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Technology, legislation impacting class action vs mass tort debate in Canada

As for Canadian Lawyer

They’re different tools in the toolbox — but they need to be applied to the right cases

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The last few years have seen a debate arise among Canadian tort law firms on whether to maintain the traditional class action approach in Canada or to move towards more of an American model.

Russ Howe, a senior litigator at Preszler Injury Lawyers, says there’s a place for both approaches — “They’re different tools in the toolbox but they need to be applied to the right cases,” he notes — and between the technology, the economics and the legislation “it’s created a revolution in our industry.”

Class actions have traditionally been the preferred vehicle in Canada for large, multi-plaintiff personal injury tort cases while the United States relies on mass tort. Class actions are favoured north of the border because of structural factors such as a lower commonality threshold and a lack of a formal coordinating mechanism like our neighbours to the south have developed in Multi-District Litigation (MDL).

But Sabrina Lombardi, partner in the class action litigation group at McKenzie Lake Lawyers, says in the US it’s not so much a matter of preference for the mass tort, it’s sometimes a matter of necessity because of a concept called preemption in the US “that essentially doesn’t allow injured people to pursue, say, medical device makers or drug companies via class action.”

“Those cases have to wind their way through a more typical litigation process and then, of course, the MDL procedure is the more sensible way of bringing those individual cases together,” she says. “We don’t have that constitutional impediment of preemption in Canada and that’s why the class action works in Canada in terms of pursuing medical and pharmaceutical cases.”

Adding to the conversation are changes to Ontario’s Class Proceedings Act, which means its certification test now includes “the two things that were part of the class action mechanism in the US that made the US class action less favourable and gave rise to more mass torts: predominance and superiority,” Lombardi says.

The predominance requirement states that the common question must predominate over any remaining individual issues of class members, where previously it was only required to show they were important and meaningful in terms of moving the individual’s claim forward. The superiority requirement means the court must be satisfied that the class action is “. . . superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant . . .” according to the Act. Lombardi notes that only Ontario that has amended its legislation to this effect to date.

“It will be interesting to see what comes of that change and whether or not the class action will remain the preferred proceeding in Canada over some kind of mass tort proceeding,” she says, adding in the short term she predicts fewer proceedings out of Ontario on a national basis because the other jurisdictions can cover an action and have a national scope “without having to test the new threshold for certification of superiority and predominance.”

Though both approaches are used when a large number of people are harmed by the same product, when there’s a wide range of issues arising among the group it can be difficult to satisfy the commonality requirement for certification of class actions. The mass tort approach protects against “cookie cutter justice,” Howe says, noting Preszler Injury Lawyers prefers mass tort litigation because the personal injury work they do “doesn’t suit itself well to class actions, as each individual is harmed differently.”

In a class action the individual aspects tend to take a back seat to the common questions, so the uniqueness of some of the claimants’ damages can get lost. One of the other challenges is people’s rights get extinguished when the class action is settled so if a victim doesn’t know about it, they get nothing and can’t do anything about it, Howe adds.

“In my view, mass tort for certain kinds of cases is the far better tool because the individual claimant doesn’t become a number — they still each have an individual case and right to trial, but the common issues are better handled,” he says, calling it the best of both worlds. Both Lombardi and Howe agree that Canada needs something akin to the MDL in the US. As it stands in Canada, there are too many unknowns when it comes to the mass tort litigation process to make it a viable option broadly, says Lombardi, though there are some “real benefits” to the model.

“Without some kind of overarching system in place that says this is how it’s going to get done, these are the advantages, this is the process — without that administrative component it can be a lot more risky because it’s harder to manage,” she says. “I hope we get precedent from the court, guidance from the judiciary or even legislation setting out a process for the management of mass tort litigation, because it’s a viable and important alternative way to bring certain cases forward.”

That said, except for exceptional circumstances, Lombardi still sees the class action as the preferable way of moving groups of claims together in one proceeding.

Howe, however, points out “we’ve been doing the class action thing for a while, and from my perspective some of that has wandered into fields where it really shouldn’t.” While class action firms now have very efficient systems to create and launch this type of litigation, “sometimes they’re the wrong tool for the job but once you’re geared up for class actions it’s like having a hammer — everything looks like a nail.”

At the end of the day, Howe calls himself an optimist. He’s following various studies that are examining whether or not class actions are delivering the access to justice results Canada wants.

“I hope the government — who really seems focused on studying this — will keep looking very closely at the class action legislation and class action space and continue to enhance the system.

Original Article: Canadian Lawyer

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