← All Posts

Class actions become tougher to resist

Two recent appellate decisions make it harder for companies to resist certification of class action lawsuits.

A critical threshold for claimants wishing to bring class proceedings is the need to demonstrate that there be sufficient “common issues” amongst them to appreciably advance the case, and that the class action must be the best mechanism for doing that.    The BC legislation requires that “a class proceeding … be the preferable procedure for the fair and efficient resolution of the common issues”: Class Proceedings Act, R.S.B.C. 1996, c. 50, s. 4(1)(d).

The characterization of the common issues and the existence of different issues among claimants have, in past, often posed insurmountable complexity for plaintiffs seeking class certification.  Common issues were described by the Supreme Court of Canada in Hollick v. Toronto (City), 2001 SCC 68: “[A]n issue will be common “only where its resolution is necessary to the resolution of each class members’ claim” … Further, an issue will not be “common” in the requisite sense unless the issue is a “substantial…ingredient” of each class members’ claims.”

In the first case, franchisees of Quizno’s Canada Restaurants Corp allege that they were charged exorbitant prices for mandatory product in breach of their franchise agreements and of anti-competition and price-fixing laws: 2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corp., 2010 ONCA 466. Ontario’s Court of Appeal held that although franchisees’ individual damage calculations might be impossible to calculate at a group level, it made sense first to resolve the common issues and then, if appropriate, the individual claims could be quantified independently.   The overriding consideration in certifying the class was to ensure individual franchise operators could access justice through their numerical strength where individually the case might not have been tenable.   “I am … of the view that a class proceeding in this case will satisfy at least two of the objectives of the Class Proceedings Act of judicial economy and access to justice.  It seems to me that this case involving a dispute between a franchisor and several hundred franchisees is exactly the kind of case for a class proceeding”:  per Justice Robert Armstrong for the Ontario court.

Similarly, B.C.’s appeal court recently allowed a class of sperm bank donors to sue University of British Columbia over compromised sperm when the UBC freezer shut down without triggering any alarms: Lam v U.B.C., 2010 BCCA 325.   The freezer contained samples from men undergoing chemotherapy or other medical treatments that could affect their reproductive capacity.  Again, although the viability of the samples and calculation of losses may vary among donors, certain common issues relating to UBC’s alleged negligence, the availability to UBC of a contractual exclusion clause, and whether that clause is contrary to public policy, were held best resolved by certifying the class proceeding.   The results of the common issues determination would then dictate the extent of any individualized review of the cases.

The two appeal court decisions are consistent with recent changes to both Ontario and B.C. rules of court which, through the principle of “proportionality”, seek to enhance access to justice to those for whom the cost of litigation would otherwise be prohibitive.

Share This Post