Law Commission report on class actions indicates widespread frustration with slothful court system
The Law Commission of Ontario recently released a report evaluating the effectiveness of the Class Proceedings Act and found that delays are plaguing the process.
“The biggest problem in litigation, both personal injury and class action, is delay,” says Darcy Merkur, a personal injury lawyer and partner at Thomson Rogers Lawyers in Toronto.
Delays are a problem in class actions according to “virtually everyone” the LCO consulted, said the report. The LCO recommends a one-year deadline for scheduling certification motion and filing plaintiff motion material, an automatic dismissal and costs provision for plaintiff firms that waste time, amendments to enhance court case-management authority and other measures to improve case management.
Delays are a problem that span all practice areas, require judicial resources and, Merkur says, speeding up certification is just chapter one of the process.
“Now all that's good. It doesn't solve the problem of realistically having to tell a representative plaintiff that you can realistically expect a defendant who wants to delay and dispute everything — it'll take us eight to 10 years to get in front of a judge with authority to make some decisions on the merits.”
The LCO’s feedback also indicated Ontario’s carriage determination system was “inefficient and unpredictable,” said the report. The LCO suggested creating “a dedicated process and timetable” for carriage determination.
The effectiveness of class actions in delivering justice in a timely, inexpensive manner is also hampered by borders. Stakeholders told the LCO that multi-jurisdictional class actions “raise extraordinary challenges” and the act does not adequately instruct how to handle overlapping claims. Harmonization is needed, and the LCO calls on all levels of government to establish a national protocol and uniform rules, said the report.
“Certification is the most controversial and partisan class-action issue,” states the report.
Seventy three per cent of contested certification motions are successful, according to the LCO’s estimate. Although those on the other side thought that percentage shows plaintiffs are being favoured, the LCO looked at procedure and fairness and alternatives to the current certification test and concluded that no “major reforms to the statutory or evidential test” were warranted. The LCO would, however, “encourage” the courts to apply the s. 5 certification test “more rigorously” and to “support/endorse pre-certification summary judgment motions or motions to strike if such a motion will dispose of the action, or narrow issues to be determined or evidence to be filed at certification,” states the report.
The LCO heard from its consultation that the settlement approval process needs improvement and recommended amending the act to include requirements such as a “full and frank” disclosure, giving the courts authority to appoint amicus curiae, as well as adding other provisions concerning settlement distribution.
The LCO states that there is misguided public cynicism about lawyer fees in class action because of the disparity between individual recovery and the legal bill. The LCO said the results achieved and the risk assumed are the “main factors” that should be scrutinized when fees are approved and courts should evaluate and adjust fees when necessary.
Stakeholders told the LCO they’ve seen a rise in cost orders recently, which creates an access-to-justice issue.
“Ontario maintains the usual two-way costs rule in class actions, as it does for other civil litigation. The issue of costs is a divisive topic where opinions fall largely on partisan lines. Plaintiff stakeholders favour the no-cost approach of B.C., Manitoba, Newfoundland and the Federal Court; defence stakeholders are strongly in favour of the two-way cost rule,” states the report.
The LCO’s position is a “modified no-costs system.” Certification and all supplementary motions would be under a no-cost regime, while every other proceeding would be subject to two-way costs.
The two-year study that analyzed how class actions affected access to justice, judicial economy and behaviour modification shows that, during the lifetime of the 27-year-old act, class actions have “grown significantly in volume, complexity and impact in Ontario and across Canada.” Between 1993 and 2018, there were approximately 1,500 class actions filed in Ontario, said the report. The LCO sought answers to whether the act reflects contemporary class actions issues and practice, priorities in Ontario’s justice system and public administration. The LCO took input from litigators, judges, plaintiffs, NGOs, government, court administrators, academia and claims administrators in Canada, the U.S. and Australia.