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McCarthy Tétrault LLP / mccarthy.ca / February 9, 2012 / Doc ID #11150233

HOT TOPICS IN CLASS ACTIONS

Defending Class Actions in Canada,3rd Edition

February 9, 2012

McCarthy Tétrault Advance™Building Capabilities for Growth


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SESSION 1

Class Actions –The Big Picture British Columbia In Flux

Andrew Wilkinson, Q.C.


315 Years of Class Actions in BC

¬ BC was early in Canada (1996)¬ Class Proceedings Act provides for rep plaintiff to

apply to “certify” entire class¬ Sometimes defendants like to be certified to

ensure capture of all claims¬ QC process (“authorization”) very different, with

no appeal for defendants


4Certification Criteria

¬ Cause of Action (including novel claims)¬ Identifiable class¬ Common issues¬ Preferable procedure¬ Rep plaintiff adequately represents class¬ Workable litigation plan

US criteria are more restrictive than Canadian


5Role of BC in Canadian Class Actions

¬ “National” classes still controversial in Canada ¬ BC was a local market until recently - “opt out”

made ON and QC more attractive to plaintiffs¬ BC now seen as more plaintiff friendly

¬ ? lower thresholds for certification¬ Organized plaintiff bar means co-ordinated

actions across Canada¬ US actions often lead by example


6Proposed Amendments to B.C. Class Proceedings Act¬ Only BC, NB and NF are “opt in”¬ SK and AB changed to “opt out”¬ CBA proposes that BC change to “opt out”¬ With no costs against plaintiffs, would make BC

attractive to national class plaintiffs


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SESSION 2

Winning the war before it begins: Pre-certification strategies

Miranda Lam


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9You’ve been sued … now what?

¬ Legal considerations:¬ Choice of defence counsel¬ Defeating the claim on a preliminary basis

¬ Jurisdiction¬ Other dispute resolution mechanisms¬ Nature of the claim¬ Opposing certification

¬ Defence on the merits¬ Settlement


10Preliminary Steps: Challenge Jurisdiction

¬ In British Columbia, only residents are automatically included in the class unless they opt out

¬ Issues:¬ Conflict of laws

¬ Court Jurisdiction and Transfer of Proceedings Act¬ “real and substantial connection” codified

¬ Constitutional: can provincial legislation have extra-provincial effect?

¬ Practical and strategic implications


11Preliminary Steps: Challenge the Dispute Resolution Mechanism¬ Mandatory Arbitration

Where the subject matter of the proposed class action is an agreement or relates to one, and the agreement contains an arbitration clause requiring that any disputes under it be resolved by arbitration, a defendant may be entitled to apply to have any court proceedings stayed.N.B. Breaches of consumer protection legislation are not subject to arbitration.


12Preliminary Steps: Challenge the Nature of the Claim¬ Cause of action¬ Motion for particulars¬ Security for costs¬ Summary judgment and summary trial


13Oppose Certification

¬ OPPOSE:¬ Failure to meet criteria¬ Incomplete pleadings¬ Substantive defence on

the merits¬ Strategic positioning

¬ CONSENT:¬ Strong case on the merits¬ Conditional consent as

precursor to settlement¬ Significant individual

claims that would be costly to defend separately

¬ Leverage¬ Appetite and resources to

litigate


14Avoiding Class Actions

¬ Robust Risk Management¬ Review processes and policies associated with

handling customer complaints and identification of issues

¬ Review internal policies to ensure currency and responsiveness (HR, safety, environmental, confidentiality)

¬ Consistent communication – internal and externally

¬ Agreements¬ Mandatory arbitration clauses?


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SESSION 3

Trends in B.C. Class Actions:Our World Is Changing

Jill Yates


16Types of Claims are Changing

¬ BPCPA – BC’s consumer protection legislation¬ Various benefits for plaintiffs, including:

¬ aggressive remedies in some cases¬ insulation from arbitration in some cases

¬ Waiver of Tort¬ either cause of action or remedy¬ various benefits for plaintiffs

¬ Plaintiffs looking for opportunities to plead both of these


17Certification Standards are Changing

¬ Getting tougher to get certified in US¬ Easier to get certified in Ontario¬ Easier to get certified in B.C.

¬ Many courts are not strict about the requirements of the CPA

¬ e.g. Wakelam v. Johnson & Johnson et al.¬ e.g. Steele v. Toyota Canada Inc.

¬ Courts are taking a “certify now, worry later”approach


18Scope is Changing

¬ National/Cross-border classes are becoming more common, including in B.C.¬ The majority of our class actions are part of/

extensions of/ copies of claims in other jurisdictions

¬ It has been proposed that B.C.’s legislation be amended to allow for national classes

¬ Working toward a Judicial Cooperation Protocol in Canada


19How We Defend is Changing

¬ Courts have stated that it may often be appropriate for defendants to file a defence before certification – and some judges are requiring it

¬ Some courts are allowing pre-certification motions (e.g. pleadings, summary trials)

¬ Certification is no longer the end of the litigation process in a class action – cases are increasingly continuing beyond certification and some are going to trial


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SESSION 4

Class Action Quirks:Limitations Periods in “Trust” Claims

Aggregate DamagesAND Contribution after Settlement

Warren Milman


21Limitation Periods

¬ Most Provinces: 2 years, subject to “discoverability”

¬ BC – Special case for claims seeking disgorgement of “trust funds” (e.g., waiver of tort)

¬ Law reform: relief is in sight?


22Aggregate Damages

¬ Traditional rule – can’t use CPA to create new substantive liability

¬ New rule: CPA allows class-wide damages to be aggregated so that class members need not show loss or injury

¬ Punishment vs. compensation ¬ Cy-prés awards


23Contribution- is settlement really the end?

¬ Rights of contribution for joint and several liability¬ Bar orders and covenants not to sue¬ Conspiracy claims?

VANCOUVERSuite 1300, 777 Dunsmuir StreetP.O. Box 10424, Pacific CentreVancouver BC V7Y 1K2Tel: 604-643-7100 Fax: 604-643-7900 Toll-Free: 1-877-244-7711

CALGARYSuite 3300, 421 7th Avenue SWCalgary AB T2P 4K9Tel: 403-260-3500 Fax: 403-260-3501 Toll-Free: 1-877-244-7711

TORONTOBox 48, Suite 5300Toronto Dominion Bank TowerToronto ON M5K 1E6Tel: 416-362-1812 Fax: 416-868-0673 Toll-Free: 1-877-244-7711

MONTRÉALSuite 25001000 De La Gauchetière Street WestMontréal QC H3B 0A2Tel: 514-397-4100 Fax: 514-875-6246 Toll-Free: 1-877-244-7711

QUÉBECLe Complexe St-Amable1150, rue de Claire-Fontaine, 7e étageQuébec QC G1R 5G4Tel: 418-521-3000 Fax: 418-521-3099 Toll-Free: 1-877-244-7711

UNITED KINGDOM & EUROPE125 Old Broad Street, 26th FloorLondon EC2N 1ARUNITED KINGDOMTel: +44 (0)20 7786 5700 Fax: +44 (0)20 7786 5702


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