Recipe for Reform: A Proposal for Improving Canadian Class Action Procedures

October 24, 2017

In recent years, class action litigation in Canada has become commonplace, growing or threatening to grow in frequency in many areas of law, resulting in an increasingly favorable environment for class actions and many substantial and high profile settlements.

While many accept that class actions can be an appropriate procedural vehicle in some cases, many aspects of the class actions regime, including low certification standards, asymmetrical certification appeal rights, a sometimes unbalanced application of the loser pays costs regime, and the increasing availability of third party litigation funding, raise questions about whether class actions fairly achieve access to justice.

To review whether class actions, and more specifically the Ontario Class Proceedings Act of 1992, are working as intended, the Law Commission of Ontario (LCO) is undertaking a project entitled “Class Actions: Objectives, Experience and Reforms.” To contribute to this project, ILR’s paper describes in detail, specific reforms that are needed to achieve a fair and balanced class action litigation system.  

While these recommended reforms focus on the Ontario Class Proceedings Act, they are equally warranted in other provinces with similar provisions in their class action legislation. The recommended reforms are as follows:

  1. Add a merits assessment as a criterion for class certification.
  2. Require plaintiffs to demonstrate by evidentiary proof that the criteria have been met on a balance of probabilities.
  3. Require judges to consider management of individual cases instead of certifying a class action where the number of potential claimants is small.
  4. Establish symmetrical appeal rights.
  5. Preclude plaintiffs from amending class definitions and common issues on appeal.
  6. Adopt provisions to address overlapping class proceedings in multiple provinces.
  7. Require that by default the costs of notice of certification be borne by the plaintiff.
  8. Codify transparency and other requirements for third party litigation funding.
  9. Provide that tolling of limitation period commences only when the claim is certified, but is retroactive to the date the claim commenced.
  10. Toll limitation periods for defendants’ contribution and indemnity claims from the date the class members’ claims are tolled until the date when the identities of class members can be discovered.
  11. Provide for automatic dismissal of class proceedings for want of prosecution.
  12. Permit defendants to make offers to settle the claims of a sub-group of class members at any time post-certification.