Bill 161, a Bill including a number of amendments to several Acts, received Royal Assent earlier this year and comes into force on October 1st. One of the Acts it amends is the Class Proceedings Act (CPA).
The overall goal of the amendments to the CPA is to make the class action process more efficient while at the same time potentially reducing the number of class proceedings in Ontario courts through changes to the requirements for certification. The resources, time and money used in these cases have been a growing concern for a number of years and the new structure appears to be aimed at increasing dismissals earlier in the process. This will be done by mandating a more thorough examination of the best means of resolving the dispute in question prior to certification.
The amendments to the CPA were in part inspired by a 2019 report prepared by the Law Commission of Ontario (LCO). Those recommendations included changes to the following processes:
- Administrative Dismissals;
- Fee approvals;
- Multi-Jurisdictional claims;
- Settlement approvals;
- Third-party financing;
- Timing of certification motions.
Below, we will review the key amendments coming into force later this week.
The New Tests for Certification
Section 5(1) of the CPA is amended to allow for certification in the normal course but with two new added requirements focussing on predominance and superiority.
- (1.1) In the case of a motion under section 2, a class proceeding is the preferable procedure for the resolution of common issues under clause (1) (d) only if, at a minimum,
- (a) it 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, including, as applicable, a quasi-judicial or administrative proceeding, the case management of individual claims in a civil proceeding, or any remedial scheme or program outside of a proceeding; and
- (b) the questions of fact or law common to the class members predominate over any questions affecting only individual class members.
All class proceedings in Ontario are governed by the amendments whenever commenced. This may result in defendants renewing their attacks on existing class actions.
Competing class actions are now restricted and must be commenced within 60 days of the first such action. Any carriage motions must be commenced within 60 days of the first action.
Financing by Third Parties
All agreements entered into by plaintiffs with a third party to cover or contribute to the costs of initiating a class action must be approved by the court and satisfy the following factors:
- The agreement is fair and reasonable;
- The agreement allows the representative plaintiff to instruct counsel and control the litigation;
- The financier can pay any adverse cost award;
- The agreement meets any other prescribed requirements.
The plaintiff must initially pay the costs of providing notice following certification but may seek to recover that cost if ultimately successful.
Plaintiffs must now register their class proceeding as per provincial regulations. This will most likely lead to a province-wide database of such actions.
Permitting meritless cases to be shut down earlier
The court will be required to hear motions that may dispose of all or part of the proceeding, or narrow the issues to be determined or evidence to be adduced, before the certification motion or simultaneously with the certification motion.
If the following has not occurred within one year of the plaintiff issuing the claim, the case is to be dismissed:
- Filing and serving a motion for certification;
- The parties have not agreed on a timetable;
- Any other steps required by regulations.
Contribution & Indemnity Claims
Any claim for such relief by a plaintiff in a class proceeding will suspend the defendant’s limitation period to also claim such relief over until the time to appeal a certification order, or an appeal from such an order has expired or been heard.
Now both plaintiffs and defendants will have the right to appeal a decision on certification to the Ontario Court of Appeal (ONCA) and plaintiffs will not be allowed to alter materially the structure of their commenced class action.
A report must now be filed by the administrator no more than 60 days after the settlement monies are fully distributed. The required content of the report is set out in the regulations.
Further, if there exist other similar actions commenced in other provinces involving the same, or similar subject matter as well as some, or all, of the same class members, the certification judge must then determine which proceeding is most beneficial to the class members and direct their claims to be resolved in that proceeding.
At Milosevic & Associates, our team of Toronto corporate commercial lawyers regularly represent clients in complex commercial litigation matters ranging from straightforward contract and partnership disputes to complex multi-party commercial claims including class action litigation. Over the years, our team of exceptional litigators has seen it all and has successfully fought for our clients’ rights. Our impressive track record speaks for itself. Call us at 416-916-1387 or contact us online for a consultation.