Because the U.S. and Canada are close enough geographically and economically that many companies consider the two countries to form a single, integrated market, a claim in the U.S. typically also results in a claim in Canada. Canada is seen as a hospitable environment for class actions, and increasingly for conventional actions in concert with or in competition with class actions (often known as mass torts) as well.

Class Actions in Canada

Class actions are permissible in Canada under provincial laws: Quebec was the first to enact legislation in 1978, and by 2008 nine provinces (Prince Edward Island is the exception) had activated class action legislation. For defendants, the attraction of class proceedings has been the promise of a release for all claims. There are downsides, however. Class actions can be prohibitively expensive, the time associated with the certification process is typically long and there is substantial uncertainty surrounding trial risks due to the very small number of cases that have actually been litigated through on the merits. The fact that settlement of a certified class action is not always a palatable alternative is a potential downside, as is the fact that settlements often involve theoretical recognition of class members who may not be at all injured — or who do not "take up" the settlement — leaving significant amounts of unused settlement funds to be redistributed in some other way.

The other disadvantage of defending class actions in Canada — and this often surprises U.S. counsel — is the relatively low threshold for class certification as Canadian courts typically require just a single common material issue. Additionally, some of the more important hurdles for certification in the U.S., such as the requirement that common issues of fact or law predominate over individual issues and the concept of typicality, do not apply under Canadian law. Canadian courts also are buttressed by expansive jurisdiction rules and will certify classes in personal injury cases, which U.S. courts typically do not do. (Note: This topic was covered extensively in BLG's 2013 American Lawyer article, "Defending Class Actions in Canada".

Once a class is certified, U.S. counsel can be faced with the realization that, due to its constitutional structure, Canada does not have MDL (multi-district litigation) or similar organizing legislation. Courts of provinces and territories and different judges show varying inclinations to collaborate on parallel class actions, and there's no process for consolidating the classes for a single, nationwide case.

By way of example, the ongoing pelvic mesh litigation, O'Brien v. Bard Canada Inc.,1 is being handled as multidistrict litigation in the U.S. but is proceeding as a class action in Canada. While to date there has already been one consent certification in a surgical mesh case in Canada, Harper v. American Medical Systems Canada Inc.,2 the judge in Bard did not certify the class. While he did invite a reconsideration of the motion, he is hinting at alternatives to class proceeding for mass tort cases in Ontario. This is consistent with a developing trend in Canada toward bringing conventional actions for an inventory of cases, similar to how mass torts are handled in the United States, albeit still without the benefit of the organizing legislation.

The trend is significant enough that class action settlements now frequently include an "opt-out" threshold above which the settlement can be dissolved because its preclusive effects would no longer be achieved and the advantages of certification for the defendant would have been lost.

The "Mass Tort" Alternative to Class Actions

The developing strategy of bringing conventional actions as mass torts began in part as an initiative by plaintiffs' counsel who had lost hard-fought carriage battles and were looking for a way to keep control of the plaintiffs they had recruited and/or retain a prominent place on the plaintiffs' counsel team. If a putative class member suffered a significant enough financial loss, these attorneys realized, the case might still be large enough to litigate individually.

Indeed, some argue that these larger claims should not be the subject of class actions at all because the most complex elements are individual causation and damages, both of which must be decided individually in any event. It is worth noting that class action legislation in Canada was supported by three policy objectives: access to justice, judicial efficiency and behaviour modification. The legislation's objective was to develop a means through which claims that were too small to litigate economically could be brought before courts and combined, providing access to justice for these claimants and modification of behaviour for defendants that otherwise wouldn't have to face these smaller claims. Larger cases do not require class action status to meet these policy objectives. They may instead be thwarted by aggregation.

Mass Torts as a Strategy for Plaintiffs

A mass tort approach has some distinct advantages for plaintiff's counsel. Some do not have the financial resources to fight long, drawn-out carriage or certification battles or provide indemnities against legal cost awards levied on their clients if they are unsuccessful. Avoiding a lengthy certification battle also allows cases to move to the discovery phase sooner, where the need to produce documents and witnesses for depositions places pressure on defendants that can lead to a favourable settlement. In many instances, a matter handled individually can reach resolution faster than it might take simply to get a class to the starting gate of certification.

Plaintiffs' counsel who go the conventional route also have the advantage of only needing to represent the known persons who enter retainer agreements with them. They don't require the court-ordered franchise to represent unknown members of the class. Finally, plaintiffs' counsel can use their existing skills and familiarity with conventional litigation, thereby avoiding the barrier that might be presented by a lack of prior class action experience. However, while there are many instances where a conventional approach is beneficial to plaintiffs, it can be also be beneficial for defendants.

Mass Torts as Defence Strategy

While it would seem that anything that benefits plaintiffs would be detrimental for defendants, there are a number of reasons why a mass tort approach may actually be preferred by the defence. For starters, it can be quicker and less expensive. A mass tort approach typically will garner much less publicity than a class action, which can be especially valuable if the product in question is still on the market. (A class action, on the other hand, closes the book on all potential claims in that province and likely makes more sense for products that are no longer marketed.)

Dealing with the real issues in a case early on can be difficult in the context of a class action, but a mass tort approach allows defendants to focus principally on the issues that most affect exposure (e.g., causation, damages) as presented by the claimants, which can be highly individualized. These issues often are paid little attention by courts during the push to certification.

Be aware that Canadian plaintiffs' class action firms typically have close relationships with plaintiffs' counsel in the United States, and Canadian matters often are simply copies of actions in the U.S. Through these relationships, Canadian counsel are likely to receive pleadings, expert reports and sometimes deposition transcripts with "heat-and-serve" instructions. What begins in the U.S. as an MDL procedure may, however, be converted to a proposed class action (at least initially) in Canada due to its certification-friendly jurisprudence. The big question is when and how to shift away from a traditional certification route and toward the less structured alternative, which is currently still a lawyer-generated, grassroots initiative.

Conclusion

In planning a class action/mass tort strategy, it is most useful to remember that the landscape continues to change and many of these developments are driven by the entrepreneurial nature of plaintiff's counsel. The U.S. Supreme Court has heard two major cases in the past four years that have changed class actions considerably. In AT&T Mobility v. Concepcion,3 the court ruled that arbitration agreements can, in fact, require consumers to bring claims only in individual arbitrations, reducing access to classes by consumers. And in Wal-Mart v. Dukes,4 the court made it more difficult for classes to demonstrate commonality, making it harder to gain certification. In Canada, the oldest class action laws are Ontario's; they are however only 30 years old and are again under review.

Class actions in Canada currently remain certification-friendly and inhospitable to the real issues that often drive mass tort claims. In the right cases, the development of mass tort work-arounds may be to the mutual advantage of both plaintiffs and defendant companies. The relationship between class actions and mass torts is evolving and as it does, strategies for managing copycat litigation "north of the border" will evolve in response. Staying abreast of these developments is imperative and it is critical to keep informed and adaptable to the most appropriate strategy for the situation, in order never to be caught off guard.


1 O'BRIEN V. BARD CANADA INC., 2015 ONSC 2470

2 HARPER V. AMERICAN MEDICAL SYSTEMS CANADA INC., 2015 ONSC 3434

3 131 S. CT. 1740 (2011)

4 131 S. CT. 2541 (2011)

Author

Tim Buckley 
TBuckley@blg.com
416.367.6169

Other Author

Cheryl M. Woodin

Expertise

Litigation and Arbitration
Class Actions