Class Actions Twenty-Five Years On
| Author | Suzanne Chiodo |
| Pages | 189-230 |
Chapter
6
CLASS
ACTIONS
TWENTY-FIVE
YEARS
ON
To
bring
about
the
(CPA),
the
Attorney
General
’
s
Advisory
Committee
(Advisory
Committee)
made
a
number
of
comprom
ises
in
order
to
secure
a
consensus
in
an
area
that
“
has
been
the
subject
of
controversy
and
debate.
”
1
Consumer
and
environmental
representatives
compromised
on
the
issue
of
costs,
while
the
business
interests
com
promised
on
the
issue
of
contingency
fees
and
a
no-merits
certification
test.
Both
groups
looked
to
the
government
to
establish
the
Class
Pro
ceedings
Fund
(CPF)
to
provide
further
financial
assistance
to
litigants.
While
the
result
led
to
the
advent
of
class
proceedings
in
Ontario,
and
thereafter
in
the
rest
of
common
law
Canada,
the
underlying
con
troversies
remained.
The
issue
of
costs
was
front
and
centre
in
the
first
action
brought
under
the
CPA.
In
Smith
v
Canadian
Tire
Acceptance
Ltd,
2
as
detailed
in
the
previous
chapter,
Larry
Whaley
attempted
to
shield
him
self
from
an
adverse
costs
award
by
putting
forward
a
“
straw
man
”
plain
tiff.
Although
the
court
quickly
thwarted
this
attempt,
the
case
raised
the
hackles
of
many
who
were
already
apprehensive
of
the
new
legislation.
3
1
Ontario,
Ministry
of
the
Attorney
General
(MAG),
Policy
Development
Division,
Report
of
the
Attorney
General
’
s
Advisory
Committee
on
Class
Action
Reform
(Toronto:
Ministry
of
the
Attorney
General,
1990)
at
24-25
[Advisory
Committee
Report].
2
1995
CanLlI
7163
(Ont
Ct
Gen
Div).
3
Jean-Marc
Leclerc,
“
The
Sport
of
Kings:
Financing
Class
Actions
in
Ontario
”
(2012)
8:1
Canadian
Class
Action
Review
121
at
129-31.
189
190
THE
CLASS
ACTIONS
CONTROVERSY
Twenty-five
years
later,
the
controversies
continue.
Some
were
envis
aged
by
the
Advisory
Committee,
such
as
the
intertwined
issues
of
costs,
funding,
and
certification.
Other
issues
have
arisen
because
they
were
not
sufficiently
addressed
by
the
committee
or
by
other
bodies
such
as
the
Law
Society
of
Upper
Canada,
namely,
the
issue
of
ethics
in
class
actions.
Still
other
controversies,
such
as
carriage
motions
and
overlap
ping
class
actions,
barely
crossed
the
drafters
’
minds,
but
today
threaten
to
undermine
the
very
purposes
of
the
CPA.
Given
the
controversial
nature
of
the
Act,
as
well
as
the
dearth
of
pre
cedents
on
which
its
drafters
could
rely
(after
the
United
States
and
Que
bec,
Ontario
was
one
of
the
first
jurisdictions
in
the
world
to
enact
class
proceedings
legislation),
it
is
scarcely
surprising
that
such
issues
have
arisen.
The
nature
of
the
Act
’
s
framework
papered
over
many
of
these
controversies
and
left
much
to
the
discretion
of
judges.
For
example,
while
traditional
costs
rules
continue
to
apply,
courts
have
the
discre
tion
to
make
no
order
as
to
costs
pursuant
to
section
31;
the
certification
test
under
section
5(1)
is
silent
regarding
the
evidentiary
burden
on
the
plaintiff;
and
the
Act
makes
no
mention
of
carriage
motions
or
national
class
actions,
which
have
been
managed
under
the
court
’
s
residual
power
to
determine
the
conduct
of
its
own
proceeding
under
section
12,
as
well
as
its
ability
to
stay
related
proceedings
under
section
13.
The
caselaw
arising
from
such
broad-brush
provisions
has
given
rise
to
uncertainty
and
inefficiency
as
the
concept
of
class
proceedings
has
matured
and
expanded
to
other
Canadian
jurisdictions.
This
is
why
the
Law
Commission
of
Ontario
(LCO)
commenced
a
review
of
the
CPA
in
2013,
stating
“
[i]t
is
unclear
whether
the
CPA
is
work
ing
as
intended
and
many
unforeseen
challenges
associated
with
it
have
become
fodder
for
discussion
in
conferences,
academic
papers,
profes
sional
associations,
social
media
and
other
commentary.
”
4
This
chapter
will
review
several
of
these
class
actions
controversies,
which
stem
from
the
manner
in
which
the
CPA
was
drafted
and
passed,
as
well
as
the
Act
’
s
4
Law
Commission
of
Ontario,
Review
of
Class
Actions
in
Ontario:
Issues
to
Be
Consid
ered
(Toronto:
Law
Commission
of
Ontario,
2013)
at
9,
online:
www.lco-cdo.org/
wp-content/uploads/2014/oi/class-actions-issues-to-be-considered.pdf
[LCO
2013].
After
stalling
for
some
time,
this
project
was
relaunched
in
2017
and
renamed
“
Class
Actions:
Objectives,
Experience
and
Reforms,
”
announcement
online:
www.lco-cdo
.
org/wp-content/uploads/20i3/o4/CA-Press-Release-F!NAL-Sept-22-20i7.pdf.
See
also
Law
Commission
of
Ontario,
Class
Actions:
Objectives,
Experiences
and
Reforms:
Consultation
Paper
(Toronto:
Law
Commission
of
Ontario,
2018)
[LCO
2018].
Class
Actions
Twenty-Five
Years
On
191
various
lacunae.
The
central
issues
that
will
be
addressed
include
costs
and
funding;
the
certification
process;
ethics;
and
overlapping
actions,
including
carriage
motions.
These
issues
are
crucial
to
the
operation
of
the
CPA
and
remain
contentious
despite
a
quarter
of
a
century
of
caselaw.
A.
COSTS
AND
FUNDING
The
Advisory
Committee
recognized
that
the
application
of
traditional
costs
rules
to
class
actions
would
expose
a
representative
plaintiff
to
a
potentially
enormous
adverse
costs
award,
far
in
excess
of
that
plaintiff
’
s
interest
in
the
proceeding.
That
is
why
the
committee
explicitly
stated
that
the
class
actions
remedy
was
contingent
on
a
public
fund
to
indemnify
representative
plaintiffs.
5
Neither
the
Ontario
Law
Reform
Commission
(OLRC)
nor
the
Advisory
Committee
reports
foresaw
the
development
of
third
party
litigation
funding;
6
however,
the
Advisory
Committee,
at
least,
recognized
the
underlying
necessity
of
such
funding.
7
Subsequent
caselaw
also
noted
the
“
grim
reality
”
posed
by
the
traditional
costs
rules:
[N]o
person
in
their
right
mind
would
accept
the
role
of
representative
plaintiff
if
he
or
she
were
at
risk
of
losing
everything
they
own.
No
one,
no
matter
how
altruistic,
would
risk
such
a
loss
over
a
modest
claim.
Indeed,
no
rational
person
would
risk
an
adverse
costs
award
of
several
million
dollars
to
recover
several
thousand
dollars
or
even
several
tens
of
thousand
dollars.
8
Funding,
whether
by
the
CPF
or
by
a
third
party
funder,
is
therefore
essential
in
order
to
remove
a
barrier
to
access
to
justice:
“
the
prospect
of
a
crushing
costs
award
to
be
borne
by
the
representative
plaintiff
or
counsel.
”
9
Such
arrangements
are
a
reality
of
the
committee
’
s
recommen
dation
that
the
traditional
costs
rules
apply
to
class
actions.
5
Advisory
Committee
Report,
above
note
I
at
72.
See
also
David
Gourlay,
“
A
Class
Act
Comes
of
Age:
Costs
and
Certification
as
the
OLRC
Report
Turns
Twenty
”
(2004)
1:2
Canadian
Class
Action
Review
273
at
280.
6
Jon
Bricker,
“
Ontario
’
s
Class
Proceedings
Fund:
A
Good
(If
Less
Than
Perfect)
Class
Action
Costs
Model
”
(2008)
4:2
Canadian
Class
Action
Review
399
at
417.
7
Advisory
Committee
Report,
above
note
I
at
56-59.
8
Dugal
v
Manulife
Financial
Corp,
2011
ONSC
1785
at
para
28
[Dugal],
9
Ibid
at
para
33.
While
an
indemnification
by
class
counsel
would
serve
the
same
purpose
as
an
indemnification
by
a
funder,
this
brings
with
it
its
own
problems
that
will
be
addressed
further
below.
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