Conflict of Laws in Large-Scale Claims

• Author: Jamie Cassels - Craig Jones
• Pages: 397-432

9. Conflict of Laws in

Large-Scale Claims

A. INTRODUCTION

Conflict of laws, or private international law as it is known in the English

tradition, is a complex field in itself that has generated numerous excellent

and comprehensive works. In this chapter, we provide only a general

overview of the field, with particular attention to issues that are likely to

arise in the context of multijurisdictional litigation of the type addressed by

this book: mass torts, product liability claims, and class action suits.

B. AN OVERVIEW OF CONFLICT OF LAWS ANALYSIS

Courts operate in a framework of restraint when taking control of matters

that are distant from their immediate vicinity. The reasons why they do so

should be immediately apparent: to avoid inconsistent decisions and waste

of judicial resources as several courts address the same question; to avoid

“forum-shopping” — the practice of plaintiffs seeking out the most

favourable environment for litigation; and to forestall unnecessary consid-

eration of questions of foreign law, with which the forum court is unfamil-

iar. There are also considerations of “comity,” that is, an inclination to defer

to other jurisdictions with a greater claim to legitimate interest in the sub-

397

ject matter of the litigation, so as to avoid trenching on the lawmaking —

and law enforcing — rights of other governments, perhaps in part in the

expectation that other jurisdictions’ courts will similarly defer when the sit-

uation is reversed. A system based upon a restrained approach to jurisdic-

tion also increases the likelihood that the usually deferential courts’

decisions will be enforced elsewhere.

To effect these ends, Canadian courts usually address questions involv-

ing conflict of laws sequentially.1First, the court considers whether it has

jurisdiction simpliciter (sometimes called personal jurisdiction) over the

defendants. This is a threshold issue and either answered in the affirma-

tive or in the negative, without room for discretion on the part of the court.2

If “yes,” then the court proceeds to consider other conflicts questions. If

“no,” then the action against the defendant cannot proceed.

Second, the court will ask whether, notwithstanding that it has jurisdic-

tion over the parties (jurisdiction over the plaintiff — at least in individual

claims — may be assumed as that party, by filing its claim, has attorned to

the jurisdiction of the court), it should decline to exercise that jurisdiction.

The court’s decision in this respect is discretionary but frequently analyses

whether there is a more appropriate forum for the proposed hearing of the

issues.

Third, assuming that the first two questions have been answered in

favour of the court asserting its jurisdiction over the matter and parties

before it, the court will turn its attention to the applicable law. That is to say,

notwithstanding that the matter will be heard in the forum court, should it

be the law of the forum that applies or the law of another jurisdiction; if the

latter, which jurisdiction? In truth, this question is not as discrete as it

appears, because many courts will consider choice of law questions when

considering whether to exercise its discretion to decline jurisdiction, or

even (where, for instance, jurisdiction is conferred by a local statute)

whether it has jurisdiction at all.

A final aspect of the conflict of laws is the enforcement of foreign judg-

ments: Under what circumstances will the courts of one jurisdiction

enforce the decisions of another? This question ordinarily arises upon

enforcement, that is, when a successful plaintiff applies to the forum court

to have a foreign judgment enforced by that court. However, it might also

be argued with respect to the forum conveniens analysis: a defendant might

THE LAW OF LARGE-SCALE CLAIMS398

1Canadian International Marketing Distributing Ltd. v. Nitsuko Ltd. (1990), 56 B.C.L.R.

(2d) 130 at 131–32 (C.A.); Jordan v. Schatz, 2000 BCCA 409 at para. 21.

2Ell v. Con-Pro Industries Ltd. (1992), 11 B.C.A.C. 174 at 184.

say to the forum court, “You should not take jurisdiction because, in any

event, your judgment on these matters will not be recognized elsewhere.”

These questions are relatively straightforward in the case of an “ordi-

nary,” individualized action in tort or contract. They naturally become more

difficult in the case of mass torts or other complex litigation, where the par-

ties, putative victims, and even the causes of action may be spread across a

host of jurisdictions.

As the complexity of litigation, mirroring the increasingly interjuris-

dictional nature of commerce, has expanded across borders, courts have

struggled to develop a conceptual system to deal with events that have

“happened” in several jurisdictions. Does a court take jurisdiction over a

case involving a product manufactured in one jurisdiction that did harm to

many? If it can deal with local victims’ claims, can it also address claims

where the harm was suffered elsewhere? If so, under what circumstances?

C. THE “CONSTITUTIONALIZATION” OF PRIVATE

INTERNATIONAL LAW

At the same time as Canadian provinces began to design class action

statutes, the law of interjurisdictional conflict in tort was undergoing a sig-

nificant restatement, one that has received wide notice in the common law

world.3This revolution was effected through two landmark cases, Morguard

Investments Ltd. v. De Savoye4and Hunt v. T&N plc.5

1) Morguard

In Morguard Investments Ltd. v. De Savoye,6the Supreme Court of Canada

was considering the obligations of a court to recognize the judgments and

orders of sister courts in other provinces. The plaintiff in Morguard had

previously obtained a judgment in the Alberta courts against the defen-

dant, a British Columbian resident, who had defaulted on a land mortgage

in Alberta. Under Rule 30(g) of the Alberta Rules of Court, the Alberta court

could assume jurisdiction over such a dispute even though the defendant

had been served outside Alberta territory. The question before the Supreme

Conflict of Laws in Large-Scale Claims 399

3 See, for instance, note by Janet Walker, “Choice of Law in Tort: The Supreme Court of

Canada Enters the Fray” (1995) 111 L.Q.R. 397.

4Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077 [hereinafter Morguard].

5Hunt v. T&N plc, [1993] 4 S.C.R. 289 [hereinafter Hunt].

6Morguard,supra note 4.