The Problem with Preferable Procedure

AuthorDawn Robertson
Pages193-216
193
THE PROBLEM WITH PREFERABLE
PROCEDURE
Dawn Robertson1
A. INTRODUCTION
Certification has become the major battleground in class action regimes
in Canada.2 Plaintiffs must satisfy a series of requirements to have their
case certified before it can be adjudicated through the specialized proce-
dures reserved for large scale claims. Plaintiffs and defendants will spend
a significant portion of their resources on the certification motion as the
outcome of the motion can be a significant factor in the final resolution of
the case. For plaintiffs, a certification order results in a strong bargaining
position in settlement negotiations with the defendant or the opportunity
to have their claim heard in court. For defendants, a failed certification
motion means that there is a good chance the claim will disappear.
If certification is the major battleground, the preferable procedure test
is the most important skirmish in that battle. A prerequisite under both
the Ontario Class Proceedings Act, 19923 and the British Columbia Class
Proceedings Act,4 the preferable procedure test requires courts to consider
whether a class action is the preferable procedure for resolving the com-
mon issues in the dispute. Preferability has become “the principal analyti-
cal threshold for class actions.”5 It is “very often the most contentious and
difficult [question] that arise[s] on a motion for certification.”6
The definition of the preferable procedure test (or other similar tests)
has been the subject of debate in many jurisdictions. In this paper, I will
1 Dawn Robertson will receive her LL.B. from Osgoode Hall Law School in May
2006. She will article at Fasken Martineau DuMoulin LLP in Toronto.
2 Garry D. Watson, “Class Actions: The Canadian Experience” (2001) 11 Duke J.
Comp. & Int’l L. 269 at 279.
3 S.O. 1992, c. 6 [Ontario CPA].
4 R.S.B.C. 1996, c. 50 [B.C. CPA].
5 Craig Jones, Theory of Class Actions (Toronto: Irwin Law, 2003) c. 7.
6 Cloud v. Canada (Attorney General) (2003), 65 O.R. (3d) 492 at 512 (Div. Ct.)
[Cloud].
194 THE CANADIAN CLASS ACTION REVIEW
explore the roots of the preferable procedure test, consider the recent for-
mulations of the test in Ontario and British Columbia, and evaluate the
appropriateness of the test both practically in the battle for certification
and analytically in support of the values of the class proceedings regime.
Case law shows that the preferability test in both Ontario and British
Columbia is suffering from the same pitfalls as its counterpart in the U.S.
The test is open to too much discretion, meaning that class actions are
being denied for the wrong reasons, sometimes even where there is no
other option available for the resolution of the class members’ claims.
Instead of serving the underlying goals of class actions, the test has
become a tool for defendants to defeat certification motions. Although
some of the most recent cases suggest that the courts are beginning to
recognize this failure, significant action by the courts or the legislature is
needed to remedy the situation.
B. THE ORIGINS OF PREFERABLE
PROCEDURE
1) Rule 23 of the U.S. Federal Rules of Civil Procedure
In 1982, the Ontario Law Reform Commission’s Report on Class Actions
set out a proposal for a comprehensive class proceedings statute.7 The
OLRC Report drew heavily from U.S. experience with Rule 23 of the
Federal Rules of Civil Procedure.8 Rule 23 has been in place since 1966;
accordingly, its provisions have undergone significant application and
interpretation and the success of the procedural scheme has been the
subject of assessment.
Under Rule 23, a representative action can become a class action
when it meets all four of the requirements in section 23(a) and at least
one of the requirements in section 23(b). Of the options in section 23(b),
the third option contains what are known as the predominance and supe-
riority tests:
23(b) Class Actions Maintainable
An action may be maintained as a class action if the prerequisites of
subdivision (a) are satisfied, and in addition …
7 Ontario Law Reform Commission, Report on Class Actions (Toronto: Ministry of
the Attorney General, 1982) [OLRC Report].
8 Fed. R. Civ. P. 23 [Rule 23].

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