The changing landscape of class actions and mass torts in Canada

For over twenty years, Canada has been a haven for class actions due to the low threshold for obtaining class certification. Although Canadian class action defence counsel have successfully defended certified class actions at trial,^[1] the vast majority of certified cases settle without a determination of their merits.

As such, class actions remain a popular model for plaintiffs to litigate product liability claims in Canada, particularly in British Columbia, whose legislative framework permits national classes while allowing virtually no risk of a costs award against them. Plaintiffs’ counsel from outside of BC now file class action cases in the province to seize the strategic advantages it provides.

Simultaneously, several Canadian plaintiffs’ firms have recently elected to forego the traditional approach of a class action in favour of advancing a “mass tort” whereby they forego the bringing of a traditional class action in favour of filing many individual claims in courts across the country. Since Canada has no equivalent to the American multidistrict litigation system, the procedures used to manage large “mass tort” inventories of cases nationally are largely ad hoc. This emerging trend raises significant challenges and also potential opportunities for the product liability defence bar.

The Emerging Model of Mass Torts

In recent years, a number of Canadian plaintiffs’ firms have elected to forego the pursuit of a traditional class action claim in favour of commencing a “mass tort” of individual cases across the country. Under this model of mass torts, instead of commencing a single proposed national class action, plaintiffs’ counsel advance an inventory of individual plaintiffs’ claims involving the same product and general issues. Alternatively, plaintiffs’ counsel may initially commence a class action, only to later discontinue it in favour of a proposed settlement based on individual evaluation and settlement of the known class members’ claims, relying on the tolling provisions in various class proceedings statutes.

To date, most of the cases we have seen that utilize this new model of mass tort involve medical devices (in particular, orthopaedic and women’s health products). However, plaintiffs’ counsel are also utilizing inventories for claims regarding prescription pharmaceuticals and over-the-counter medicines.

The size of these mass tort inventories can vary from as few as ten individual cases to into the hundreds. The cases typically centre on alleged injuries arising from a single product, but may include allegations of negligent design or manufacture, or failure to warn involving a family of related products with allegedly similar characteristics. Each case is typically commenced in the plaintiff’s province of residence. While the rules of civil procedure are broadly similar in each of the common-law provinces, there are some important differences between provinces that counsel must account for when filing or defending the resulting patchwork of individual claims across the country.

There are a number of potential advantages to plaintiffs advancing multiple individual claims across multiple provinces rather than filing a single proposed national class action on behalf of all Canadians who have used the product and claim injury. We have identified four major reasons.

1. A potential seat at the settlement table 

Perhaps the biggest single driver for this emerging trend is the desire on the part of entrepreneurial plaintiffs’ firms to seek a seat at the settlement table while avoiding the corresponding risk, or even merely the cost, of pursuing a class action. While Canadian courts have tended to certify product liability class actions, success is not guaranteed, defendants routinely oppose class certification, and certification has successfully been opposed.^[2]

In a case involving over 15 different women’s health products, an Ontario court, in denying certification at first instance, noted that “no type of class action is quintessentially certifiable, even a product liability class action.”^[3]

Plaintiffs’ firms who choose to pursue a mass tort of individual cases in Canada avoid the risk of a protracted and potentially difficult certification fight. Even if the parallel class action is certified, plaintiffs’ firms utilizing this model are likely to opt their plaintiffs out of the class action, with the result that their individual plaintiffs will not be bound by any common issues trial decision or class-wide settlement and resulting class-wide release. While the defendant may still choose to try one or more of the individual cases — and may in fact be more emboldened to do so once the threat of a national class action is resolved — by pursuing an inventory of multiple individual actions, plaintiffs’ counsel have a better chance of getting a seat at the settlement table should the defendant eventually decide to settle their individual cases.

2. Avoidance of carriage fights

Another important driver for plaintiffs’ counsel is the avoidance of the carriage fight that may come with the commencement of a class action. In the event of a product recall, it is common in Canada to see the commencement of multiple proposed class actions by multiple plaintiffs’ firms shortly thereafter. While competing plaintiffs’ firms may cooperatively work out who gets to represent the proposed class, with increased frequency, they do not. While there is no mechanism for addressing interprovincial carriage fights between competing plaintiffs’ counsel pursuing similar claims in multiple different provinces, defence counsel may seek to stay one or more of the overlapping cases with the same effect if successful. Within each province, however, a carriage fight between plaintiffs’ counsel pursuing similar class action claims can also often arise. By pursuing a mass tort inventory of individual claims, plaintiffs’ counsel avoid this potential fight.

3. Bespoke recovery

Plaintiffs’ counsel frequently point to the individual mass tort model as permitting greater bespoke settlements for their clients compared to the results achieved in class actions. First, they claim that “[m]edical product liability cases are often tried as mass torts because the severity of resulting injuries can vary widely” or “[i]n a class action the individual aspects tend to take a back seat to the common questions, so the uniqueness of some of the claimants’ damages can get lost.”^[4] Second, some plaintiffs’ firms claim that “there is a strong argument that proceeding by way of mass tort will provide more equitable settlements for the individual litigants that we represent” compared to a class action.^[5] Third, advancing individual claims may be seen by some plaintiffs’ firms as amenable to resolution insofar as they may provide individual plaintiffs with a greater sense of being “heard” (e.g., at discovery, mediation, etc.), a fact that may be instrumental in addressing unrealistic expectations among individual plaintiffs as to the likely outcome of their specific case. Notwithstanding the above, the basis for these assertions is not clear and there is no data, to our knowledge, that indicates that plaintiffs in Canada are likely to recover greater amounts in terms of settlement through this model of mass tort than may be achieved through a negotiated settlement in a class action.

4. Recent changes to the Class Proceedings Act in Ontario

Counsel pursuing a mass tort of individual cases may also be motivated in part by relatively recent legislative changes to Ontario’s class action regime. On October 1, 2020, legislative changes to Ontario’s Class Proceedings Act (CPA) came into effect; these were the first substantial changes to the CPA in over 27 years. The legislative changes include more defence opportunity to bring early motions to dispose of the action in whole or in part. Ontario courts must also now account for the existence of similar class action proceedings in other provinces when deciding whether to grant class certification and whether “it would be preferable for some or all of the claims of some or all of the class members, or some or all of the common issues raised by those claims, to be resolved in the proceeding commenced in the other jurisdiction…” (CPA, s. 5(6)). Mandatory “superiority” and “predominance” tests have been introduced as part of the preferability requirement for class certification in Ontario. In the case of superiority, in order for the proposed class action to be considered the “preferrable procedure” for resolution of the common issues, the plaintiff must now establish that the proposed action “…is superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant, including, as applicable, a quasi-judicial or administrative proceeding, the case management of individual claims in a civil proceeding, or any remedial scheme or program outside of a proceeding” (CPA, s. 5(1.1)).

These legislative changes have led to a perception among some Ontario-based plaintiffs’ firms that the test for certification is no longer as favourable to plaintiffs in Ontario as it previously was. It remains to be seen if these changes to the CPA in Ontario are in fact as material as believed by the plaintiffs’ class action bar, but since these legislative changes have come into effect, we have observed fewer product liability class actions being commenced in Ontario.

An Increase in Class Actions in BC

There have also been changes to BC’s Class Proceedings Act (BC CPA) that have impacted the class action landscape in Canada. As of October 2018, amendments to the BC CPA permitted plaintiffs who file a class action in BC to have a national class action certified on an opt-out basis. A national class may still be divided into resident and non-resident subclasses, but non-residents will not need to take an affirmative step to opt into the certified class.

The potential for a national class immediately made the province a much more attractive jurisdiction for plaintiffs’ counsel to file proposed class claims, in combination with its existing “no costs” framework for class actions (BC CPA, s. 37) and the long-standing perception among the class action bar that the threshold for certification is lower than in Ontario. That perception was increased, and perhaps cemented once the Ontario CPA was amended to add superiority and predominance requirements in 2020.

However, legislative changes are not the only reason for an increase in the number of class action cases commenced in BC in the last three to five years. Cases are arguably less costly to advance to a certification hearing in BC given, among other things, the lack of cross-examinations on affidavits as of right. There has also been an increase in the number of proposed class actions filed by BC-based plaintiffs’ firms (i.e., excluding cases filed by plaintiffs’ counsel from other provinces). Changes to the legal framework for motor vehicle accidents, particularly the move to a “no fault” scheme and limits on the ability to pursue motor vehicle accident claims in court, have dramatically impacted the practice of many personal injury lawyers in the province, some of which have shifted their practice to personal injury claims of another type — product liability cases. While some plaintiffs’ counsel have adopted a mass tort model for pursing such claims, which is more in line with their historic practice, many other BC-based entrepreneurial plaintiffs’ counsel are choosing to file proposed class actions.

Co-Existence of Mass Torts and Class Actions

It is apparent from recent litigation that class actions will continue to be pursued and exist alongside the new mass tort model, with both procedures sometimes being used by different plaintiffs’ counsel with respect to the same product. There will be continued relevance for class actions in product liability claims, not only because of the advantages of a class “opt out” model, but also in light of some notable disadvantages for plaintiffs’ firms who pursue a mass tort approach. As noted by one leading firm: “[t]he main downside to mass torts is that they are extremely complex.”^[6] There is likely to be much more initial work involved for plaintiffs’ counsel in terms of client intake, the collection of relevant records, and file management.

Conversely, in a mass tort consisting of multiple individual actions, the defendant will have greater opportunity for access and visibility into a plaintiffs’ firm’s inventory and can focus on liability and damages in each individual case. The defendant generally has the right to discover the named plaintiff advancing each claim and to obtain production of relevant plaintiff records. Should the defendant elect to pursue a settlement strategy with respect to the inventory, greater focus can similarly be placed on each plaintiff’s potentially provable injuries and damages.

There are also a number of significant strategic implications that arise when considering a settlement of cases filed in the mass tort model. In the increasingly common circumstance where plaintiffs’ counsel in Canada is advancing a national inventory of individual cases outside of the context of a class action, but there also exists in parallel one or more class actions that are being advanced in respect of the same product and issues by another group of plaintiffs’ counsel, considerations regarding the timing and sequence for settling the class action, mass tort or individual cases will also be important. Ultimately, resolution of the class action on settlement terms favourable to the defence may be used to set settlement expectations for the eventual resolution in the individual cases, should the defendants elect not to try the individual cases but seek resolution of them on similar terms.

Overall, there is no existing procedural mechanism that may be used to case-manage this emerging model of mass torts across Canada (akin to multidistrict litigation in the US). While the Rules of Civil Procedure in each province typically permit for case management, joinder, consolidation of cases and the potential for the use of test cases and trials together or in succession, the rules are not generally designed to deal with mass tort inventories consisting of multiple individual cases within the province, let alone across the country (e.g., an Ontario-based judge does not have the jurisdiction to manage an individual action in another province), and there are currently no protocols that have been developed across Canada for addressing and managing such inventories. While there are multi-jurisdictional protocols regarding the management and coordination of multiple class actions across the country, similar protocols regarding the management and coordination of a mass tort inventory raising similar claims do not currently exist.

Conclusions

While class actions remain the dominant mode for pursuing product liability claims in BC, the emergence of a new model of mass torts in Canada, and the decrease in product liability class actions in Ontario, represent a significant development for the product liability defence bar — and one we are watching with interest. This trend has rapidly evolved and expanded in recent years as a means for some plaintiffs’ counsel to capitalize on perceived limitations to the traditional class action model, and it brings with it significant new challenges for counsel who defend complex product liability matters. The mass tort model increases the already high likelihood that defendants will be faced with multiple, competing class actions and individual claims in multiple provinces, requiring coordinated multi-jurisdictional teams to respond to product liability claims.

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Robin Linley is a Partner at Blake, Cassels & Graydon LLP in Toronto. He provides proactive advice to leading manufacturers and distributors and others in the distribution chain on risk management, litigation avoidance strategies, government regulation and compliance, and product warnings and recalls. He primarily represents clients in the defence of serious personal injury cases involving allegations of failure to warn, negligent design, manufacture and testing of medical devices, pharmaceutical products, automotive parts, food products, commercial and industrial machinery, crop protection and agricultural products, electrical products, restaurant equipment, and consumer goods. Many of these cases are class actions.

Robin's practice extends into general commercial litigation where he represents both plaintiffs and defendants in disputes involving breach of restrictive covenants, shareholder disputes, professional negligence and breach of commercial contracts.

He also represents and advises First Nations and non-First Nations clients in resolving disputes involving Canadian Aboriginal law arising from the management of First Nations lands and resources, constitutional claims and treaties, and issues relating to the Crown's duty to consult.

Robin Reinertson is a Partner at Blake, Cassels & Graydon LLP in Vancouver. She has extensive litigation expertise in British Columbia and Ontario in the defence of class actions and product liability, consumer protection, competition/antitrust, privacy and regulatory compliance cases. She also regularly advises clients on risk management and litigation avoidance in these areas. Robin has a proven record of defeating class actions prior to certification and experience defending class action cases through discovery and trial. She has appeared as lead counsel at all levels of the courts of British Columbia and is recognized as a leader in the area of class action defence by Chambers Canada, The Canadian Legal Lexpert Directory, The Best Lawyers in Canada and Benchmark Canada.