By: Olivia Pomajba
The Class Action Clinic has selected the top five most notable class action decisions of 2021. These decisions set important precedents in class action practice, as the Court addressed the power dynamic between plaintiffs, defendants, and class action procedure itself.
Class Actions & the Gig Economy: Heller v. Uber Technologies, 2021 ONSC 5518
The Ontario Superior Court of Justice certified a class action against Uber on behalf of Uber’s drivers and couriers. In 2020, the Supreme Court of Canada heard arguments from both parties regarding the Court’s jurisdiction to adjudicate the dispute and ruled the arbitration clause was unconscionable because of the inequality between the parties and the barriers it imposed on drivers and couriers.
Central to this class action is the question of whether the class members are employees or independent contractors “working for” the defendant in some capacity. The relationship between Uber and class members is governed by “Service Agreements” which allowed the use of Uber’s software applications to provide rider transportation and food delivery services. The class alleges that the Service Agreement is effectively an employment contract, and that Uber has contravened statutory employment protections for minimum pay and overtime. Uber claimed that drivers and couriers are not employees working for Uber but are independent contractors – as outlined in the Service Agreement. The Court was satisfied with the cause of action criterion for breach of contract and breach of Ontario’s Employment Standards Act.
The class definition identifies putative class members simply as Uber app users (rather than determining whether they are “working for” Uber) and the Court requested that “extreme care” be taken with respect to notice of certification, citing the legal significance of the Arbitration and Class Action Waiver Clause and the legal consequences of exercising their right to opt-out.
Communications by Defendant Pre-Certification: Del Giudice v. Thompson, 2021 ONSC 2206
The plaintiff alleged that the personal confidential information of Canadian Capital One customers was compromised and filed an injunction to prevent the defendant from communicating with putative class members without Court approval.
The Court ruled that it will address communication to the class to ensure the class action procedure is fair to all litigants. The Court does not have a duty to approve all communications between putative class members and the defendant before certification. A class proceeding, the Court said, is an adversarial process that requires an impartial even-handed judge that does not take sides. It is class counsel and not the Court that may have a fiduciary responsibility to the class. Before certification, a defendant is entitled to communicate with putative class members unless it is in a manner that would visit an injustice on the putative class members or would otherwise undermine the integrity of the proceedings. Members of a proposed class, the Court said, have an obligation to protect their own interests and seek their own advice.
Class Actions are not a Lottery: MacDonald et al. v. BMO Trust et al., 2021 ONSC 3726
This was a motion for judicial approval of the parties’ settlement agreement for an all-inclusive sum of $100 million, and approval of class counsel’s legal fees based on the 25% contingency fee retainer. Previously, on a motion for summary judgement on the certified common issues, the court found that BMO had a fiduciary obligation to registered account holders and that foreign exchange mark-ups were not disclosed to registered account holders as required under trust law over a ten-year period.
Class counsel fees in a “mega settlement,” which the Court defined as in the $100 million range, must be considered on a case-by-case basis to determine a fair and reasonable fee. The “straight-line” application of the agreed-to contingency fee percentage works well for most class actions ($40 million range) but is not appropriate for mega settlements because it could result in undeserved windfalls which should be avoided. After all, the Court noted, class action litigation is not a lottery.
Social Justice, No Costs Awards: Elder Advocates of Alberta Society v. Alberta Health Services, 2021 ABCA 67
This was an appeal of the trial judge’s decision to order no costs against the unsuccessful plaintiffs after a long trial of a class action against Alberta Health Services. The action was launched on behalf of elderly and disabled Albertans whose paid accommodation was subject to an increase. The appellants contended that the trial judge erred in awarding no costs against the unsuccessful representative plaintiff. The respondent maintained that the claim was brought in the public interest and involved a novel point of law.
Unlike Ontario and Quebec, there is no class action fund in Alberta to assist representative plaintiffs. While there is a presumption that the successful party is entitled to costs, the Court of Appeal held that exceptions can be made where there is a public interest component to the litigation. The Court viewed the class members as constituting a disadvantaged group as many were medically frail residents of long-term care facilities with little income. Further, the Court of Appeal found that the claim was meritorious, and a trial was required to determine a novel point of law. While individual class members had a financial interest in the action, the extent of that individual interest could not economically justify the action.
Finally, the Court considered who would have been better able to bear the costs of the litigation. A costs award would not significantly change the defendants’ position, the Court concluded, but would inappropriately penalize the plaintiffs and may cause a chilling effect in future class actions. The trial judge is in the best position to assess what, if any, cost award is appropriate in the circumstances.
Parallel Individual Actions vs. Certification of Class Action: Workman Optometry v. Aviva Insurance, 2021 ONSC 3843
Two class actions and seventeen individual actions were launched following claims against insurance companies for business income loss from COVID-19 restrictions. The Workman class action targets 15 defendant insurers while the other parallel proceeding targets only Aviva. McCarthy Tetrault represented many small businesses in individual claims against the same defendants named in the Workman class action. Four defendant insurers brought a motion to stay the individual actions until the certification of the Workman class action was decided.
The Ontario Superior Court denied the motion. The Court found that the Class Proceedings Act was designed to enhance access to justice, and that delaying access to opt-out rights for legitimate individual litigants would hinder access to justice. To determine if the individual actions should be stayed pending certification, the Court considered the substantial overlap of facts and issues between proceedings. Most importantly, the Court was not satisfied that the temporary stay would not result in an injustice to the party resisting the stay. The Court found that there was ample of evidence that the individual plaintiffs would be prejudiced if their actions were stayed pending certification. The defendant insurers did not clear the “no injustice or prejudice” hurdle. The requested stay would result in significant unfairness to the individual litigants who had chosen not to participate in the class action.
A representative plaintiff in a class proceeding has the right to change counsel, as they are a genuine plaintiff who chooses, retains, and instructs counsel.
Looking Forward to 2022
The Class Action Clinic looks forward to reviewing important decisions and their impacts on class members in 2022 and beyond. The Clinic’s blog features commentary on class actions in Canada. If you have a question about class actions and require assistance from the Class Actions Clinic, please do not hesitate to contact us. To keep up to date on class actions in the news, follow the @ClassActClinic on Twitter.