Ontario government introduces legislation proposing significant amendments to the Class Proceedings Act

Recent proposed amendments to Ontario’s Class Proceedings Act, 1992 (CPA) mark the first time Ontario’s class action legislation has been significantly modified since its inception. Some of the proposed changes are in step with a comprehensive review of class actions by the Law Commission of Ontario, which issued a report in July.

The Ministry of the Attorney General released a description of the CPA changes. The proposed changes under Bill 161 are said to be aimed at making class actions more fair, transparent and efficient for people and businesses in Ontario. If any of these changes become law, they will only affect class actions commenced after the amendments enter into force.

Here are some of the most significant proposed changes:

Changes to the certification test

A proposed amendment provides that certification of the class action will be preferable only, if, at a minimum, it is superior to reasonably available alternative means of determining entitlement of class members to relief and if the questions of fact or law common to the class members predominate over any questions affecting only individual class members. This test would appear to raise the bar as it relates to the preferability requirement and makes Ontario more in line with the requirements in other jurisdictions, which require a predominance of the common issues over individual issues. These changes may create additional obstacles to plaintiffs seeking certification that raise significant individual issues.

Determining preferable forum for overlapping claims in other provinces

Ontario courts will be required to determine whether it would be preferable for some of the claims or common issues of the class members to be resolved in a proceeding commenced in another jurisdiction outside Ontario. Certain objectives are set out that the court must consider, and the court can also determine jurisdiction prior to the motion for certification, with the court having the option of staying the proceeding or imposing such other terms. Further, it will be mandatory for Ontario plaintiffs to simultaneously register the proposed class proceeding.

Settlement approval

The proposed amendments outline requirements when seeking court approval of a class action settlement. Class counsel is required to disclose a list of prescribed factors to assist the court in assessing the fairness of the proposed settlement. The changes require settlements to be fair, reasonable, and in the best interests of people who are part of the class action. The court is expressly given the role of supervising the administration and implementation of a settlement and shall not approve a settlement unless those with subrogated claims have had a chance to consider and have approved the settlement in writing.

Appealing certification orders

Defendants and plaintiffs can appeal certification orders directly to the Court of Appeal, instead of through an intermediary appellate court. This change would forgo the requirement that defendants seek leave to appeal.

Early dismissal motions

Before the motion for certification, the court will hear motions by defendants that seek to narrow or dispose of the proceeding. Currently, the courts frequently rule that dismissal motions should only be heard in conjunction with certification motions. In addition, the court shall on motion dismiss for delay a proceeding unless by the first anniversary steps have been taken to advance the action.

Carriage motions

Carriage motions arise when multiple parallel class actions are filed and counsel are unwilling to work together. Carriage motions must be decided within 60 days of commencement of the first action. The court’s decision is final and not subject to appeal.

Third-party funding

Third-party funding agreements must be approved by the court based on certain criteria being met and on notice to the defendant. If a plaintiff receives financial support from a third-party funder, it will be mandatory to disclose this arrangement in the notice of certification. The court may also consider whether the plaintiff has received independent legal advice and whether the defendant should be able to obtain security for costs from a non-resident third-party funder.

Costs and fees

The costs of a notice of certification will only be awarded to the plaintiff if the class proceeding is successful. Further provisions are added that state the court shall not approve an agreement unless it determines the fees and disbursement to be paid under the agreement are fair and reasonable taking into account various factors. The court may also hold back fees and disbursements until certain criteria are met.

The author wishes to thank articling student Josh Hoffman for his help in preparing this legal update.