The Final Report: LCO recommendations for class actions in Ontario

24 July 2019

On July 17, 2019, the Law Commission of Ontario ("LCO") released its final report recommending changes to Ontario's class action legislation and practice (the "Report").[1] The Report is the final product of a 24-month process in which the LCO consulted with various stakeholders across Ontario. The more than 40 recommendations proposing amendments to the Class Proceedings Act[2] (the "CPA") and related policies focus mainly on improving access to justice by lowering costs and minimizing delays. The Report will be formally submitted to the Attorney General of Ontario, and the provincial government will decide on a response, if any, to the recommendations in the Report.



The Report addresses a broad cross-section of issues, including the process for initiating a class action, certification, settlement approval and distribution, counsel fees, costs, and monitoring/reporting on class actions. In total, the LCO made 47 recommendations aimed at improving judicial efficacy, access to justice, and reducing legal costs. Below is a high level overview of what we believe to be the most important recommendations.

Managing Class Actions

The LCO noted that delay was identified by many stakeholders as a significant issue in class action litigation. To that end, the LCO recommended the following reforms:

  • Requiring that within one year of commencing a claim, plaintiffs deliver certification materials and schedule a certification motion.
  • Introducing an automatic dismissal, with cost consequences, for cases that are not advanced by plaintiffs in a timely manner.
  • Implementing a detailed process and timetable for carriage motions, including costs provisions.

Multijurisdictional Class Actions

The LCO noted that stakeholders are of the view that the CPA does not provide sufficient guidance to Ontario courts when considering overlapping class actions in multiple jurisdictions.  To that end, the LCO recommended:

  • Formally adopting the Uniform Law Conference of Canada's Uniform Class Proceedings Act (Amendment) 2006 to harmonize provincial laws dealing with multijurisdictional class actions.
  • Development of a national protocol or other set of rules for the recognition of provincial certification decisions and multijurisdictional classes.
  • Uniform/consistent training for judges across Canada on the management of multijurisdictional class actions.

Certification

The LCO concluded that the certification regime in Ontario does not warrant major reform, but it did make the following recommendations:

  • Encouraging courts to interpret elements of the certification test more rigorously, including by considering whether alternative remedies are available.
  • Encouraging courts to support pre-certification summary judgment motions and motions to strike if they are likely to dispose of the action or narrow the issues.

Settlement Approval

The settlement approval process requires significant improvement, according to the LCO. It recommended:

  • Setting higher evidentiary standards for settlement approval, including a requirement that parties make full and frank disclosure of all material facts.
  • Adding more detailed requirements for settlement distributions, including provisions dealing with cy pres distributions, claims administrators, notices to class members, and requiring detailed final outcome reports.

Costs

According to the LCO, the rising amount of cost orders related to class action litigation is a significant barrier to access to justice. As a result, the LCO recommended:

  • Implementing a no-costs regime for certification and ancillary motions.
  • Permitting third party funding under prescribed circumstances.

All other proceedings would continue to have two-way costs applied, including motions to strike, disputes over jurisdiction, summary judgment motions, motions to de-certify, and trials.

Appeals

In light of Ontario's unique standing among Canadian provinces with respect to divided appellate jurisdiction and asymmetrical certification appeal rights between plaintiffs and defendants, the LCO recommended:

  • Providing both parties with a right of appeal directly to the Court of Appeal from certification orders.

The goal of this proposed reform is to reduce delay and the added expense associated with two levels of appeal.

For more information, please reach out to any member of Gowling WLG's Commercial Litigation group.


[1] Law Commission of Ontario, Class Actions: Objectives, Experiences and Reforms: Final Report (Toronto: July 2019).

[2] Class Proceedings Act, 1992, S.O. 1992, c. 6.


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