Pre-certification motion can be efficient

Launching a pre-certification motion in a proposed class action is a tough nut to crack, but it can be worth the effort in certain circumstances and may also help to narrow the issues, say lawyers.

Pre-certification motion can be efficient
Paul Davis says that, recently, courts ‘have been open to dealing with some matters prior to certification where it can have the effect of actually increasing efficiency.’

Launching a pre-certification motion in a proposed class action is a tough nut to crack, but it can be worth the effort in certain circumstances and may also help to narrow the issues, say lawyers.

The law developed a presumption against any motions prior to certification several years ago, says Paul Davis, a class action lawyer with Paliare Roland Rosenberg Rothstein LLP in Toronto, who deals primarily with plaintiffs. However, he says, there’s been a shift and there is now some degree of openness on the part of case management judges in Ontario to hearing pre-certification motions.

“More recently, courts have been open to dealing with some matters prior to certification where it can have the effect of actually increasing efficiency. I think it can be helpful for both plaintiffs and defendants in a way because if there is an issue that can be resolved prior to certification . . . and can narrow the certification motion, then I think that efficiency can be of interest to both sides,” he says.

And while they are often viewed with a negative lens by plaintiff lawyers, Davis says they can be useful because of the potential to resolve some major legal issues prior to certification and provide some certainty.

Given the current focus and need for efficiencies in courts across the country, Paul-Erik Veel, a defence lawyer and partner with Lenczner Slaght Royce Smith Griffin LLP in Toronto, says pre-certification motions can play an important role in class actions that can take several years to wend their way to an ultimate conclusion.

“We are in a period of time where everyone is more cognizant of how long proceedings can take, including class actions,” he says. “Naturally, you’re going to want to try to figure out ways to speed that up.”

But defendants face a high threshold in persuading the court to allow a motion prior to certification, he says, pointing to Austin v. Bell Canada.

The proposed class action launched in January centred on the rate of indexation of Bell’s pension plan. The plaintiffs accused the employer of improper calculations that deprived them of their pension entitlements.

The defence was able to get to the Office for the Superintendent of Financial Institutions to agree to review the matter for possible resolution and then sought a motion to stay the class proceeding in favour of a determination by the OSFI, says Veel.

But the plaintiff successfully argued that the issue should be heard by the court as part of the certification hearing and not go straight to the OSFI, says Veel. He says there would have been no need for a certification motion had the defendants been allowed their motion to bring the case.

“If the defendant had been allowed to bring the motion, and even if they had lost it, that would have narrowed the issues for certification. Because it would mean that whole argument that would be part of the certify motion would be off the table,” he says.

The lesson resulting from the court’s refusal to allow the motion in Austin is that courts are going to be more active in screening the ability of parties on either side to bring certification motions and that there will be a fair deal of active case management, he says.

“I’m in favour of active case management to ensure things are done efficiently. I think courts have to make sure that they are not unduly limiting the abilities of parties to bring motions that can really either streamline or simplify issues in a case or end it entirely,” he says.

“The legal framework isn’t new. What I think this decision does reflect, though, is a more active philosophy of implementation of that framework and more active management to really scrutinize pre-certification motions.”

The judicial test for when pre-certification motions are appropriate was established in Cannon v. Funds for Canada Foundation and cited by Justice Benjamin Glustein in Austin, says Kevin O’Brien, a partner with Osler Hoskin & Harcourt LLP in Toronto.

That case determined that each case should be looked at individually, starting from the principal that certification should be the first procedural step unless there are circumstances where it’s useful and necessary to have a motion prior to the certification hearing, he says.

“They should be rare except there are some circumstances where it just makes a lot of sense to have a preliminary motion first,” says O’Brien.

The big takeaway, says O’Brien, is that the starting point for the courts is efficiency — judges don’t want to hear pre-certification motions unless they help substantially narrow or determine the issues that may need to be decided in certification or the action at large.

Pre-certification motions are worth considering, says Danielle Royal, commercial litigator and a partner with Stikeman Elliott LLP in Toronto.

The risk is that if one is bringing a motion before the class action is certified and a defined class is established, there is no order binding the class. On the other hand, a successful pre-certification motion may deter others from trying to certify a related class action, says Royal.

“I think they can be useful, particularly where, from a defendant’s perspective, the action is clearly not meritorious and they think that they can, on the merits, defend it. It sometimes makes strategic sense to try to have those motions heard in advance of certification or in the alternative . . . that they be heard at the same time,” she says.

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