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Hotly Debated Second Reading of the Proposed Amendments to the Class Proceedings Act, 1992

9 minute read

On December 9, 2019, the Attorney General, Doug Downey, unveiled Bill 161, “An Act to enact the Legal Aid Services Act, 2019 and to make various amendments to other Acts dealing with the courts and other justice matters.” The Bill has been referred to by its short title “Smarter and Stronger Justice Act,” and had its hotly debated second reading last week.

Among the many legislative changes is Schedule 4 containing the amendments to the Class Proceedings Act, 1992 (the “CPA”), the statute governing class actions in Ontario. The CPA has not been amended since it came into force. On July 17, 2019, the Law Commission of Ontario (the “LCO”) released its Class Actions Report (the “Report”). The Report included 47 recommendations to reform the CPA and the practice of class actions law in Ontario. We commented on the release of the LCO report in an earlier blog.

Some, but not all, of the LCO’s recommendations were proposed to be adopted by the Attorney General in Bill 161. However, many of the LCO’s recommendations are absent from the government’s proposed amendments, including:

  • the LCO’s recommendation to provide for a no-costs regime for certification and ancillary motions.
  • the LCO’s recommendations regarding the Class Proceeding Fund partially funding legal fees;
  • the LCO’s recommendation to give the court discretion to appoint amicus curaie; and
  • the LCO’s recommendation that a first case management conference be held within 60 days of the last defendant being served with a statement of claim.

Some of the notable proposed amendments include:

  • Registration: to add a requirement to register proceedings commenced under the Act in accordance with the regulations made under the Act.
  • Multi-Jurisdictional Class Proceedings: to take into account multi-jurisdictional class proceedings and proposed multi-jurisdictional class proceedings commenced in Ontario or elsewhere in Canada.
  • Carriage: A new section 13.1 addresses carriage motions. If there are multiple proceedings under the CPA involving the same or similar subject matter and some or all of the same class members, the court may permit one to proceed and stay the others, as well as bar new proceedings under the Act involving the same or similar subject matter and some or all of the same class members from being commenced without leave. In addition, if there is an existing proceeding under the Act, a proceeding involving the same or similar subject matter and some or all of the same class members may not be commenced under the Act without leave if more than 60 days have passed since the existing proceeding was commenced.
  • Early Resolution of Issues: A new section 4.1 addresses the early resolution of issues. If, before the hearing of the motion for certification, a motion is made under the rules of court that may dispose of the proceeding in whole or in part, or narrow the issues to be determined or the evidence to be adduced in the proceeding, that motion shall be heard and disposed of before the motion for certification, unless the court orders that the two motions be heard together.
  • Common Issues Predominate Over Individual Issues: A new section 5(1.1) would amend the certification requirements to change the law on the “preferable procedure” requirement in Ontario. Under the new section, a class proceeding is the preferable procedure for the resolution of common issues under section 5(1)(d) only if, at a minimum, (a)  it is superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant, including, as applicable, a quasi-judicial or administrative proceeding, the case management of individual claims in a civil proceeding, or any remedial scheme or program outside of a proceeding; and (b)  the questions of fact or law common to the class members predominate over any questions affecting only individual class members.
  • Notice: Changes are made to sections 17 to 19 respecting the requirements of notices under the Act, and section 20 is changed to require the notices to be written in English and in French, and in a plain language manner. Section 22 is amended to provide that the costs of a notice of certification may be awarded to a representative plaintiff only in the event of success in the class proceeding.
  • Settlements: A new section 27.1 addresses settlements, and specifies new requirements respecting the seeking of court approval of the settlement of a proceeding under the Act or in relation to the common issues affecting a subclass. The section authorizes the court to appoint a person or entity to administer the distribution of settlement funds. The person or entity who administers the distribution of settlement funds is required to file a report respecting the distribution with the court.
  • Cy Près Awards: A new section 27.2 addresses distribution of awards under section 24 and of settlement funds on a cy-près basis, including providing for when the court may make an order authorizing such distribution and specifying to whom the distribution may be made.
  • Mandatory Dismissal for Delay: A new section 29.1 provides for a process for dismissing a proceeding commenced under the Act for delay, if the specified criteria are met.
  • Appeal of Certification Orders: Section 30 is amended to change the appeal route on certification so that (1)  A party may appeal to the Court of Appeal from an order, (a)  certifying or refusing to certify a proceeding as a class proceeding; or (b)  decertifying a proceeding. Under the current legislation, some (but not all) appeals of certification are to the Divisional Court.
  • No Amendments of Materials on Appeal: Included in the amendments to section 30 under 30(2), the appellant may not materially amend the notice of certification motion, pleadings or notice of application on an appeal of an order refusing to certify a proceeding as a class proceeding, except with leave of the court in exceptional or unforeseen circumstances.
  • Third Party Funding Agreements: A new section 33.1 addresses rules respecting third-party funding agreements, which are contingent on court approval.

The Rigorous Debate at the Second Reading

Since the initial release of the proposed amendments, the legal community has been quick to comment on the possible repercussions. The second reading of the Bill resulted in a rigorous debate by MPPs on the proposed amendments and specifically their impact on class actions. MPP Gurratan Singh observed:

Class actions are an incredibly important tool for access to justice and a democratic society, and we should be upholding that right. But as stated earlier, this bill will make it harder to carry out class actions, a right that is fundamental to everyday people standing up to those who have greater resources and greater power.

Notably, the MPP from Brampton East highlighted the criticism the Bill has faced from the legal community in the media. The debate referred to the LCO’s letter to the Attorney General dated January 22, 2020 addressing the LCO’s concerns with the Bill as currently drafted. The letter, authored by Andrew Pinto, the Chair of the Board of Governors of the LCO notes, “…Bill 161 also includes amendments to the Class Proceedings Act certification provisions that are likely to significantly reduce access to justice and worsen class action delays, inefficiencies and costs.” The LCO letter is critical of the proposed amendments to the certification requirements that may arguably make certification harder for the plaintiff to obtain. Ultimately, the LCO was unable to support the Bill as currently drafted.

As the debate continued, the discussion turned to a Law Times article authored by Anita Balakrishnan on January 8, 2020 noting that Ontario would take a step backward with the proposed class action changes. The article includes critical comments from across the class actions bar, featuring both plaintiff and defence counsel and notable class actions scholar Jasminka Kalajdzic, one of the authors of the LCO’s Report, and the professor behind University of Windsor’s Class Actions Clinic (for a discussion on the Clinic see our earlier blog). With respect to the Law Times’ article MPP Gurrant Singh highlighted, “So what we see right now is legal experts, people from the Law Commission of Ontario, we see folks across the board coming together, different lawyers, all saying that there are huge problems with Bill 161 with respect to its impact on class actions.”

On the other side of the debate, MPP Goldie Gharmi commented:

The Class Proceedings Act has not been looked at or reviewed for over 25 years, and within our consultations that we did, there was widespread consensus among the business and legal communities that the act should be modernized.

Ultimately, the proposed amendments that we’re making to class action reforms would promote better access to justice and transparency for class members by requiring proposed settlements to be fair, reasonable and in the best interests of the class. It would enhance transparency regarding settlement and award distributions. It would establish new statutory guidance related to approval of lawyers’ fees, including new criteria to ensure that fees are fair and reasonable. A lot of times in class action suits, it’s a private contract, and ultimately lawyers can get what they want.

Ultimately, the changes and amendments we’re making are to safeguard those rights and to ensure that they’re more accountable and transparent.

As MPP Suze Morrison pointed out, “Class action lawsuits deliver justice for the little guy by helping individuals who have been hurt to join together and take on Goliath.”

The rigorous debate at the Bill’s second reading demonstrates the importance of the proposed amendments not only on class actions procedure but to the fundamental principles of access to justice. The class actions bar will have to pay close attention to this debate and may wish to provide comments to the Attorney General’s office or local MPPs on the proposed amendments as they continue to be considered and debated.

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