The year 2024 was another noteworthy year for class actions in British Columbia. In this article, we provide an overview of key developments and trends from 2024, and areas to watch in 2025.
Key legal developments of 2024
1. Supreme Court of Canada confirms constitutionality of government-led class actions
The Supreme Court of Canada delivered a landmark class action ruling in November 2024, deeming British Columbia’s role as representative plaintiff for a class of provincial, territorial, and federal governments and agencies constitutional (see Sanis Health Inc. v British Columbia, 2024 SCC 40).
The B.C. government commenced the underlying action in 2018. The province sued 49 manufacturers, marketers, and distributers of opioid products for allegedly contributing to the opioid epidemic by falsely marketing opioids. British Columbia brought the action on behalf of a proposed class of all federal, provincial, and territorial governments and agencies that had paid healthcare, pharmaceutical, and treatment costs related to opioids.
After filing the action, the legislature of British Columbia enacted the Opioid Damages and Health Care Costs Recovery Act (ORA) to create a new statutory cause of action in the litigation. Section 11 of the ORA authorizes British Columbia to bring an action as representative plaintiff on behalf of the proposed government class.
In 2022, several of the defendants challenged s. 11 as ultra vires or “outside” the powers and authority of the British Columbia legislature. The defendants argued that s. 11 did not respect the constitution’s limits on provincial powers, and undermined the sovereignty of Canada’s other governments by making them passive class members. The B.C. Supreme Court held s.11 to be constitutional (see British Columbia v Apotex Inc., 2022 BCSC 2147.) This ruling was unanimously upheld by the B.C. Court of Appeal in 2023 (see Sandoz Canada Inc. v British Columbia, 2023 BCCA 306). The defendants were granted leave to appeal to the Supreme Court of Canada.
The Supreme Court of Canada dismissed the defendants’ appeal. The court held that the “pith and substance” or dominant characteristic of s.11 is not to usurp other province’s substantive rights, but to create a procedural mechanism to apply the ORA to the already existing opioid-related litigation. Section 11 of the ORA properly falls under the provincial powers to enact laws and regulations pertaining to the courts and civil procedure. Lastly, s. 11 does not constrain the other Canadian governments, as they could choose to opt out if they wish to pursue their own individual remedies.
The class action has since been certified by the B.C. Supreme Court (see British Columbia v Apotex Inc., 2025 BCSC 92).
Takeaway from the Supreme Court of Canada’s decision in Sanis
The Supreme Court of Canada’s decision moves Canada’s class action landscape into a new era. Where previously governmental health agencies were limited to secondary recovery through individual-led class actions, this decision could now embolden any province to seize the litigation reins and seek direct recovery from defendants, in the health sphere and beyond. Government representative plaintiffs are a different animal than individuals, with deeper pockets, and a distinct approach to litigation risk and recovery. They also carry the unique ability to legislate in or away causes of action, changing the playbook of how parties can respond to litigation.
2. Resident representative plaintiffs required for B.C.-based class actions
Section 2(1) of the B.C. Class Proceedings Act (CPA) states that “a resident of British Columbia who is a member of a class of persons may commence” a class action in British Columbia on behalf of that class. Despite this plain wording, MM v Excelsior Mining Corp, 2024 BCCA 163 was the first time the B.C. Court of Appeal was asked to interpret the meaning of the term “resident” for purposes of the CPA. In that decision, the Court of Appeal clarified the residency requirements for proposed representative plaintiffs, particularly corporate representative plaintiffs. The Court held that only corporate plaintiffs with “central management and control” in British Columbia have standing to act as representative plaintiffs.
The proposed representative plaintiff in Excelsior Mining was a Toronto-based mutual fund. The plaintiff fund alleged that the defendant failed to disclose problems experienced at one of its mines, which artificially inflated the price of its securities. The plaintiff fund sought damages for all persons who purchased the defendant’s securities under the prospectus.
The defendant successfully applied to strike the action prior to certification, on the basis that the plaintiff fund was not a resident of British Columbia pursuant to s. 2(1) of the CPA (see MM Fund v Excelsior Mining Corp., 2022 BCSC 1541). The plaintiff fund appealed.
The B.C. Court of Appeal upheld the lower court’s decision, deeming residency in British Columbia an essential element of acting as a representative plaintiff for both individuals and corporations. The Court of Appeal held that for a corporation or trust, residency is determined by where its central management and control takes place: simply put, where does the party carry on its “real business”?
The Court of Appeal distinguished “residency” from the varying common law concepts of “jurisdiction,” “presence,” and “carrying on business.” Although these concepts overlap, they are nonetheless distinct from the strict interpretation of “residency” under the CPA. The use of the latter in the CPA indicates the British Columbia legislature’s intention to limit the initiation of class actions only to members of the British Columbia public. While non-residents can passively “piggyback” onto these actions as members of a multi-jurisdictional class, the active role of representative plaintiff is reserved for British Columbians.
The Court of Appeal’s decision may seem obvious to anyone with class actions experience in British Columbia. However, this was a welcome clarification of the law, considering that British Columbia has become an increasingly popular destination for multi-jurisdictional class actions in recent years.
Top trends
1. Challenges arise out of changes to case management practice direction
In early 2024, Chief Justice Hinkson introduced amendments to Practice Direction 4 (PD-4), changing the procedure for requesting judicial case management in civil proceedings. Historically, class actions in British Columbia were automatically assigned judicial case management in recognition of their unique procedures, complex subject matter, extensively litigated issues, and propensity for delay. This ensured that a designated judge was assigned to supervise the day-to-day management of the action, including facilitating scheduling as well as hearing case management conferences and applications on an expedited basis, rather than through the general civil list.
Under the new PD-4, this is no longer the case. Instead, parties to a newly filed class action must now apply for case management like any other civil case, with no priority or preference.
This change added a hurdle to moving class action cases forward in 2024. Parties are now faced with an additional step, which can delay the timely progression of the action to certification and beyond. As complex, multi-party actions, class actions generally require judicial case management, and, as it was previously assigned as a matter of course, the additional application often delays the inevitable, and takes up judicial resources. There is also now the risk that applications for case management may be declined.
Going forward, parties should anticipate longer delays for the pre-certification stages of an action, the legal costs of the additional case management applications, and delays to their case, should judicial case management be denied.
2. Continued increase of class actions filed in British Columbia
The year 2024 saw another increase in the number of class actions filed in British Columbia. Per the CBA National Class Action Database, 63 new class actions were filed in B.C. in 2024, compared to 39 the previous year.3 Comparatively, Ontario saw a slight decrease in class actions filed, from 36 in 2023 to 30 in 2024.
In 2018, the British Columbia legislature made a variety of amendments to the CPA, changed how non-residents of British Columbia were included in class proceedings, and introduced rules for handling multi-jurisdictional proceedings. At that time, coupled with the no-costs regime, BLG correctly predicted these changes were likely to increase the number of class actions commenced in British Columbia. This has certainly occurred, and there is no indication that trend will subside as class counsel based in other provinces continue to shop for the best place to further their clients’ cases.
3. Bot bonanza: Rise of false claims in online settlement distribution
Settlement administrators in both Canada and the U.S. have sounded the alarm regarding false claims submitted by bots in 2024. A 2024 report from Western Alliance Settlement Services indicated the number of claims in U.S. class actions with significant indicia of fraud had jumped from 400,000 in 2021 to over 80 million in 2023, and with that increased expectations that the trend would continue through 2024.
The targets of fraud are typically settlements with low value claim payouts, which require no proof of purchase, and pay claimants digitally rather than by cheque. Historically, there was little concern of fraud in these types of settlements, as the low value of each payment was thought to disincentivize the effort needed to commit fraud. However, with the use of bots, a single person can flood a settlement administrator with thousands of false claims. Fraudulent claims harm defendants who unintentionally pay non-class members, and prove harmful to class members because false claims diminish the settlement pot for real claimants.
The risk of bots and fraudulent claims also increases the cost of settlement administration, as administrators must keep abreast of current technology to spot false claims. We expect that this trend will continue into 2025.
Areas to watch
- Increased plaintiff-side class action litigation by Canadian governments in the wake of the Sanis decision. Already, British Columbia has shown its willingness to act as a representative plaintiff in other actions, filing a proposed class action in June 2024 concerning the alleged release of toxic chemicals into Canadian drinking water (see HMTK v 3M Company et al., Court File Number S-244125).
- Whether the residency requirement for B.C. class action plaintiffs creates an obstacle for class counsel based in other provinces to pursue multi-jurisdictional proceedings in British Columbia.
- New legal developments in pre-certification applications, as defendants continue to favour applications to strike pleadings and jurisdictional challenges to eliminate class action threats early.
BLG can assist
For any questions about the topics and cases covered in this review, or to learn more about how BLG can advise you, please contact one of our Vancouver office Class Actions team members listed below.
