As the widespread effects of the COVID-19 pandemic continue to be felt across Canada, even as some restrictions are starting to lift in each province, legal experts and courts alike are bracing themselves for a surge of class proceedings. A recent article by the CBC points to the fact legal trends in Canada tend to follow our neighbours to the south, where nearly 200 class action suits, and over 700 individual claims, related to COVID-19 had been filed by the end of April.
As explained by Jasminka Kalajdzic, an associate law professor at the University of Windsor and director of the Class Action Clinic, the increase in claims stemming from the health crisis is not unexpected:
Any time there is mass harm, lots of people suffering financially, physically, they’re looking to hold people accountable, entities accountable…Whether any of these, most of these, cases are going to be successful is a big question.
Common Class Proceeding Trends Emerging From COVID-19
In the United States, there are trends demonstrating that certain industries are more likely to face class proceedings than others. The most common industries so far include:
- Long-term care facilities, nursing homes and operators, which have been the location of a number of particularly devastating virus outbreaks in the U.S. and in Canada, where class actions are also underway.
- Insurance companies, particularly with respect to the denial of claims related to the pandemic, such as business interruption insurance, as we’ve discussed in a previous blog.
- Cruise operators, for negligence in handling the outbreak which resulted in thousands of people being stranded at sea for weeks on end.
- Airlines and schools, for failure to refund tickets or tuition once services were cancelled or drastically reduced.
- Online retailers, for price gouging on high-demand items such as cleaning supplies, masks, gloves and hand sanitizer.
Class proceedings have already begun in Canada against a prominent national operator of long-term care facilities, in addition to separate actions targeting Canadian airlines and insurance companies.
Defending COVID-19 Class Proceedings
Many industries facing class actions are likely to argue that they acted reasonably under the circumstances. Whether this will be sufficient to avoid liability will be dependent on the circumstances of each case. Some businesses, such as insurers, are likely to invoke the concept of “force majeure“, or Act of God, to say that the pandemic was an extraordinary circumstance that could not have been foreseen, and as a result, they are absolved of their responsibilities under individual insurance contracts.
Some industries in the U.S. are already looking to the state and federal governments for indemnity against the expected surge in litigation related to the coronavirus.
Individual Claims vs. Class Proceedings
For plaintiffs seeking damages in actions stemming from COVID-19, there will be two paths to choose from: a class proceeding or pursuing an individual claim. Each path has certain advantages and disadvantages, and so obtaining advice from an experienced civil litigator is the best way to know how to proceed.
Class proceedings allow several claimants to band together and pursue a single claim, which has the benefit of reducing the cost and time associated with litigation for each individual claimant. For claimants with limited resources, in particular, this can be an excellent option. Class proceedings are by nature limited to issues affecting a large number of people, and usually millions of dollars in damages are at stake. The disadvantages associated with class actions are that they may take longer, as plaintiffs must be identified and added to the class, and the proceedings need to be certified by a court, both of which can take time. Further, the claimants will ultimately share the damages awarded, which may result in a smaller per claimant amount than each could have received in an individual action.
Individual actions allow a claimant to be in full control of their action, including how it is pursued, and which damages are sought. This path may also be more expedient, and result in a larger award. However, the claimant must then bear the full cost of the litigation, and the process will require more personal involvement and time.
Ultimately, the best path forward will be determined by the number of potential plaintiffs, the scope of the potential damages, and a host of other factors. If you are considering pursuing a civil action related to COVID-19, we strongly advise that you consult with a lawyer as soon as possible to discuss your options and determine which type of proceeding would best suit your matter.
If you are involved in civil litigation resulting from the effects of COVID-19 or expect to be, the exceptionally skilled corporate litigation lawyers at Milosevic Fiske LLP in Toronto can help. Over the years, our team of lawyers has successfully fought for our clients’ rights and our impressive track record speaks for itself. Please contact us by calling 416-916-1387 or connect with us online for a consultation.