Class actions are allowed in most Canadian provinces. Several recent developments, including application of lax certification procedures and the spread of third party litigation funding (TPLF), suggest that Canada is becoming even more hospitable to class actions.
Because TPLF is largely unregulated in Canada, courts addressing class action funding contracts have established piecemeal standards, creating inconsistency across cases. While judicial oversight is a legislative requirement in representative proceedings, non-representative proceedings where TPLF is also used, such as personal injury or commercial litigation, are not subject to judicial controls.
In July 2019, the Law Commission of Ontario (LCO) released a final report “Class Actions: Objectives, Experiences, and Reforms,” which suggested several concrete reforms. In response to the publication of the LCO report, the Ontario Attorney General announced that he would explore legislative class action reform and implement several of the reforms suggested by the LCO.
The Ontario Attorney General Doug Downey subsequently announced a legislative initiative to reform the Class Proceedings Act (CPA). In December 2019, Bill 161 was introduced in the Legislative Assembly of Ontario. The bill, dubbed “Smarter and Stronger Justice Act - 2020,” proposes several important changes to the CPA, including for example, stronger class certification; more efficient multi-jurisdiction case management; more safeguards regarding third party litigation funding; and improved right of appeal for defendants.” Bill 161 is currently pending in the Legislative Assembly.
ILR Support Letter for Ontario Bill 161 2.21.2020
Canadian courts see sharp rise in class action lawsuits (Business News Network, Lisa A. Rickard)
Class Actions in Canada: A Critical Commentary (D&O Diary)