Recovery of Individual and Aggregate Damages in Class Actions

• Author: Harvey T. Strosberg, Q.C., William V. Sasso, and Jacqueline A. Horvat
• Pages: 379-418



RecoveryofIndividualand

AggregateDamagesin

Class Actions

Harvey T. Strosberg, Q.C., William V. Sasso,

and Jacqueline A. Horvat

A. INTRODUCTION

On Saturday November  several railwayta nkers containing

chlorine propaneand other ammable chemicals derailed in Missis-

saugafollowed by an explosiona ndr eDue to the danger posed by

thegasapproximatelypeoplewereevacuatedfromMississauga

shortlyt hereaerfor six daysT hed isruption damagesand losses to

businesses andpersonallives weresign icantW hilet hiswas the lar-

gestevacuation in Canadian historytrain derailments are notunique

InAugustafreighttrainderailednearMexico Cityreleasingover

gallonsofchlorinegasthatpoisonedthousandsandkilledtwenty

eightpersons

TheRe port on Class Actionsbythe Ontario LawReform Com-

mission Commissionthatrecommended thereformsthatlaterfound

their way into the Class Proceedings Act cites these t rain derail-

mentsasexamplesofcasesthati llustratethedecienciesintheproced-

 HarveyTStrosbergQCandWillia mVSassoarebothpartner sofSusStros-

bergLLPSincereappreciationisextendedtoJacquel ineAHorvatanassoc iate

partnerofSusStro sbergLLPandKarenPetersonfortheiri nvaluableassistance

inthepreparationoft hispaper

 OntarioLawReformComm issionReport o n Class ActionsTorontoMinistryoft he

AorneyGeneralCommissionReport

 Class Proceedings Act SOcCPA

HSWVSJAH

uresthenavailabletodeal witha llegedmasswrongswherea rising

outof t he same act or similar acts a number of individuals had su f-

feredinju ryor damage totheir persons or propertyThe Commission

observedt hata class actions eeking damagesthat required individual

assessment wouldnot bepos sibleunder Ontario lawi nrespec tof the

Mississauga train derailment The Commission fu rther observed that

evenifaprocedurecouldbefoundinwhic htoobtaindeclaratoryrelief

toestabli shis suesof liabil ityarising out oft hederail mentsuccess in

thatdeclaratoryprocedurewouldbebutapreludetonumerousfurther

proceedings because Ontar iol awwould requir e each person aected

bythe liability so determined int hedeclaratory judgmentto establish

inseparateproceedingssuchindividualissuesasiwhethertheperson

twithin thecategoryof reasonablyforeseeableplai ntistowhom the

defendantsowedadutyofcareiiwhetherthedamagessoughtbythat

personwerenottoo remoteandwere recoverableatlawaswellas iii

theassessmentofthat personsdamagestoperson andpropertyin or-

dertoobtainajudgmentformonetaryrelief

Theprincipalrea sonthatrepresentativeorclassproceedi ngscould

notbe broughtin situations like the Mississaugat rainderailmentwas

becausetheort hodoxandprevailinginterpretat ionoftherulet hatper-

miedrepresentative orcla ssact ionsprohibited their usewhere dam-

ages were claimed It was the legal requirement to prove individual

damagesforperson alinjur iesorpropert ythat precludedanyprospec t

ofthesuccessfulinstitutionofaclassactiontodealwiththeMississauga

trainderailmentoranyothermasstortorothermasswrongcas e

Theoldmaximi subijusibi remediumthereis noright withouta

remedyThetensofthousandsofM ississaugaresidentsandbusine sses

whose losses or damages did not justify the expe nse of independent

litigationwerewithouta legalremedyto vindicatethei rrightsT here-

mainingthous andsofresidentswhobelievedthattheexpe nsesofindi-

vidualclaimswerejustiedburdenedtheciviljusticesystemwiththeir

damageclaimseachofwhicharoseoutofthesamei ncident

New remedial massremedy machinery was needed to provide

meaningful remed ies in the masswrong situation where arising out

ofthesa meactor similarac tsanumber ofindividuals sueredinjur y

ordamageto their personor propertyWewilldealin this paperwith

ithe historical treatment of damage claims that led to the class pro-

ceedingsreformsiitherationaleforandtheproceduralchangesintro-

ducedbytheCPAtoachievethemajorgoalsofclassproceedingsreform

 CommissionReports upranoteat 

Recovery of Individual and Aggregate Damages in Class Actions

judicialeconomyimprovedaccess tojust iceand behaviourmodica-

tiontoprovidebothaggregateandindividualremediesinmasswrong

situationsiiithemannerinwhicht hecourtshaveinterpretedandap-

pliedthe CPA provisions dealing with the treatment of aggregatea nd

individual damages in class actions a ndiv our observations on the

anticipated future use of class proce edings to achieve remedies both

aggregateand individual for those aected in the same and dierent

waysbymasswrongs

B HISTORICALTREATMENTOF

REPRESENTATIVE OR CLASS

ACTIONS FOR DAMAGES

The representativeor class act ionmay be traced back tot hec ourts of

equityi nthe earlypart oft heeighteenth centuryIn contrast tocourts

ofl awcourts of equity adopted a broad stance in dispute resolution

Courtsofequitysoughttoavoidmultiplicityofproceedingsbyadhering

tothe general rule thatallper sonsmateria llyinterested in the subject

maerofasuitaretobemadepartiestoithowevernumeroustheymay

beWhenitbecameevidentthatstrictadherencetothisgeneralinclusive

rulecou ldgive rise toinjust icethe courts ofe quityre sortedto repre-

sentativeorclass actionstop ermitoneperson tobring asuitonb ehalf

ofall personsmateria llyinterested eitherlegally orbeneciallyin the

subjectmaerofthesuit

Theseprocedures didnotapplytodamagecla imsDamagesbeing

acommonlawremedyweredealtwithinthecou rtsoflawratherth an

equityandthereforewerenotanavailableremedyinanactionbrought

inclassforminthecou rtsofequity

Themergeroft hecommonlawcourt sandcourtsofequity inEng-

landandOntario tookplaceinthelaerpar tofthenineteenthcentur y

Themerger resulted ina single set ofprocedural rules fort hemerged

courtInO ntariotheru lescheduledtot heOntario Judicature Act 

thatdealt with representativeor class actions wasidentical totherule

 CommissionReportibidatJoh nAKazanjianCla ssActionsinCa nada

OsgoodeHallLJWesternCanadianShoppingCentre sIncvDuon

SCRatWestern Canadian

 Victc