The Ontario government’s recent announcement of proposed changes to Ontario’s class proceedings legislation bodes well for defendants and their insurers. If the amendments become law, they would provide greater latitude to defendants seeking to narrow or dismiss claims prior to certification, make certification a somewhat steeper hill for class counsel to climb, and provide mechanisms to prevent duplicative multi-jurisdictional class actions from proceeding in Ontario. Details of certain of these proposed changes include the following:

Early dismissal motions and dismissal for delay

Prior to the motion for certification, motions by defendants that may dispose of the proceeding in whole or in part or narrow the issues to be determined would be permitted. Currently, Ontario courts tend to discourage motions of this nature prior to certification. This is a welcome change for defendants. As well, a proceeding could be dismissed if, by the first anniversary of the day on which the proceeding was commenced, the representative plaintiff has failed to file a final and complete motion record for certification.

A stricter test for certification

The amendments provide that certification will only be granted if “the questions of fact or law common to the class members predominate over any questions affecting only individual class members”.  This test would more in line with the test for certification applied in the United States, which requires a predominance of the common issues over individual issues. These changes may create additional obstacles to plaintiffs seeking certification in cases involving significant individual issues.

Determining preferable forum for multi-jurisdictional class actions

If a class proceeding has been commenced in a Canadian jurisdiction other than Ontario involving the same or similar matters and some or all of the class members, the court will be required to determine whether it would be preferable for some or all of the claims or common issues of the class members to be resolved in the proceeding commenced in the jurisdiction outside of Ontario.  This will avoid the expense of duplicative class actions proceeding in Ontario and another province.

Appealing certification orders

Defendants and plaintiffs will be able to appeal certification orders directly to the Court of Appeal, instead of first having to appeal to the Divisional Court, and then seek leave to appeal to the Court of Appeal. This will save the cost of appeals to the Divisional Court.

Third-party funding

Third party funding agreements would require approval by the court based upon specified criteria and on notice to the defendant. A defendant would be able to recover a costs award made against the representative plaintiff directly from the funder, to the extent of the indemnity provided under the approved funding agreement.