Jean-Louis Nandrino a,b , Fabrice Leroy a,b and Laurent Pezard b,c,d (a) UPRES “Temps, ´emotion et cognition”, Universit´e Lille 3(c) Neurosciences Cognitives et Imagerie c´er´ebrale LENA-CNRS UPR 640(d) Institut de Psychologie, Universit´e Paris 5Address for correspondance: L. Pezard, LENA-CNRS UPR 640, 47 Bd del’Hˆopital, 75651 Paris cedex 13. France. The development of the ma
Microsoft word - chamber -- canada class action white paper _10-15_The Canadian Class Action Landscape: Getting Greener?
John H. Beisner, Gary A. Rubin, and Kattie L. Kingsley Skadden, Arps, Slate, Meagher & Flom LLP In their formative years, Canadian class actions produced little news to defendants’ liking, as case after case was certified for class treatment.
Over the past three years, the environment has manifested change – but not all in the same direction. Some tribunals have become more circums-pect about the wisdom and efficacy of aggregate litigation in the product- liability and toxic-tort contexts. At the same time, however, other elements of the Canadian judiciary have issued groundbreaking precedents that open the door to more class litigation. Despite pockets of positive developments,the overarching trend is an increased volume of class actions being filed in Canadian courts and a broadening of the subject matter of those actions.
Recent cases suggest developments in the fol owing areas: Class-certification standards: more rigor in some areas, less in others
Historically, the Canadian provincial courts have applied very low thresholds for class certification. Previously, we expressed concern that lax certification standards could foster “generic causation” cases – class pro- ceedings created primarily to determine whether a product could cause cer-tain injuriesSeveral recent decisions, however, suggest that courts are ap- plying more stringent certification standards to product-liability cases, espe- See John Beisner, Karl Thompson, and Allison Orr Larsen, Is Canadian Class Action Law All It’sCracked Up to Be? A Closer Look At A Flawed Model for European Class Actions, ENGAGE,Vol. 9, Issue 2 (June 2008).
cially pharmaceutical-tort cases, and toxic-tort cases. At the same time, however, the hurdles in securities-fraud and competition cases are becom-ing more flexible.
In 2007, an Ontario court handed down Boulanger v. Johnson & John- sona case addressing safety-related allegations regarding the drug Propul-sid. In that case, the court certified a class to determine generic causation, even though proof about individual injuries would still be required. The court viewed generic causation as an appropriate common issue for class certification because it would “significantly move the litigation forward.Not long thereafter, a Saskatchewan court handed down Wuttennee v. Merck Frosst Canada Ltd.in which it certified a class based on supposed common issues, including “whether Vioxx can cause or exacerbate cardiovascular or gastrointestinal conditions.Merck had argued that generic causation wasnot a common issue, but the court overruled the objection, relying in part Critics argued that by accepting as a common issue the question whether Vioxx could cause either cardiovascular or gastrointestinal conditions,the Wuttennee court had effectively negated any class-certification commo- nality requirement. In 2009, those critics were heard, and the Saskatchewan Court of Appeal reversed the class certification rulingAccording to the appel ate court, “[I]t seems clear, at least, that the claim for damages forpersonal injury in relation to gastrointestinal injuries or conditions is com- pletely unrelated to the claim that Vioxx increased the risk for certain ad- verse cardiovascular events and, indeed, would have a distinct factual ba- The Quebec Superior Court continued this trend in August 2009, re- jecting a similar proposed class – a rare occurrence in that court. In theQuebec case, Goyette v. GlaxoSmithKline Inc.the plaintiff brought a class ac- tion on behalf of persons who allegedly suffered withdrawal symptoms af- ter discontinuing use of the drug Paxil. The court rejected the class on two primary grounds. First, the court held that a class proceeding would notconserve judicial resources because the court would have to separately de- termine what symptoms each individual experienced and what warnings each individual received. Second, the court found that the merits of the plaintiffs’ claims were simply too weak to justify the judicial resources ne-cessary for a class trial. This was so because the warning label on the named plaintiff’s Paxil explicitly warned of the withdrawal symptoms she later suffered. For similar reasons, the court also found that the named plaintiff was not an adequate class representative.
These decisions suggest that the class action landscape in Canada is improving for at least one industry. But numerous other class actions are still pending against pharmaceutical manufacturers in Canada, and whether the current trend holds remains to be seen.
In March 2010, the Supreme Court of Newfoundland and Labrador Court of Appeal extended the Saskatchewan Court of Appeal’s more strin- gent class-certification standards set forth in Wuttennee to the toxic-tort are-na in Dow Chemical Co. v. RingIn Dow, the Court of Appeal reversed the trial court’s certification of a class of residents of a military base who claimed that the government’s use of herbicides at the base caused lym- phoma or contributed to the risk thereof. The appellate court reversed theclass certification on three grounds.
First, the Court of Appeal held that the class was not “identifiable” because the class definition was overbroad. The trial court had defined the class as all residents of the military base “who claim they were exposed to dangerous levels of [herbicides] while on the Base.On this point, the appel ate court engaged in a two-step analysisIt first held that definingthe class as al residents of the base would be improper because an individ- ual’s mere residency at the base would not have a causal connection with any lymphoma. The appellate court next held that the trial court’s pur- ported limiter – residents “who claim they were exposed to dangerous le-vels” – actually did not limit the class definition at all because it did “not address the problem of eliminat[ing] persons who have no claim.” The Court of Appeal held: “There [were] no objective criteria to enable one to assess whether any one of the approximately 400,000 people [who have re-sided at the base] is properly part of the class.For this reason, the class did not satisfy the “identifiable-class” certification requirement.
Second, following Wuttennee, the Court of Appeal held that the class did not present common issues that could be resolved on an aggregate ba-sis and then applied fairly to all the class members. As the Dow appellants noted, the case involved “at least 12 chemicals sprayed and 40 distinct lym- phomas, . . . [with] spraying having taken place over a period in excess of 50 years.Accordingly, the appel ate court held that “what is framed asone question seeking one answer for all members of the class is in fact sev- eral questions requiring several answers which are dependent upon time of exposure of the individual members of the class.For example, the trial court’s first common issue had included the question: “Did . . . parts of theBase, after spraying, constitute an unusual danger of causing a malignant lymphoma and, if so, when?As the appel ate court observed, this one common issue was actually four discrete questions: (i) what parts of the base were sprayed, (ii) what herbicides were sprayed, and in which areas,and over what period of time, (iii) can any of those herbicides contribute to causing lymphoma, and (iv) what is the smal est amount of herbicide that can cause lymphoma. Thus, “[u]nless the relationship between variouschemicals and all types of lymphomas is the same, the determination will have to be made for each type of lymphoma.For this reason, the class’s common issues were not common at all, and class certification was impro- Finally, the Court of Appeal held that a class proceeding was not the “preferred procedure” because, as noted above, “the common issues [were] insignificant when compared to the large number of individual inquiries which would be needed to resolve this claim.
Like Wuttennee, Dow suggests that at least in toxic-tort cases, Canada’s appel ate courts may be taking a more stringent view of the class certifica- tion standards than the trial courts.
During 2009, the legal community gave considerable attention to Sil- ver v. IMAX Corp., the first case brought under the 2005 Ontario Securities Act’s regime creating liability for continuing disclosure misrepresentations on the secondary securities market. In IMAX, the plaintiff-shareholdersasserted two principal claims: (i) common-law misrepresentation; and (ii) statutory misrepresentation under the new Ontario Securities Act. These claims raised two issues, which court-watchers fol owed closely: First, would the IMAX court certify the class on the common-law claim, as wellas the statutory claim? The answer to this question would have far- reaching ramifications, because the Ontario Securities Act caps damages at 5% of the defendant’s market capitalization, but damages for the common- law claim are not capped. Second, would the IMAX court grant the plain-tiffs leave to proceed on their statutory claims, as required under the Ontar- io Securities Act? Because IMAX was the first decision to consider the sta- tute’s leave provisions, the legal community believed the answer to this question would set important precedent. The Superior Court of Justice is- sued an opinion on each of these issues.
On the class-certification issue, the IMAX court departed signifi- cantly from existing Canadian law on reliance and loss causation. Until IMAX, Canadian courts tended to view common-law misrepresentation claims as il -suited to class proceedings, because proof that each classmember relied on the alleged misrepresentation is necessarily individua- lizedIn Carom v. Bre-X Minerals Ltd.for example, a group of share- holders sought to certify a class action against a mining company that had allegedly lied about the discovery of a gold deposit in Borneo. The courtcertified a class, but held that it would include only shareholders who could demonstrate they had relied on a specific oral or written misrepresentation by the company. Notably, the court declined to adopt a U.S.-style “fraud- on-the-market” theory for secondary-market participants. In other words,shareholders who did not rely on a specific misrepresentation by the com- pany when buying their shares were not included in the class.
In IMAX, the court certified a class asserting common-law misre- presentation claims, even though the plaintiffs only pleaded reliance by therepresentative plaintiffs themselvesAt the class-certification stage, the court held, plaintiffs need only show that a corporate document or state- ment contained a misrepresentation – not that each shareholder member of the class relied upon it. Accordingly, even though the plaintiffs did notplead that each class member relied on a misstatement by the company, the common-law misrepresentation claim could proceed.
In addition, the IMAX court held that the class was proper even though most of the class members would be foreign. The court found a“real and substantial connection” between the plaintiffs’ claims and Ontar- io – IMAX is an Ontario-based Canadian corporation traded on the Toron- to stock exchange, and the alleged misrepresentations occurred in Ontario, Andrew Gray, Canadian Court Provides Guidance on Securities Class Actions, Mondaq Busi-ness Briefing, Gale Doc. No. A216865066 (Jan. 15, 2010).
Silver v. IMAX Corp.,  Case No. CV-06-3257-00, ¶¶17-23 (Ont. S.C.J.).
as well as in New YorkThe court also held that a class proceeding was appropriate, even though some plaintiffs would present individual issuesthat would have to be decided after the court determined the common The IMAX court also held that plaintiffs could proceed with their statutory claim. The Ontario Securities Act requires plaintiffs seeking topursue statutory claims for secondary-market misrepresentation to clear two hurdles – they must demonstrate that: (i) they brought the action in good faith; and (ii) there is a “reasonable possibility” that they wil prevail at a trialThe IMAX case presented the first test of these provisions. Thecourt held that under the clear language of the Act, imposing “a ‘high’ or ‘substantial’ onus requirement for good faith in this type of proceeding” would be improper.Further, the court concluded that “‘reasonable pos- sibility of success at trial’ sets a low threshold for a plaintiff seeking leave toproceed with an action.In addition, the court held, the “reasonable pos- sibility” of success at this stage addresses only the merits of the plaintiffs’ affirmative claims; it does not require the plaintiffs to “overcome” any de- fenses that the defendants could put forwardThe court conducted anextensive review of the evidence and found that the plaintiffs satisfied both Initially, the two IMAX opinions were expected to have widespread consequences for future shareholder class actions. A March 2010 decisionby a different judge of the same Ontario court, however, revealed consider- able judicial disagreement regarding the requirements for certifying a com- Id. ¶ 33 (quoting Heward v. Eli Lilly & Co.  OJ No. 404 (S.C.), ¶ 69 (“whenever, becauseof the existence of individual issues, a judgment on the common issues in favour of the plaintiffswill not determine a defendant’s liability, it will always be possible – and invariably likely – thatan acceptable class will include persons who will not have valid claims”)).
See Ontario Securities Act, § 138.8(2).
Silver v. IMAX Corp.,  Case No. CV-06-3257-00, ¶ 69 (Ont. S.C.J.).
mon-law misrepresentation class. In McKenna v. Gammon Gold, Inc., plain- tiffs sought to certify a class of investors seeking damages for misrepresen-tation both at common law and under the Ontario Securities ActPlain- tiffs claimed that during the proposed class period, Gammon, a mining company, released disclosures that contained misrepresentations, including overstating Gammon’s production rate at certain of its gold and silvermines. The plaintiffs asserted both common-law and statutory misrepre- The Gammon court refused to certify the common-law claims. The court held that reliance is an essential element of a common-law misrepre-sentation claim, and that “courts have usually concluded that negligent mi- srepresentation claims give rise to such individual inquiries as to reliance that they are unsuitable for certification.The court concluded: “The need to determine the issue individually would give rise to a multitude ofquestions in each case concerning the representations communicated to a particular investor, the experience and sophistication of the investor[,] and whether there was a causal connection between the misrepresentation(s) and the acquisition of the security.Accordingly, the court certified thestatutory claims only.
It is too early to tell whether the Gammon and IMAX common-law misrepresentation decisions can be reconciled, an issue that the Ontario Court of Appeal likely will be called upon to resolveIf, as in IMAX,shareholder class actions for common-law misrepresentation are allowed to proceed even if plaintiffs cannot plead reliance, Canadian courts can expect to see many more such cases filed in coming months and years.
In any event, even if an appellate court later rejects IMAX’s reason- ing on class certification, its statutory-leave opinion can still be expected to See Julius Melnitzer, Reliance Fight Brewing in Securities Cases, Financial Post (Apr. 21, 2010).
have far-reaching ramifications. By setting a low bar for plaintiffs seeking leave to bring statutory-misrepresentation claims, Canadian courts will beall the more hospitable to securities cases.
In 2008, the British Columbia Supreme Court handed down Pro-Sys Consultants Ltd. v. Infineon Technologies AGrefusing to certify a class of con-sumers of a computer-memory chip cal ed DRAM that included indirect purchasers. The court held that because causation could not be established on a class-wide basis, a class proceeding was not the preferable procedure for adjudicating the plaintiffs’ claims. Similarly, the British Columbia Su-preme Court refused to certify classes in Steele v. Toyota Canada Incand Harmegnies v. Toyota Canada Inc.holding that the need for individual proof of loss eliminated any advantages of class adjudication.
If the trial court decision in Pro-Sys Consultants suggested that Cana- dian courts would impose Wuttennee- and Dow-style standard tightening in competition cases, the British Columbia Court of Appeadelivered a disil- lusioning message last yearUnanimously reversing the trial court’s deci- sion, the Court of Appeal held that although “[t]he burden is on the plain-tiff to show ‘some basis in fact’ for each of the certification requirements, in conformity with the liberal and purposive approach to certification, the evidentiary burden is not an onerous one – it requires only a ‘minimum evidentiary basis,’” and the plaintiffs had “met the low threshold.Inparticular, the court said that plaintiffs could use statistical evidence to prove aggregate class-wide damages, including damages suffered by indirect Similar to the court structure in New York state, the British Columbia Supreme Court is the trial-level court, and the Court of Appeal is the province’s highest court.
Pro-Sys Consultants Ltd. v. Infineon Technologies AG,  B.C.C.A. 503.
Id. ¶ 23 (internal citations omitted).
purchasers.A class proceeding, according to the Court of Appeal, was the proper procedure for the case, because the British Columbia Class Pro-ceedings Act should be liberally construed to promote its goals of access to justice, behavior modification and judicial economy.The Supreme Court of Canada denied the defendants’ application for leave to appeal the Court of Appeal’s decision on June 3, 2010effectively making that opinion, inthe words of one observer, “the leading appellate authority on the certifica- tion of antitrust class actions in Canada.” This liberalizing trend continued in Irving Paper v. Atofina Chemicals, Inc., in which the Ontario Superior Court certified a class in a price-fixingcase that included both direct and indirect purchasersThe court certified the Irving Paper class even though causation and damages were not common to all class members. With respect to causation, the court held that the cer- tification standards did not require the plaintiffs to show that every possibleclass member was harmed by the price fixing. With respect to damages, the court held that the indirect purchasers could be included in the plaintiff class because “a methodology may exist for the calculation of [their] dam- See Pro-Sys Consultants Ltd. v. Infineon Technologies AG,  CarswellBC 1361 (S.C.C.)(WL).
Blakes, Cassels, & Graydon, LLP, Class Actions – Direct and Indirect Purchasers Gain Leve-rage in Certification of Competition Cases, 2010 WLNR 11674532 (June 8, 2010).
 89 OJ No. 4021 (Ont. S.C.J.). See Michael Brown, Possible Change in the CanadianLandscape For Price-Fixing Class Action Certification, Mondaq Business Briefing, Gale Doc.
No. A213327124 (Dec. 2, 2009).
Irving Paper,  89 OJ No. 4021, ¶ 143; see Chadha v. Bayer,  63 OR (3d) 22 (Ont.
C.A.) (reversing certification and holding that damages are essential to a non-contractual price-fixing claim and would require individual inquiry into damages). But see Cassano v. TorontoDom. Bank,  87 OR 3d 401, ¶¶ 36-38 (C.A.) (holding that certification of a class in a price-fixing action alleging claims for breach of contract and restitution was proper even without prov-ing aggregate damages); Markson v. MBNA Bank,  85 OR 3d 321 (C.A.) (same); 2038724Ont. Ltd. v. Quizno’s Canada Rest. Corp.,  96 OR 3d 252 (Div. Ct.) (same), aff’d, 2010ONCA 466.
On June 8, 2010, the Divisional Court denied the defendants’ re- quest for leave to appeal the Irving Paper class certification ordeThejudge indicated that she disagreed with the certifying court’s characteriza- tion of the governing precedents, but “concluded there [was] no good rea- son to doubt the correctness of the certification order and [that] there is no conflicting decision,making review inappropriate under the stringentstandard for granting leave to appeal In sum, recent Canadian court pronouncements on class certification standards are somewhat difficult to reconcile, and it remains to be seenwhether new authorities wil develop along substantive lines (i.e., the type of case) or jurisdictional lines (i.e., the province in which the case is brought). If the lines of authority develop substantively, there is room for cautious optimism in the pharmaceutical-tort context that the Propulsid andVioxx cases represented the high-water mark for generic causation-based classes. In the competition context, however, the courts are trending to- ward an increasingly liberalized view of class-certification standards. The uncertainty caused by IMAX in the securities-fraud context is also causefor concern.
If class certification standards develop along jurisdictional lines, that could portend many unfortunate consequences for Canadian business and for the judicial system. Among other things, plaintiffs’ counsel are likely toengage in rampant forum shopping, targeting their filings in those provin- cial courts that seem more willing to certify cases for class treatment. It is too early at this point to identify which provinces wil be viewed as the most hospitable to class proceedings, but we can already predict, for exam-ple, that plaintiffs’ counsel will avoid filing mass-tort pharmaceutical cases in Saskatchewan, and, if possible, will steer clear of Newfoundland in filing Irving Paper, 2010 CarswellOnt 3898, ¶ 3 (Ont. S.C.J.) (WL).
See Rules of Civil Procedure, R.R.O. 1990, Reg. 194, s. 62.02(4) (Can.).
toxic-tort cases. Meanwhile, securities claimants can be expected to favor Ontario courts, depending on how the IMAX-Gammon split is resolved.
U.S. Attorneys: Is the Welcome Mat Out?
For years, some observers have expressed concern that the U.S.
plaintiffs’ bar will begin opening offices in Canada to pursue class proceed- ings in that forum, much as they have done in some European Unionmember states. The recent case law suggests that while Canadian courts were initially frosty to U.S. attorneys, attitudes are warming.
In 2008, the British Columbia Supreme Court handed down Char- trand v. General Motors Corp.a decision refusing to certify a class of pick-uptruck owners who alleged that their trucks’ parking brakes were defective and sought repair costs. In rejecting certification, the court voiced concern that the proposed representative plaintiff had been recruited by class coun- sel and was not an active, decision-making participant in the litigation. Thecourt was particularly distressed by the presence of U.S. attorneys on the Concerns also arise when American counsel are involved in proposed Canadian class proceedings.
The nature of the involvement is relevant. Law- yers from other jurisdiction[s] may be able to act as consultants. It is a different matter if they are in some way underwriting the litigation and ob-taining a potential benefit from it. A representa- tive plaintiff must have competent counsel in order to fairly and adequately represent the in- terests of the class. The court, as part of its rolein a class proceeding, supervises class counsel to ensure that counsel is acting in the interests of the class. The court is not in a position to su- pervise the actions of or participation of counsel However, times may be changing – and changing quickly. In Octo- ber 2009, the Ontario Superior Court gave a warmer welcome to U.S. at- torneys when it granted “carriage”of a class action against Timminco Ltd.,a Canadian metals producer, to Canadian firm Kim Orr Barristers, which had partnered with Milberg LLP, the famous U.S. plaintiffs’ firmIn se- lecting Kim Orr for the lead role, the Court clarified its understanding that Milberg would serve in a limited capacity, providing Kim Orr strategic ad-vice and investigation and document-management services The court also clarified its understanding that Kim Orr would pay for Milberg’s services directly, and that Milberg would not have a direct claim on any damages awardThe same court previously had rejected theinvolvement of a U.S. firm in a Canadian class proceeding when the U.S.
firm intended to fund the litigation and share in any fees that ultimately were awardedThe limited nature of Milberg’s role may have played an Id. ¶ 106 (citing Poulin v. Ford Motor Co. of Canada Ltd./Ford du Canada Ltée,  35 CPC(6th) 264 (Ont. S.C.J.) ¶¶ 87-94).
“Carriage” means that the court selects a particular law firm to be lead class counsel.
Mary Jane Stitt, Court Rules Direct Involvement Of U.S. Firm In Canadian Class Action Accept-able, Mondaq Business Briefing, Gale Doc. No. A2127117917 (Nov. 19, 2009).
That Kim Orr wanted the benefit of Milberg’s experience in discovery-intensive U.S. cases saysmuch about Canadian plaintiffs’ firms desire to use discovery as a litigation tool, as their U.S.
counterparts do. This is notable in light of a 2009 amendment to Ontario’s rules of civil proce-dure that sought to restrict the scope of permissible discovery. Amended rule 30.02 now permitsparties to discover documents “relevant to any matter in issue,” instead of the older “relating toany matter in issue.” The drafters’ intent in making this subtle change was to narrow the scope ofdiscovery to core relevant documents. See Ontario R. Civ. P. 30.02, R.R.O. 1990, Reg. 194.
Sharma v. Timminco Ltd.,  99 OR 3d 260, ¶ 78 (Ont. S.C.J.). But see Canadian Underwri-ter.ca, Daily News (Sept. 30, 2010) (quoting a source claiming that Kim Orr was actually being“funded monetarily” by Milberg, rather than the inter-firm billing arrangement that the Timmincocourt had envisioned).
Poulin v. Ford Motor Co. of Canada, 2006 CanLLI 38880 (Ont. S.C.J).
important part in the court’s decision and created a model for the involve- Timminco did not go unnoticed on either side of the 48th Paral el.
According to published reports, several U.S. plaintiffs’ firms reportedly met with their Canadian counterparts in 2009, and Canadian firms have been recruiting U.S. class action colleagues to assist them with bringing cases inCanada.
Who’s Paying for It?
Recent decisions about who should pay for class litigation have been a mixed bag: Canadian courts have recently affirmed the loser-pays prin-ciple, but they seem open to third-party funding arrangements.
In 2007, the Supreme Court of Canada handed down Kerr v. Danier- Leather,in which it held that the traditional “loser-pays” rule applies to class proceedings under the Ontario Class Proceedings Act 1992Kerr issignificant because the court held that Ontario law permitted a court to re- quire unsuccessful named plaintiffs to pay certain of the defendants’ costs, even though those plaintiffs’ claims were at least colorable and the ruling dismissing them made new laIn this respect, Kerr rejected the Albertaand New Brunswick provincial policies of not imposing costs when the representative plaintiffs’ claims are premised on novel theories. Kerr simi- larly rejected the practices in British Columbia, Manitoba, Newfoundland, and Saskatchewan of imposing costs against representative plaintiffs onlywhere there has been abusive, vexatious, or frivolous conduct. In the Kerr opinion, the Supreme Court recognized that class proceedings could lead to Stitt, Court Rules Direct Involvement Of U.S. Firm In Canadian Class Action Acceptable.
Julie Triedman, New Players at the Table, The American Lawyer, 40, 44 (Aug. 2009).
Id. ¶ 65 (citing Class Proceedings Act, S.O., ch. 6 (1992) (Can.), § 31(1)).
The Ontario law provided that when determining whether to award costs against a representativeplaintiff, “the court may consider whether the class proceeding was a test case, raised a novelpoint of law or involved a matter of public interest.” Class Proceedings Act, S.O., ch. 6 (1992)(Can.), § 31(1).
abusive litigation, noting that “protracted litigation has become the sport of kings in the sense that only kings or equivalent can afford it.The Courttherefore concluded that “regard must also be had to the situation of the respondents/defendants who have incurred the costs.
Without question, the loser-pays rule, as articulated in Kerr, is an ef- fective safeguard against abusive litigation. Kerr’s salutary effects may bediluted, however, by what appears to be Canada’s growing acceptance of third-party litigation funding. In Meltzer Investment GmbH v. Gildan Active- ware Inc., the Ontario Superior Court rejected a proposed third-party fund- ing agreement, but held that such agreements were not per se champertousor otherwise against public policyThe court held that the arrangement in the Meltzer case was unlawful because the funder’s recovery would have been a fixed percentage of any damages award, regardless of the amount of money advanced to plaintiffs, the risk to the funder, or the amount of timethe lawsuit was pending. The court suggested, however, that a litigation- funding arrangement that calculated recovery based on these elements In 2009, the Court of Queen’s Bench in Alberta had the dubious dis- tinction of becoming the first Canadian court to approve a private third- party funding agreement. In Hobsbawn v. Atco, the court approved an agreement to fund a representative plaintiff’s legal fees in a class proceed- ingIn light of the court’s decision, BridgePoint Financial Services Inc.,the funding company in Hobsbawn, is reportedly exploring numerous other funding opportunities in CanadaThe judicial reactions to these early third-party funding cases could greatly influence the frequency with which class actions are filed in Canadian courts.
Julius Melnitzer, Courts Pave Way for More Class Actions; 3rd-Party Help, Legal Post, FP10(Oct. 7, 2009).
2009 saw unprecedented levels of class-action activity in Canada.
Over the last two years, the Chief Justice of Canada, the Chief Justice of Ontario, and Ontario’s leading class action judge al issued opinions calling for expanded use of class proceedings to promote access to justiceAndthey are likely to get their wish. Although the “certify-all-classes” tendency of Canadian courts was tempered recently by significant rulings in the product-liability and toxic-tort arenas, the other recent developments dis- cussed in this article (including liberalized certification standards in securi-ties-fraud and competition cases, cross-border al iances among law firms, and the acceptance of third-party funding in class proceedings) suggest that the volume of class actions filed in Canadian courts may grow exponential- There may, however, be a bright spot on the horizon in Ontario. In January 2010, an amended Rule 20 of Ontario’s Rules of Civil Procedure, which governs summary-judgment motions, came into effectUnder theamended rule, Ontario judges are permitted to weigh evidence submitted by defendants who have sought summary judgment. A number of observ- ers in Canada believe this will empower courts to dismiss purported class proceedings on questionable claims before the class-certification stage.
Given Ontario’s generally permissive class-certification requirements, ob- servers expect defense attorneys to use the new summary-judgment rule frequently to attempt to shut down class proceedings before they are certi- fiedIt remains to be seen, however, how Ontario judges apply the re-vised rule.
Triedman, New Players at the Table, at 40-41.
See Ontario R. Civ. P. 20, R.R.O. 1990, Reg. 194.
See Daryl-Lyn Carlson, New Class Action Rules Get Mixed Reviews From Law Firms, FinancialPost (February 24, 2010).
C O R R E S P O N D E N C E the study. I concur that allergy shots may be more usefulin patients in the real world who tend to have lower levelsof compliance with pharmacotherapy. American College of Allergy, Asthma and Immunology 1. Adkinson NF Jr, Eggleston PA, Eney D, et al. A controlled trial of im- munotherapy for asthma in allergic children. N Engl J Med 199