will serve as plaintiffs.

The plaintiffs in these class action lawsuits allege negligence and breach of contract. It will be argued that the homes breached their contract by failing to: ensure adequate staffing, contain the illness, communicate with family members, properly plan for and respond to the pandemic and comply with public health guidance and directives.

There is already evidence in the public domain that suggests some of these facilities may not have met the standard of care expected in the industry. One report has highlighted that during an outbreak at Anson Place in Hagersville, the pandemic plan was not properly followed.

The unsuitable living conditions in Ontario’s LTC homes became an issue at the start of the pandemic and led to the provincial government requesting assistance from the Canadian Armed Forces (“CAF”) in early April.

A report by the Ontario Health Coalition, an umbrella organization that advocates for publicly funded health care on behalf of various other health organizations and individuals, showed that 9% of COVID-related deaths occurred in for-profit LTC homes (vs. 5.25% and 3.62% in non-profit and publicly-owned homes, respectively). This and other reports have prompted calls to overhaul or even abolish the private LTC home model and will likely become a larger point of contention as more studies and inquiries are conducted.

This coincides with a recent report released by the CAF detailing the dangerous and unsanitary conditions found in many LTC homes. In response, the Ontario government has begun an investigation on the basis of the CAF report, and announced that it will be launching an independent commission into the system in July, 2020. The report has also led the government to take over the management of certain LTC homes.

Class Actions Against the Province of Ontario

In addition to class actions against private companies, a class action has been filed against the government of Ontario on behalf of all Ontarians who reside in LTC homes. This class action points to the provincial government’s alleged failure to oversee LTC homes as the cause of spread of the virus and loss of life. In particular, the claim alleges negligence and breaches of the Charter of Rights and Freedoms.

Ontario’s response has been contrasted with that of British Columbia, where health officials took steps in late March, such as restricting visits, restricting workers to only one home, and focusing testing on homes and workers. Though LTC homes in BC have been far from unaffected, a majority of COVID-related deaths in LTC homes in Canada are located in Ontario and Quebec.

COVID-19 testing policies may likely be at issue in class actions or other lawsuits brought against the provincial government, as testing is an issue almost entirely under the purview of the government and public health agencies. The government did not expand testing and other measures in LTC homes until late April – almost a month after the first LTC home death. Bio-Test Laboratories has already been named in a class action for the use of defective COVID-19 test kits in an LTC home.

The outbreak at Anson Place Care Centre in particular has brought to light the consequences of belated government action. This includes keeping infected residents alongside those who were healthy, shifting blame to workers or visitors, conducting inspections by phone only, and waiting for nearly a month before banning staff from working at more than one facility.

Commentators say that these class action lawsuits may face difficulties in showing that the actions of operators or government caused the deaths and that the care was below the established standard.

Given the fast-moving nature of the crisis it will be difficult to establish the correct standard of care. Though it is hard to imagine that either private institutions or the government could be completely absolved of any responsibility, showing negligence, rather than just difficulty responding to an unprecedented crisis, will be difficult. Nonetheless, it is clear that the legal fallout will be significant and that policies relied upon by private companies and public agencies will need major overhauls.  

The current list of class actions against LTC home operators in Canada includes:

To follow the Class Action Clinic’s coverage of long-term care class actions, follow us on Twitter at @ClassActClinic and our hashtag #covidclassaction.

Beyond Four Corners: Settlement Agreements as Contracts in Class Actions

By Karly Lyons

In a representative action where those affected (class members) have little to no practical say in the crafting and execution of a settlement, should the settlement document be treated as a contract between parties? In a split decision, the Supreme Court of Canada provides some guidance – and leaves many unanswered questions – regarding the nature of a class action settlement document post-settlement in its 2019 decision, JW v Canada (AG).

JW had brought a claim for compensation under the Independent Assessment Process (IAP) of the Indian Residential Schools Settlement Agreement (IRSSA). He based his claim on sexual abuse he had suffered while at Residential School. The claim adjudicator denied the claim as JW could not prove the “sexual intent” of the nun who abused him.

Upon Request for Direction, the Court of Queens Bench of Manitoba found three errors had been made including importing a requirement of sexual intent in order to be eligible. The Manitoba Court of Appeal came to a different conclusion and held as long as an IAP adjudicator refers to relevant sections of the settlement agreement, there is no basis for a judge to intervene regardless of how the sections are interpreted or applied.

At the Supreme Court of Canada, three sets of reasons were provided—two concurring and one dissent.

Justice Abella, writing for the majority with Wagner CJ and Karakatsanis J, held judicial intervention was necessary for JW as the adjudicator failed to implement the settlement agreement. At para 16, Justice Abella quoted Justice Winkler, who approved the settlement agreement, that, “as in all class actions, the courts must strive to protect the class members and ensure that the benefits they agreed to are actually delivered”. The protocol implemented in Manitoba gave courts “broad supervisory and administrative authority in overseeing the application and implementation of the Agreement” and the authority given was necessary to address “the serious harms caused by Residential Schools and was a fundamental precondition of judicial endorsement”. Abella J noted there was a “foundational link” contemplated between the agreement and judicial supervision, and while the parties do not have a broad right to intervention by the bench, they do “have a right to the implementation of the terms of the settlement they bargained for”. Overall, Abella J held the court has a duty to ensure the agreement is implemented “in accordance with the intentions of the parties” as reflected in the terms.

Cote J (Moldaver J concurring) agreed on the outcome but not in the role and scope of judicial intervention. Cote J held a judge cannot take on a role envisioned for an expert adjudicator within the terms of the settlement. Administrative law remedies are not available because the settlement is a contract and the adjudicators are not state actors. Any recourse of a supervising court is bound by Implementation Orders and class action legislation in each province. Cote J held that with a class action settlement, “the terms of the agreement are determinative” and the authority and supervisory jurisdiction is “limited and shaped by the terms of the agreement, once it is approved and determined to be fair, reasonable, and in the best interests of the class”. Any judicial review of the IAP should be narrow and only apply if the adjudicator failed to apply the terms contemplated by the parties. Claimants relinquished their rightto go to court when they entered into the IRSSA.

Cote J agreed with Abella J on the outcome, however, because the Chief Adjudicator of the Indian Residential Schools Adjudication Secretariat conceded that JW’s case was wrongly decided but  concluded that there was no mechanism for him to reopen the case. Cote J held that the lack of a mechanism constituted a procedural gap in the agreement which allowed for court intervention and review—on a case by case basis.

In their dissenting opinion, Justices Rowe and Brown agreed with Cote J’s statement of the law about the supervisory jurisdiction of courts in a class action settlement – but held that no “gap” in settlement terms existed on the facts before the court. Rowe J held that the settlement is a complete code which limits intervention; to hold otherwise would be to defeat the intention of the parties. Rowe J noted the Chief Adjudicator had his own remedial powers which could be employed and as such there is no “gap”.

This requirement of a “gap” for judicial intervention has been reflected in the cases post-JW. In Fontaine v Canada (AG), a Residential School survivor was sexually assaulted by a guidance counsellor working for the Department of Indian Affairs and Northern Development while being driven to a residential school. The initial adjudicator held the claimant was a “non-student” at the time of her assault and the abuser was not directly employed by the residential school. As such, the claim was denied. When it appeared before the Supreme Court of British Columbia, Brown J held the adjudicator had turned their mind to the terms contemplated in the settlement. As such, there was no “gap” and the adjudicator’s decision was upheld.

Similarly, in Pro-Sys Consultants Ltd. v Microsoft Corporation, Myers J of the Supreme Court British Columbia held the court has no jurisdiction to order a notice program for the implementation of a settlement that goes beyond the program envisioned by the parties in the settlement agreement. The plaintiffs appeared before the court and proposed an eight (8) part notice campaign including newspapers, a call centre, search engine marketing, etc. Myers J held that while it was “laudable” that the plaintiff wanted to achieve maximum recovery, all a court can do is interpret the settlement agreement and it is therefore bound by the notification plan contained in the agreement. Myers J suggested extensive notice programs should be included in the settlement agreement itself because the court is in no position to construct a notice program once the agreement is approved.

Besides the language out of the Supreme Court related to “gaps”, the exact scope and nature of a settlement agreement in a class action remains unclear, as do the implications for access to justice. The judges in three sets of reasons in JW take very different views on the law – either a “gap” in situations contemplated by the settlement must be identified, as in a contract, or the court has discretion to ensure parties received what they bargained for in a more general sense.

Despite the ambiguity of the Court in JW, lower courts have adopted a very narrow view of the court’s judgement and have generally viewed the settlement agreement as private in nature. They will only interfere with a claims adjudicator’s decision if there is a gap in the agreement; where there is no gap, the court will not overrule the adjudicator, even if the court disagrees with the decision. This approach privileges efficiency, but potentially at the cost of justice for the individual class member. When an action is representative in nature, sticking to the four corners of a contract may deny access to justice for class members who may be technically outside of those corners but were contemplated by the parties to be within them.

Where’s the Data? Canadian and American Approaches to Class Action Settlement Outcomes

By Alexandra Lawrence

In October 2019, the United States Federal Trade Commission (FTC) held a public workshop on how to improve class action settlement notices for consumers. The FTC’s primary concern was to ensure that consumers are receiving appropriate redress when competition and consumer protection class actions settle. Much of the discussion at the workshop centered on the FTC’s Staff Report “Consumer and Class Actions: A Retrospective and Analysis of Settlement Campaigns” and used the data from that Report to discuss how settlement notices can be more effective.

This workshop is just one example of the United States’ more comprehensive and data-driven approach to reviewing the effectiveness of settlement notices in class actions, a topic that has received less attention in Canada. The FTC Staff Report and the subsequent workshop were born out of concern that the settlement notice programs of consumer class actions lacked effectiveness and were not achieving their expected outcomes. As a consumer protection agency, the FTC is concerned about settlements not adequately compensating consumers because the settlement process itself creates barriers to class members participating. In light of this concern, the response of the FTC was to initiate a quantitative, data-driven study to identify deficiencies in the settlement notice process, followed by a qualitative approach by way of the workshop to discuss the Report’s findings.

A data-driven approach to class actions has also been pursued elsewhere in the United States. In November 2018, the United States District Court for the Northern District of California reformed its procedural rules for class action settlements, mandating the disclosure of claims rate data and a full accounting of monetary recovery. The Northern District’s Procedural Guidance for Class Action Settlements were discussed at the FTC’s workshop and were praised by several panelists.

Beyond encouraging a data-driven approach to assessing the effectiveness of class action settlements, the FTC also presented data on best practices for settlement distribution. Not surprisingly, a direct payment approach statistically yields the greatest success in compensating class members. A direct payment is only possible when the class member’s identity and contact information is available to the defendant, allowing for a cheque or payment being sent directly to the class member. The FTC reported that 67% of individuals who receive cheques, cash them. In comparison, a claims-made approach, where class members have to take active steps to make a claim for compensation, yields a claims rate of 5-20%.

The FTC noted that in many class actions, a claims-made approach is favoured over a direct payment approach even where the defendant is in possession of the required information. Part of its advocacy work is to educate courts about favouring claims-made processes over direct payments.

Canada’s Approach to Class Action Settlement Outcomes

In Canada, while some discussion about a need for a data-driven approach has taken place, reporting is mandatory in only one jurisdiction so far. Rule 67 of the Superior Court of Québec in Civil Matters requires that information such as the number of class members who made a claim and the amount paid to each class member be reported to the court at the end of each class action. This rule came into force on September 1, 2012, several years before other jurisdictions started considering these types of reforms.

In its Final Report, Class Actions: Objectives, Experiences and Reforms, the Law Commission of Ontario (LCO) acknowledged that a lack of empirical data about settlement outcomes has made the analysis of said outcomes more challenging. The LCO recommended that outcome reporting be mandated in Ontario. The Ontario government adopted this recommendation in Bill 161. If passed, the new provisions in the CPA will require reports at the end of a settlement distribution, including information about the amount of the settlement funds paid out, the number of class members who received notice of the distribution, and the take-up rate – the number of class members who made a claim and were compensated.

In terms of the method for distributing settlement payments, there appear to be far fewer reported cases of direct payments to class members in Canada than in the United States. One of the few cases where a direct payment was made to class members occurred in CBS Pictures v Dillon, a case concerning the surplus rights under a retirement pension plan. There, the identities of all but one of the 139 class members were known, and the settlement allowed for class members to choose between either cash, benefit enhancements, or a combination of both for their approximately $113,000 payouts.

Few Canadian direct payment class actions have involved a scheme similar to that championed by the FTC, where class members are sent cheques directly without any claims process, but it is impossible to say for certain without more data. The question of why direct payments are – or at least appear to be – less common than claims-made approaches could be because class members’ contact information is not known by the defendant, or because damages cannot be determined without a claims process. It could also be the case that there are direct payment distribution methods being utilized in class actions, but we aren’t aware of them because there is no mandatory reporting obligations about settlement distribution outcomes outside of Quebec.

The LCO Report and Quebec’s court rules demonstrate that some attention in Canada is being paid to the lack of empirical data on class action settlement outcomes, but it is clear that in comparison to the United States, Canada is still far behind in this regard. Class actions are procedural tools which are designed to provide access to justice to the masses. How can we know whether access to justice – where justice is defined as compensation for harmed class members – is being achieved if we cannot measure the outcomes of class actions? When it comes to class action settlement outcomes, more data is definitely better.

The Nevsun Decision: A Future Role for Customary International Law Claims in Canadian Class Actions?

Guest blog by Scott Robinson

On February 28, 2020, the Supreme Court of Canada released its long-awaited decision in Nevsun Resources Ltd. v. Araya. The Court’s decision holds important principles for the development and recognition of public international law in Canada, including the potential for corporate liability under it. It also provides an opening for potential future class actions regarding these issues in Canadian courts.

The case initially arose in the context of a proposed class action against Nevsun in B.C. on behalf of more than 1,000 individuals alleged to have been compelled by Eritrea to work in an Eritrean mine owned by Nevsun, a Canadian company, between 2008 and 2012. In addition to various torts under traditional Canadian law, the claim sought damages for breaches of customary international law prohibitions against forced labour, slavery, cruel, inhuman or degrading treatment, and crimes against humanity as separate and distinct actionable claims in their own right under Canadian law.

It was found in the B.C. lower courts that the class action regime could not be availed because the proposed plaintiffs were not B.C. residents, and a common law representative proceeding could not be maintained, such that the case was to proceed as a multi-party traditional lawsuit. Nevsun, however, also moved to strike the customary international law claims as non-justiciable or doomed to fail, yet the B.C. courts all refused to do so. Nevsun appealed on these points. The majority of the Supreme Court of Canada upheld the B.C. courts and dismissed Nevsun’s appeal.

The most pivotal points in the Supreme Court of Canada’s majority decision are as follows:

1.  Customary international law remains a core and evolving part of Canadian common law by virtue of the “doctrine of adoption” that posits customary international law is automatically adopted into domestic law without any need for legislative action. This has long been the end result of Canada’s monist tradition with respect to customary international law, but the Court’s decision firmly settles this issue. Unlike foreign law, judicial notice is to be taken of customary international law. Moreover, Canadian courts have an express “role in implementing and advancing customary international law”.

2.  Claims for violations of customary international law by private actors will generally survive a motion to strike in Canada, even if novel. These claims can be actionable at common law, save for conflicting legislation. It is not necessary that such claims be packaged under existing torts, or that new nominate torts be recognized to advance such claims, or that traditional tort principles be relied upon to achieve damages or other remedy. Indeed, a separate, direct, private law damages remedy for breaches of customary international legal norms may be possible.

3.  If there was ever any doubt, the “act of state doctrine” – which in short precludes domestic courts from assessing the sovereign acts of a foreign government, even if in a peripheral manner – never was, and certainly is not, part of Canadian law.

4.  Endorsing a modern non-state-centric public international law, the decision expressly holds open the idea of corporate private civil liability in Canada for violations of customary international law attributable to the corporation. Fundamentally, claims for such redress against a corporationcan survive a motion to strike: “it is not ‘plain and obvious’ that corporations today enjoy a blanket exclusion under customary international law from direct liability for violations of ‘obligatory, definable, and universal norms of international law’, or indirect liability for their involvement in … ‘complicity offenses’”. The sheer force of this legal development as regards international legal liability for multinational corporations operating in or from Canada cannot be overstated. As a minority of the Court noted, however, it is also a development that generally puts Canada in conflict with other jurisdictions, especially the United States, which have typically found corporations to be beyond the scope of liability for violations of customary international law. It will be very interesting to see how this norm of at least potential prima facie corporate liability at international law will continue to develop in Canadian jurisprudence. The trial of the Nevsun case may provide this opportunity, but no doubt others will follow.

5.  As for the potential impact of the decision on class actions in Canada, it is no secret that class actions have long been a vehicle capable of shifting public policy. That said, this opening of the door to claims for breaches of customary international law in Canadian courts – and significantly, potentially as against corporations – only further aligns with this notion. It would not be surprising to find these types of stand-alone claims for customary violations to be litigated more and more in Canadian class actions going forward, especially as Canadian class actions law continues to address more transnational issues concerning transnational actors.

Ultimately, the scope and substance of any private law remedy for such breaches of customary international law is at present unsettled. The question remains: “can our domestic common law develop appropriate remedies for breaches of adopted customary international law norms?” And further, can we develop “a civil remedy in domestic law for corporate violations of the customary international law norms adopted in Canadian law”? It was not “plain and obvious” to the majority of the Supreme Court of Canada that both questions could not be answered affirmatively. Indeed, “[a] good argument can be made that appropriately remedying these violations requires different and stronger responses than typical tort claims, given the public nature and importance of the violated rights involved, the gravity of their breach, the impact on the domestic and global rights objectives, and the need to deter subsequent breaches.” If so, and if advanced in a class-wide setting, such claims could not only possibly lead to larger classes, but also lead to damages worth millions, especially when considering the “heinous nature of the harm caused by this conduct” typically found to have violated customary international law principles.

Scott Robinson is an associate at Strosberg Sasso Sutts LLP in Windsor. Views are his own.

No Good Unless for the Public’s Good: When Can a Third Party Intervene after Certification is Denied?

By Sonya Molyneux

As is the case elsewhere in Canada, third parties in Quebec must obtain court approval before they can intervene in a class action. Both in Quebec and Ontario, courts are hesitant to grant intervenors precious court time before a class action is authorized/ certified.  On February 12, 2020 Amnesty International (“Amnesty”) was granted intervenor status in the ongoing climate change class action, ENJEU v Canada (see decision). In its judgment, the Court clarified the criteria to be considered when exercising the judicial discretion to include or exclude a third-party seeking leave to intervene. 

Background

In November 2018, ENvironment JEUnesse (“ENJEU”) filed an application with the Superior Court of Quebec to authorize a class action against the Government of Canada (“GOC”). The proposed class action was made on behalf of all Quebec residents aged 35 and under. ENJEU’s ambitious suit includes petitioning the court to compel the GOC to pay $100 to each member (approximately $340 million total) into a fund to mitigate and adapt to the climate crisis. ENJEU alleged the government’s failure to take adequate action to reduce greenhouse gas emissions in the face of global warming violates the class’s fundamental rights protected by the Canadian Charter of Rights and Freedoms and Quebec’s Charter of Human Rights and Freedoms.

Authorization Denied at the Superior Court of Quebec

Like certification in the common law provinces, authorization is the first step in the life of a class action in Quebec. The motion judge’s role is to screen out frivolous and meritless claims. Widely considered a class action-friendly jurisdiction, Quebec does not grant the motion judge any residual discretion once the four criteria for authorization are met.

Although Justice Morrison found all issues raised before the court justiciable, he did not authorize the proposed class action on the basis that the class’ configuration was inadequate (see original version of his decision and unofficial English translation). Justice Morrison rejected the ‘arbitrary’ age parameters of the proposed class, stating, “But why choose 35? Why not 20, 30 or 40? Why not 60?” In addition, the inclusion of children below the age of majority posed an issue of consent for the Court, particularly since ENJEU “is not a statutory entity created by legislature to protect the rights of minors or to act on their behalf.” Justice Morrison concluded it was inapt to proceed in the form of a class action. A claimant could litigate for a declaratory judgment single-handedly.

Decision to Grant Amnesty International Intervenor Status

Justice Bich of the QCCA contemplated Amnesty’s application to intervene on the appeal by asking:

1.     Whether Quebec’s procedural framework allows friendly intervenors at the authorization stage?

2.     If so, should intervenor status be granted in this case?

Justice Bich consulted provisions of the Quebec Code, class action jurisprudence, and academic research. Article 185 of the Quebec Code sets out the three types of voluntary intervenors:

(1)  An aggressive intervenor – the third-party who requests recognition of a right against the parties;

(2)  A conservatory intervenor –the third-party who wishes to replace one of the parties or intends to support/ assist their claims

(3)  A friendly intervenor– the third-party seeking to participate in argument during the investigation.

Justice Bich determined it is less practical and intuitive for judges to grant conservatory and aggressive intervenor status on an appeal for authorization. She expressed concern that these parties will provide little value for the court reviewing the appeal for authorization. She held, however, that a deciding court may approve a friendly intervenor when an appeal for authorization is in progress, where it determines that the intervention will be expedient, and the third party’s contribution will be useful. Generally speaking, courts should have a “certain flexibility” for friendly intervenors where there is public interest or law at stake.

Amnesty requested amicable intervenor status, a move supported by ENJEU and opposed by the GOC. Amnesty proposed to participate in the debate by raising arguments outside the scope of the appellant and respondent’s facta, namely, on matters of international law and the rights of children. In granting intervenor status, Justice Bich relied heavily on two key points. First, Amnesty has expertise in international instruments, including the Declaration of the Rights of the Child and the International Covenant on Civil and Political Rights that both parties lack. Second, the case involved the adjudication of fundamental rights of a public nature. Justice Bich noted it would have been preferable for Amnesty to have sought intervenor status at the motion for authorization itself. Amnesty is limited to making legal observations to assist the appellate court.

Analysis: Is Ontario Less Friendly to Intervenors than Quebec?

In both common and civil law jurisdictions, it is contentious whether an intervenor can be involved in the appeal of an authorization/certification decision. Quebec law is not entirely settled and applicants in Ontario have had mixed results. In Quebec. for example, third parties seeking aggressive intervenor status have not fared well in an appeal of authorization and after authorization was granted (Example 1; Example 2). By and large, however, the Quebec court is more liberal than Ontario in granting friendly intervenor status at the settlement stage.

In Ontario, Rule 13 of the Rules of Civil Procedure enables courts to grant intervenor status “for the purpose of rendering assistance to the court by way of argument”. Under s. 12 of the Class Proceedings Act courts can make orders they deem appropriate to ensure a fair and swift determination of a class action. In theory, this provision grants Ontario courts a broad authority to regularly include intervenors in an appeal for certification. In practice, however, Ontario rarely allows friendly intervenors when certification is contested. For example, in the case Fairview Donut Inc. v the TDL Group Corp, Justice Lax refused the motion for leave to intervene in the certification appeal, on the basis that it would “only serve to delay to determination of issues and may serve to take the proceeding off into a tangent”. Matthew Good attributes the Ontario courts’ restrictive approach to “the narrow confines of certification itself”, namely, that certification is supposed to be a procedural hurdle, rather than a substantive decision on the underlying issues.

When assessing an application to intervene, a court decides whether the proposed intervenor will add a useful, new perspective to the debate. In an adversarial dispute, friendly intervenors provide valuable insight beyond a bipartisan purview. As might be the case in EnJeu, an appeal of an authorization/ certification decision might be the last opportunity an intervenor has to influence the Court’s decision-making. Judges should make greater use of their broad discretionary powers to include friendly intervenors in class action litigation on issues affecting wide segments of society.