Class Actions: Objectives, Experiences and Reforms

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Project Purpose

The Law Commission of Ontario’s (LCO) Final Report, Class Actions: Objectives, Experiences and Reforms is the first independent, evidence-based and comprehensive review of class actions in Ontario since the enactment of the Class Proceedings Act (CPA) in 1993.

The report considers three major questions:

Are class actions in Ontario fulfilling their three objectives: access to justice, judicial economy, and behavior modification?
Does the CPA reflect contemporary class action issues and practice?
Does the CPA reflect contemporary priorities in Ontario’s justice system?

Class actions are one of the most high-profile and far-reaching legal procedures in the Canadian justice system. The CPA was passed 27 years ago. During this period, class actions have grown dramatically in volume, complexity, and impact in Ontario and across Canada.

The Final Report makes 47 recommendations to reform the CPA and related policies in a broad range of areas.

Key Areas for Reform

The Final Report’s 47 recommendations include a combination of substantive and technical amendments to the CPA, significant reforms to class action practice management, the adoption and promotion of consistent best practices in key areas, and major new reporting obligations. The Final Report’s major themes include:

The CPA needs wide-ranging reforms to better fulfill class actions’ promise to improve access to justice, foster judicial economy, and promote behaviour modification;
The CPA should be amended to reflect contemporary class action issues and practice;
The speed and cost of class actions should be improved significantly;
Dormant, copycat, de minimis and extortionate class actions should be weeded out;
Class member’s interests should be better protected;
Counsel fees and settlements should be scrutinized and justified more effectively;
Certification should become more streamlined and decided quickly and efficiently;
Class action cost rules should be amended;
The justice system – and the public – needs new tools to ensure class actions are effective, transparent and legitimate.

In many areas, the LCO has concluded that the existing statutory provisions and/or judicial interpretations of those provisions are sound and should not be changed.

In the short term, these reforms will improve judicial scrutiny, case management and best practices in individual cases. In the long term, these reforms will create higher expectations and responsibilities for counsel, promote access to justice and judicial economy, improve outcomes for class members, promote evidence-based best practices, and establish an empirical record to evaluate class actions more thoughtfully.

Specific recommendations include:

Several initiatives to improve case management in class actions, including stricter rules for parties to advance their actions in a timely manner, new administrative dismissal provisions, and new authority for courts to case manage class actions proactively;
New provisions to better manage carriage hearings and multijurisdictional class actions;
Improving certification proceedings by encouraging courts to interpret the CPA 5 certification test more rigorously, using summary judgement motions more frequently, and a Practice Direction incorporating best practices for certification motions;
A combination of statutory and policy initiatives to improve class action settlement approval and distribution, including provisions placing new and rigorous obligations on parties seeking settlement approval; improved notice requirements; mandatory and detailed “outcome” reports; and new provisions governing claims administrators and cy pres;
Major new reporting requirements for parties seeking approval of class actions, including mandatory “outcome reports” that contain detailed information on take up rates, compensation for class members, legal and transaction costs;
New provisions requiring greater scrutiny and transparency of counsel;
Introducing a modified no-costs regime for certification and ancillary motions;
New provisions to govern third party funding and the Class Proceedings Fund;
Reforms that streamline class action appeal routes and make the appeal process fairer between plaintiffs and defendants.

LCO Process

The Final Report was developed through LCO’s independent, comprehensive, evidence-based and transparent law reform process. Highlights of the LCO process include:

Retaining two leading Canadian academics to act as Principal Researchers:
- Professor Jasminka Kalajdzic, Faculty of Law, University of Windsor
- Professor Catherine Piché, Faculty of Law, Université de Montréal

Appointing an expert Reference Group:
- The Honourable Stephen T. Goudge, Chair of the Reference Group and LCO Board Liaison
- Marie Audren, Partner, Audren Rolland LLP
- Tim Buckley, Global Resolutions Inc. (formerly of Borden Ladner Gervais LLP);
- Michael A. Eizenga, Partner, Bennett Jones LLP
- Professor Trevor C. W. Farrow, Osgoode Hall Law School
- André Lespérance, Partner, Trudel, Johnston and Lesperance
- Celeste Poltak, Partner, Koskie Minsky LLP
- Linda Rothstein, Partner, Paliare Roland Rosenberg Rothstein
Undertaking the most extensive consultation on class actions in Canada, including:
- Consulting with broad cross section of lawyers, judges, class administrators, class members, community organizations, insurers, academics, justice system officials and government representatives.
- Receiving 32 public submissions.
Developing the first class action empirical database in Ontario.