Litigation Trends in Canada 2020

With legislation, regulation, jurisprudence and practice evolving continually and rapidly, the need to stay current is more pressing than ever.

WITH LEGISLATION, regulation, jurisprudence and practice evolving continually and rapidly, the need to stay current is more pressing than ever. With this in mind at the start of the new year, we prepared a summary of the main trends in Canadian litigation, grouped into three categories: cannabis-related, class action and energy sector litigation. The first two will be felt nationally; the last is more focused on Alberta.


One year after recreational cannabis was legalized across Canada, litigation around the industry is breaking ground. 

As supply, distribution and regulatory issues have arisen, many of the industry’s stocks have lost their lustre: By mid-November 2019, some were more than 70 per cent off their highs. Solvency risks and cannabis-related securities class actions started materializing, and litigation over quality, quantity, delivery dates and unique contractual terms began to emerge. Regulators increased scrutiny of disclosure expectations, director independence, “inadequate transparency” regarding cross-ownerships and issuers’ conflicts of interest. 

This points out that multi-faceted, multi-jurisdictional litigation is definitely worth watching. 


Three areas of class action litigation likely to dominate in 2020 are: 

Privacy Law and Data Protection Class Actions
With Canadian courts having recently recognized a new tort called “intrusion upon seclusion” (i.e., an invasion of privacy), and mandatory data breach reporting having been in effect since November 2019, data breach litigation should continue to rise in 2020 and beyond. Two recent developments favourable to defendants are: (i) a Superior Court of Quebec holding that annoyance and concern following personal data theft is a normal inconvenience of living in society and not compensable; and (ii) first instance Ontario cases suggesting that certain privacy breaches are not suited to class treatment because they raise too many individual issues. 

Securities Class Actions
Securities class actions are nowhere near as prevalent in Canada as they are in the U.S. Canada still sees relatively few stand-alone proceedings where there are no previous restatements or regulatory actions. Most are launched on the heels of (i) corrective disclosure by the issuer, (ii) a regulatory investigation or (iii) enforcement proceedings. While enforcement proceedings are inherently public, many investigations are conducted confidentially. However, some do garner media attention either due to the investigation’s scope or a regulatory decision that disclosure of certain issues is in the public interest.  
We expect the increased scrutiny to continue in 2020. Regulators are particularly focused on nascent industries like cannabis and crypto-currencies. Given the tendency of plaintiffs’ lawyers to piggyback on regulatory action, an uptick in securities class actions seems inevitable. While these had abated, they are on the rise again, particularly in Ontario and to a lesser extent in Quebec.  

Competition Law Class Actions
In late 2019, the Supreme Court of Canada (SCC) ruled that “umbrella purchasers” — purchasers of a non-price fixed product whose price allegedly increased due to market forces resulting from a conspiracy — can be included as plaintiffs in Canadian price-fixing class actions.  
Most competition class actions in Canada have their origins in enforcement proceedings by U.S. and international regulators, and by the Canadian Competition Bureau. Interestingly, however, U.S. courts have deemed umbrella purchasers’ interests as too remote to be actionable. The SCC decision means that even when Canadian actions are based on U.S. enforcement proceedings or amount to “copycat” cases, Canadian classes will become larger, potential exposure will increase and litigation costs will rise as additional groups of claimants increase the complexity of assessing damages. 
Canada’s Commissioner of Competition Matthew Boswell has also committed to a policy of “active enforcement” that has the digital, telecommunications, pharmaceutical and infrastructure sectors squarely on the Bureau’s radar. Since Boswell’s appointment in May 2019, the Bureau has demonstrated that it has every intention of following through on this commitment. The upshot is that the coming years are likely to see even more activity in the competition class action arena 



Litigation in the energy industry has been active and volatile since the 2015 downturn. Low prices for Canadian heavy crude and natural gas, coupled with restricted world markets, have caused serious financial stress for energy companies — an environment that has now persisted into its fifth year and has had a major impact on litigation in Western Canada. 

Oil and Gas Litigation
The continuing low pricing environment, financial stress and the need to bolster cash flow has led affected companies, particularly those involved in joint ventures in the upstream and midstream space, to litigate disputes as opposed to demonstrating the greater elasticity that existed in this interconnected sector in better times. Put another way, there are more bet-the-company cases now, where survival can turn on sums that are less significant than when profits were rolling in. This more “aggressive” approach to dispute resolution has resulted in an increase in litigation, either in the courts or by way of arbitration.

Restructuring and Insolvency
More restructuring and insolvencies are looming for 2020 and 2021 in this sector. Activity is on a steep rise for practitioners who have been busy since the latter half of 2019. Banks, who have long been lenient with their customers, are beginning to lose patience in an environment where more companies are holding on by a thread, with no relief in sight for the short or medium term. Recent Companies’ Creditors Arrangement Act (CCAAproceedings involving major midcap players are indicative of this trend, which will likely remain strong for the next few years.

Construction Litigation

A rash of construction litigation in Alberta may seem like a non sequitur: after all, it’s hardly boom times for construction projects in the province. But, as usual, litigation tends to trail the boom times, and the downturn has led to more litigation of construction disputes that might have been overlooked or settled when times were good. These disputes are often coupled with troubled construction projects that were commenced during the boom and are now slowed or stalled, as cash flows shrink.