What Is the LCO Class Action Report?

The Law Commission of Ontario’s (LCO) class action report 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?

The LCO report makes 47 recommendations to reform the Class Proceedings Act, 1992 and related policies in a broad range of areas.

The recommendations address a broad cross-section of issues, including the process for initiating a class action, certification, settlement approval and distribution, counsel fees, costs and reporting on class actions.

The report’s recommendations offer a necessary and important update to a significant piece of legislation that is now almost 30 years old.

What is the Law Commission of Ontario?

The LCO is an independent research organization located at Osgoode Hall Law School in Toronto.  The LCO is Ontario’s leading law reform agency.

The LCO’s mandate is to make independent recommendations that provide principled and practical solutions to contemporary and complex legal policy issues. The LCO is committed to evaluating laws impartially, transparently and broadly.

The LCO is governed by a Board of Governors representing a broad cross-section of leaders within Ontario’s justice community.   More information about the LCO is available at www.lco-cdo.org.

How many class actions are there in Ontario?

The LCO estimates there have been approximately 1,500 class action lawsuits launched in Ontario in the last 20 years.  In recent years, the LCO estimates there have been approximately 100 class actions initiated per year.

Why are class actions important?

Class actions are one of the most high-profile and far-reaching legal procedures in the Canadian justice system.

Ontario’s Class Proceedings Act was passed 27 years ago.  During this period, class actions have grown dramatically in volume, complexity, and impact in Ontario and across Canada.  Class action proceedings have significant policy and financial implications for both class members and class action defendants.

Notable class actions in Ontario include matters related to:

  • Products liability, including implanted medical devices and food product recalls;
  • Privacy breaches concerning credit cards and data security;
  • Consumer protection issues such as payday loans and criminal interest rates;
  • Environmental accidents, such as Walkerton, soil contamination and explosions;
  • Mass personal injury involving blood, blood products and c. Difficile infections;
  • Institutional abuse in residential schools and health care facilities;
  • Labour and employment issues concerning pensions, gender discrimination, misclassification and unpaid overtime;
  • Securities issues; and,
  • Federal and provincial inmates held in solitary confinement.

Why is the LCO Class Action report important?

The LCO class action report is important because:

  • The project addresses current, systemic, and controversial justice policy issues. Class actions have significant policy and financial implications for class members and class action defendants.  Class actions also have systemic implications for access to justice, court procedures and efficiency, and government and corporate liability.
  • The project is timely. The LCO project is the first independent and comprehensive assessment of class actions in Ontario since the 1990 report of the Ontario government’s Advisory Committee on Class Action Reform.
  • The project is independent. Class action discussions are controversial and often driven by stakeholder interests and perspectives.  This project is unique because the LCO is independent and committed to a “public interest” analysis.
  • The project is participatory and evidence based. The LCO project is based on the most comprehensive consultations and extensive research of class actions ever undertaken in Canada.

Who will benefit from the report?

Beneficiaries of the report are likely to include:

  • The Government of Ontario, the federal government, and other provincial governments across Canada;
  • Legal system professionals, including the class actions bar, the judiciary; and legal organizations across Ontario and Canada;
  • Current and potential class action plaintiffs (class members);
  • Current and potential class action defendants (including corporations and governments);
  • Community groups or legal organizations in fields related access to justice, civil justice reform, consumer protection, health, environmental protection, Indigenous issues, and related areas often subject of class actions lawsuits;
  • Academics and experts working in fields related to class actions;
  • Law schools; and,
  • The general public.

How was the project funded?

The project was funded by the LCO.  It was supported by the Faculty of Law, University of Windsor and la Faculté de droit de l’Université de Montréal.  Additional funding was provided by the Ontario Ministry of the Attorney General and the Federal Department of Justice.

Who did the LCO consult? Who worked on the report?

The LCO undertook the most extensive consultation on class actions in Canada.

The LCO consulted with a wide range of individuals and organizations, including a broad cross section of lawyers, judges, class administrators, class members, community organizations, insurers, academics, justice system officials and government representatives.  The LCO consulted with individuals and organizations in Ontario, Quebec, British Columbia, Alberta, the United States and Australia.  The LCO also received 32 public submissions and made presentations at numerous public and private events, conferences, and meetings.

The project was supported by a distinguished group of academics, justice system leaders, and class action practitioners.

The project’s Principal Researchers include:

  • Professor Jasminka Kalajdzic, Faculty of Law, University of Windsor
  • Professor Catherine Piché, Faculty of Law, Université de Montréal

The project’s expert Reference Group include:

  • The Honourable Stephen T. Goudge, LCO Board of Governors 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 Lespérance;
  • Celeste Poltak, Partner, Koskie Minsky LLP; and
  • Linda Rothstein, Partner, Paliare Roland Rosenberg Rothstein.

How long did the project take?

The project took approximately 24 months.

What are the major themes?

The LCO report’s major themes include:

  • The CPA needs comprehensive reforms to better fulfill class actions’ promise to improve access to justice, foster judicial efficiency, 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.

What does the LCO recommend?

The LCO report makes 47 recommendations to reform the Class Proceedings Act, 1992 and related policies.  These recommendations address a broad cross-section of issues, including the process for initiating a class action, certification, settlement approval and distribution, counsel fees, costs, reporting on class actions and appeals.  In many areas, the LCO concluded that the existing statutory provisions and/or judicial interpretations of those provisions are sound and should not be changed.

Highlights of specific recommendations?

The LCO’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.

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.

Is there consensus on the report’s recommendations?

Class actions are controversial and have been for a long time.  Many of the issues first discussed in an 1982 report by the Ontario Law Reform Commission (OLRC), the LCO’s predecessor agency, remain controversial today, including the legal test for certifying a class action, legal costs and plaintiff counsel fees.

The LCO expects there will be general support for most recommendations, including recommendations respecting case management, carriage, multijurisdictional cases, settlements, fee approval and appeals.  Some recommendations are likely to controversial, including those respecting certification and costs.

The LCO’s goal was not consensus.  It was to independently identify principled, practical, and forward-looking recommendations that best achieve the objectives of class actions and other priorities the LCO identified.

The LCO believes stakeholders will see both potential benefits and major new responsibilities in our recommendations.

Will the provincial government implement the report?

The LCO will formally submit the class action report to the provincial government when it is publicly released.  The provincial government has expressed interest in class action reform, but has not introduced legislation or formally committed to do so.

Where can I get more information?

More information about the project is available at https://www.lco-cdo.org/classactions.

More information about the LCO is available at www.lco-cdo.org.

Questions about the project can be directed to:

Nye Thomas
Executive Director, Law Commission of Ontario
Athomas@lco-cdo.org
416-402-7267