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Home Our Services Resource Centre Class Actions in British Columbia: A Brief Primer

Class Actions in British Columbia: A Brief Primer

By Clark Wilson's Class Actions Group

This is intended to provide a very brief historical overview of class actions in BC, and to describe briefly the procedural steps normally required in a class action in British Columbia. For more detailed information, please contact Barry Fraser ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ) or Derek Mullan ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it ).

Brief History

The BC Class Proceedings Act (the "CPA") came into force August 1, 1995. In February, 2005, the BC Deputy Attorney-General reported that approximately 230 proposed class actions had been filed since August 1, 1995, and of those approximately 135 cases had been assigned to judges for case management.1 Many of the actions filed have not been pursued. Sometimes the reason is that a parallel action in Ontario is being prosecuted, and the BC action lies dormant, or is discontinued or abandoned (which can be done without leave of the court).2 In the light of the ability of Ontario judges to certify national classes on an opt-out basis, the BC cases brought forward for certification are still largely confined to claims involving mostly (or exclusively) BC residents.

Research3 indicates that, as of September, 2007, approximately 93 cases had reached a decision on certification in BC. Out of 57 cases where certification was contested, certification was granted in 35 (a number of which have subsequently been settled in whole or in part). There have been about 30 consent certifications, 24 of which were certified for settlement. Six certified cases have proceeded to trial.4 In four of these cases, the court ruled in the defendant's favour.

The BC Court of Appeal has considered certification issues on a number of occasions, and can probably be described as "certification friendly." For the most part, appeals have been dismissed. Orders refusing certification at first instance have been reversed in several cases.5 As of January, 2008, there are only three cases where the Court of Appeal allowed a defendant's appeal against certification.6

In 2004, the 5-judge panel of the BC Court of Appeal was asked to consider whether claims made by a single named plaintiff against defendants where the plaintiff clearly had no personal cause of action should be struck out as disclosing no reasonable cause of action against those defendants. The Court of Appeal dismissed the motion to strike, and allowed the action to stand against all defendants.7 The Court of Appeal refused to follow Ontario appellate authority, which requires a named plaintiff with a personal cause of action for each defendant named. To date, Alberta and Québec are following Ontario; Saskatchewan appears to be following BC.

In cases where there are a large number of individual issues, the BC Court of Appeal has endorsed the approach of restricting the common issues in order to maintain the desirability of a class proceeding.8 This was done in Harrington v. Dow Corning Corp.9 (breast implant class action), where common issues that had been certified in the U.S. and Ontario were rejected, in favour of a single common issue: was the product reasonably fit for its intended purpose.

In another case involving allegedly defective toilet tanks,10 the court rejected a list of more specific questions in favour of a single question: was the defendant negligent in the manufacture and distribution of toilet tanks over an 11 year period. The court also certified a question whether the defendant was guilty of conduct that justified an award of punitive damages. Despite developments since 1996 in the substantive law concerning punitive damages, this case is still cited and followed regularly as authority that "punitive damages" &ndash including the amount to be awarded – can be certified as common issues.11

Early pronouncements from the BC Court of Appeal indicated that it was sufficient for certification if a common issue or issues could be identified the determination of which would simply "move the litigation forward."12 This observation was made in the specific context of the CPA, where the question whether issues are common is relatively narrow, and predominance of individual issues over common issues is not relevant to the question whether common issues can be identified.13

A "trilogy" of decisions released by the Supreme Court of Canada in 2001 provided essential guidance concerning the analysis and application of the certification criteria.14 Judges were urged not to take an overly restrictive approach to class action legislation, but rather to interpret it in a way that gives full effect to the benefits foreseen by the drafters: judicial economy, access to justice and behaviour modification. "Preferable" was meant to capture two ideas: first, whether a class action would be a fair, efficient and manageable method of advancing the claim; and second, whether a class action would be preferable to other procedures such as joinder, test cases and so on. Whether a class proceeding is preferable must take into account the importance of the common issues in relation to the claims as a whole, including any individual issues that would have to be determined. Whether an action should be allowed to be prosecuted as a class action necessarily turns on facts specific to that particular case.

Unlike the Ontario Class Proceedings Act, the CPA specifically directs that the court must consider whether common issues predominate over individual issues as a factor in assessing preferability. The BC Court of Appeal has held that the court must assess whether a class proceeding would advance the claims in any meaningful way. If resolution of the common issues goes a considerable measure toward obtaining relief for the class members, then certification promotes the goals of judicial economy and improved access to the courts.15

Recent decisions from the Ontario Court of Appeal16 have encouraged plaintiffs' counsel to request certification of an "aggregate assessment" common issue – i.e., whether damages for the class can be assessed on an aggregate basis – to counter defendants' arguments that a class proceeding is not preferable because individual issues overwhelm common issues. These decisions complement observations by BC judges that one of the reasons class proceedings are preferable is because of the practical advantages available under the Act, including the ability to create simplified structures and procedures.17

Procedure Under the CPA

Under the CPA, an action is commenced as a proposed class action. It is not a "class proceeding" until the action has been certified as such. The British Columbia Rules of Court apply to class proceedings to the extent that the Rules are not inconsistent with the CPA.

Appearance and Statement of Defence

The first step normally taken by a defendant when duly served with process is the filing of an appearance. The time to file an appearance depends on whether the defendant has been served within or outside the jurisdiction. A defendant served in BC has 7 days (not counting the day of service) to file an appearance. The time for filing an appearance is 21 days if the defendant resides and was served anywhere in Canada outside BC, 28 days in the case of a person residing in the U.S., and 42 days in the case of a person residing elsewhere.

Under the Rules, a statement of defence is to be delivered within 14 days from the time limited for appearance or from the delivery of the statement of claim, whichever is later.

Currently, there is no consistent practice in BC concerning the filing of a statement of defence before the application certification. Some plaintiffs' counsel are content to grant indefinite extensions, and will not require a defence prior to the hearing of the application for certification. The BC Court of Appeal has clarified that whether a statement of defence should be filed in advance of the certification application is to be left to the case management judge.18 If certification is being opposed, a well drafted statement of defence can be a very useful tool – supporting the evidentiary record – in opposing certification. Judges have occasionally criticized defendants for not having filed a statement of defence prior to the certification application, pleading the issues the defendants were arguing made the case inappropriate for certification.19

The BC Court of Appeal has also given encouragement to defendants who are interested in early disposition of claims on the merits, without incurring the very significant time and expense associated with a certification application.20 A defendant who wishes to bring a summary trial application in advance of certification must file a statement of defence.

The statement of claim should be analyzed thoroughly. A defendant should consider carefully, and in the light of its overall goals and objectives with respect to the litigation, whether causes of action have been properly pleaded, whether particulars should be demanded, and whether it is appropriate to apply to strike out parts or all of the statement of claim.

Challenges to Jurisdiction

A defendant served outside of BC may wish to challenge the jurisdiction of the BC court, or assert that (even if the court has jurisdiction over it) BC is forum non conveniens. Such applications have been brought in a number of proposed class actions.21 The BC court has considered specifically whether such applications should be heard in advance of, or at the same time as, the application for certification, and ruled that both applications should be heard at the same time.22

Appointment of Case Management Judge

Once the pleadings have been closed, or the time for filing the statement(s) of defence has expired, a request can be made to the Trial Co-ordinator for the assignment of a case management judge, who, unless he or she is otherwise unavailable, will hear the certification application and any other applications. This judge may, but need not, preside over the trial of common issues. Once the case management judge is assigned (which can take up to 3 months), plaintiff's counsel generally requests that an initial case management conference be scheduled.

BC does not, as yet, have a designated rota of class actions judges. Thus, a case could be assigned to a judge with considerable, some or no experience case-managing a proposed class action.

The Certification Application

The plaintiff is required under the CPA to make the application for certification:

  1. within 90 days after the later of:
    1. the date on which the last appearance or statement of defence was delivered, and
    2. the date on which the time prescribed by the Rules for delivery of the last appearance or statement of defence expires without its being delivered; or
  2. at any other time, with leave of the court.

However, very often this time is extended by agreement between counsel, or a more relaxed schedule is set by the case management judge.

The requirements for certification (set out in s. 4(1) of the CPA) are that:

  1. the pleadings disclose a cause of action;
  2. there is an identifiable class of 2 or more persons;
  3. the claims of the class members raise common issues, whether or not those common issues predominate over issues affecting only individual members;
  4. a class proceeding would be the preferable procedure for the fair and efficient resolution of the common issues;
  5. there is a representative plaintiff who:
    1. would fairly and adequately represent the interests of the class,
    2. has produced a plan for the proceeding on behalf of the class and or notifying the class members of the proceeding; and
    3. does not have, on the common issues, an interest that is in conflict with the interests of other class members.

The claims of the representative plaintiff(s) do not have to be "typical" of the claims of the class members. If the requirements for certification are met, certification is mandatory.

The CPA goes on to direct the court, in determining whether a class proceeding would be preferable, to consider all relevant matters, including (see s. 4(2)):

  1. whether questions of fact or law common to the members predominate over any questions affecting only individual members;
  2. whether a significant number of the members have a valid interest in individually controlling the prosecution of separate actions;
  3. whether the class proceeding would involve claims that are or have been the subject of any other proceedings;
  4. whether other means of resolving the claims are less practical or less efficient;
  5. whether the administration of the class proceeding would create greater difficulties than those likely to be experienced if relief were sought by other means.

Despite the direction that the predominance of individual issues must be considered as a factor, at least one BC products liability case was certified even though the court found a predominance of individual issues.23 However, that case involved tainted blood products, and there was very strong pressure to find a way to certify. The Court of Appeal has put "predominance" of individual issues over common issues at no higher than a factor to be considered.

The Supreme Court of Canada has clarified that, on the application for certification, it is incumbent on the plaintiff to tender evidence and show some basis in fact for each of the requirements for certification (with the exception of the question whether the pleadings disclose a cause of action). The BC Court of Appeal has confirmed that the evidence must satisfy the normal tests for admissibility.24 A defendant also has the opportunity to tender evidence – which may touch on the merits – to show that the requirements for certification have not been met. Because identification of common issues is a relatively narrow question under the CPA, the key question on certification is usually whether a class proceeding is the preferable procedure in the context of the claims as a whole.

Under the CPA, the application for certification must be supported by an affidavit of the applicant, in which the deponent must:

  1. set out the material facts on which the person intends to rely at the hearing of the application,
  2. swear that the person knows of no fact material to the application that had not been disclosed in the affidavit or in any affidavits previously filed in the proceeding, and
  3. provide the person's best information on the number of members in the proposed class.

If the defendant wishes to deliver an affidavit (or affidavits) in opposition to certification, the same requirements as to contents apply. This is a unique feature of the CPA, and the requirements can be difficult to satisfy properly.

The minimum time per the CPA between delivery to the defendant by the plaintiff of its material in support of the certification application and the date for hearing the application is 14 days, unless the court otherwise orders. Any affidavits in response must be delivered not less than 5 days before the date set for hearing, unless the court otherwise orders. The fixing of dates for delivery and exchange of materials on the certification application, dates for any cross-examination on affidavits, and setting a date for the hearing of the certification application are typically on the agenda for the first case management conference.

There is no consistent practice in BC concerning cross-examination on the affidavits filed on the certification application. There is no cross-examination as of right. If the parties do not agree there will be cross-examination, the party who wants it must apply to the court for an order, and faces an uphill battle.25 One judge who allowed cross-examination (on unusual facts) nevertheless limited the scope of cross-examination by the defendants to those matters set out in s. 4 of the CPA, and did not permit cross-examination on the merits of any proposed common issues, even though the plaintiff's affidavits addressed the merits.26

Class Membership

Under the CPA, BC residents falling within the class description are class members unless they opt out. Non-residents must opt in, in order to be included, and there must be a non-resident sub-class established with an appropriate non-resident representative plaintiff.

Appeal of the Certification Order

Either party can appeal the certification order as of right.

Notice of Certification

The representative plaintiff must give notice of certification to all members of the class, in accordance with directions given by the court. It is not uncommon in BC for a defendant to be ordered to pay the costs of the notice program.

Discovery

Named parties to a class proceeding have the same rights of discovery against one another as they would have in any other proceeding. Under the BC Rules of Court, one party may examine for discovery only one representative of an adverse party as of right. After discovery of the representative plaintiff(s), a defendant may, with leave of the court, discover other class members. In deciding whether to grant leave, the court is required to consider a number of factors, including whether the discovery is necessary in view of the defences, the approximate monetary value of individual claims and whether discovery would result in oppression or undue hardship to the class member.

Determination of Common Issues and Individual Issues

The common issues for the class (or subclass) must be determined together. A judgment on the common issues is binding on all members of the class who have not opted out. If there are then individual issues to be determined, the court may:

  1. determine those issues in further hearings presided over by the judge, or by another judge;
  2. appoint one or more persons to conduct an inquiry and report back to the court; or
  3. with the consent of the parties, direct that those individual issues be determined in any other manner.

Limitation Periods

The provisions in the CPA concerning limitation period were amended in October, 2004 to expand the period during which a limitation period is suspended, to include the period between filing the writ and final determination of the certification application. In effect, under the new provisions, a limitation period for a cause of action asserted in a proposed class action is suspended in favour of persons falling within the class description for the period beginning on the filing of the writ and ending on the date 30 days after the certification application is dismissed without any appeal being brought, or if an appeal is brought of an order granting or refusing certification, that appeal is finally disposed of.

Subject to these new provisions, a limitation period applicable to a cause of action in a proceeding that is certified as a class proceeding is suspended in favour of a class member on the commencement of the proceeding. The limitation period recommences when the class member opts out, an amendment is made to the certification order that has the effect of excluding the class member, a decertification order is made, the class proceeding is dismissed without an adjudication on the merits, the class proceeding is dismissed or abandoned with leave of the court, or it is settled.

Costs

The CPA prohibits costs being awarded to any party to an application for certification (including an appeal) or to a class proceeding, with limited exceptions. The court has a discretion to award costs in respect of the application for certification or any part of a class proceeding or appeal from a class proceeding, but it is limited to:

  1. any time that the court considers there has been vexatious, frivolous or abusive conduct on the part of any party;
  2. any time that the court considers that an improper or unnecessary application or other step has been made or taken for the purpose of delay or increasing costs or any other improper purpose; or
  3. any time the court considers that there are exceptional circumstances that make it unjust to deprive the successful party of costs.

Class members other than the representative plaintiff are not liable for costs except with respect to determination of their individual claims.

Class Action Database

Beginning January 1, 200727, BC became a participant in the National Class Action Database of the Canadian Bar Association, located at www.cba.org/ClassActions. Within 10 days of service or filing, whichever is earlier, a copy of the originating process (i.e., the writ of summons) or certification motion (not including affidavits), or any amendments thereto, must be sent electronically to the Database.

 

END NOTES

  1. The Deputy A-G described these 135 cases as ones where someone had sufficient interest in prosecuting the case that counsel requested assignment of a case management judge.
  2. The cases involving Bre-X Minerals are an example. About a dozen cases were filed in BC, and all have been abandoned
  3. See Branch, Class Actions in Canada, para. 4.1970.
  4. Withler v. Canada (Attorney General), 2006 BCSC 101; Elms v. Laurentian Bank of Canada (2004), 35 B.C.L.R. (4th) 373 (S.C.), aff'd 2006 BCCA 86; Gregg v. Freightliner Ltd., 2004 BCSC 1574, aff'd (2005), 42 B.C.L.R. (4th) 225 (C.A.); Nanaimo Immigrant Bingo Society v. British Columbia (2003), 22 B.C.L.R. (4th) 308 (S.C.), aff'd (2004), 30 B.C.L.R. (4th) 194 (C.A.); Kilroy v. A OK Payday Loans Inc., 2006 BCSC 1213; Sharbern Holdings Inc. v. Vancouver Airport Centre Ltd., 2007 BCSC 1262.
  5. See e.g., Rumley v. British Columbia (1999), 72 B.C.L.R. (3d) 1 (C.A.); Halvorson v. British Columbia (2003), 13 B.C.L.R. (4th) 205, 2003 BCCA 264; Collette v. Great Pacific Management Co., 2004 BCCA 110 ("Collette").
  6. Cooper v. Hobart (2000), 75 B.C.L.R. (3d) 54 (C.A.), aff'd (2001), 206 D.L.R. (4th) 193 (S.C.C.) (the appellate court ruled that no reasonable claim had been pleaded); Ernewein v. General Motors of Canada Ltd. (2005), 46 B.C.L.R. (4th) 234 (C.A.) ("Ernewein") (the Court of Appeal ruled that the plaintiff had failed to provide an appropriate evidentiary basis for the proposition that the resolution of proposed common issues would significantly advance the litigation); and Williams v. College Pension Board, 2007 BCCA 19 (the appellate court ruled no reasonable claim had been pleaded).
  7. MacKinnon v. National Money Mart Company, 2004 BCCA 472, (2005), 33 B.C.L.R. (4th) 21 (C.A.).
  8. Rumley is an example. The Court of Appeal said (para. 25) that the error of the chambers judge was in failing to recognize the limited grounds on which the plaintiffs proposed to advance the claims and the greater commonality of those limited grounds. This decision was upheld on appeal to the Supreme Court of Canada. However, see subsequent events in Rumley described in the judgment at (2003), 12 B.C.L.R. (4th) 121 (S.C.), 2003 BCSC 234. Collette is another example: the case management judge twice refused to certify; however, on appeal from the second dismissal of certification, the Court of Appeal (Mackenzie J.A.) identified common issues that the court concluded could be certified.
  9. Harrington v. Dow Corning Corp. (1996), 22 B.C.L.R. (3d) 97 (S.C.), aff’d (2000), 82 B.C.L.R. (3d) 1 (C.A.). This was the first case to be certified in BC. However, the case appeared to be unmanageable as a class proceeding, and a settlement (involving a modest, capped fund with a reversion to the defendants) was approved in August, 2005.
  10. Chace v. Crane Canada Inc. (1997), 26 B.C.L.R. (3d) 339 S.C.), aff’d (1998), 44 B.C.L.R. (3d) 264 (C.A.)
  11. See the discussion in Hamer, David I. and Lehman, Troy H., "Class Actions and Punitive Damages in Canada: Some Lessons for Prospective Defendants," (2003), 28 International Legal Practitioner. The BC Court of Appeal affirmed that "punitive damages" could be certified as a common issue in Fakhri v. Wild Oats Markets of Canada, Inc., 2004 BCCA 549.
  12. Campbell v. Flexwatt Corp. (1997), 44 B.C.L.R. (3d) 343 (C.A.)
  13. See Class Proceedings Act, s. 4(1)(c), and see Rumley v. British Columbia, [2001] 3 S.C.R. 184 ("Rumley"), para. 33.
  14. Western Canadian Shopping Centres Inc. v. Dutton, [2001] 2 S.C.R. 534, Hollick v. Toronto (City), [2001] 3 S.C.R. 158, and Rumley.
  15. Hoy v. Medtronic, Inc. (2003), 14 B.C.L.R. (4th) 32 (C.A.), at para. 54.
  16. Markson v. MBNA Canada Bank (2007), 85 O.R. (3d) 321 (C.A.) and Cassano v. Toronto-Dominion Bank (2007), 47 C.P.C. (6th) 209 (Ont. C.A.)
  17. See, e.g., Nanaimo Immigrant Settlement Society v. British Columbia (2001), 84 B.C.L.R. (3d) 208 (C.A.), at paras. 20-21; Scott v. TD Waterhouse Investor Services (2001), 94 B.C.L.R. (3d) 320 (S.C.), at paras. 115-116, 139-141; Halvolson v. British Columbia (2003), 13 B.C.L.R. (4th) 205 (C.A.), at para. 34
  18. See MacLean v. Telus Corporation, 2005 BCCA 338, overruling Scott v. T.D. Waterhouse Investor Services (Canada) Inc. (2000), 83 B.C.L.R. (3d) 365 (S.C.).
  19. Reid v. Ford Motor Company, 2003 BCSC 1632, paras. 50-52; Barbour v. University of British Columbia, 2006 BCSC 1897, at para. 56.
  20. Dahl v. Royal Bank of Canada, 2006 BCCA 369. See also Consumers' Association v. Coca-Cola Bottling Company, 2005 BCSC 1042 and 2006 BCSC 863, aff'd (2007), 72 B.C.L.R. (4th) 243 (C.A.)
  21. See, e.g., Furlan v. Shell Oil Co. (2000), 77 B.C.L.R. (3d) 35 (C.A.) (defendants' jurisdictional challenge dismissed); Robson v. Chrysler Canada Ltd., 2002 BCCA 354, [2002] B.C.J. No. 1232 (C.A.) (defendants' jurisdictional challenge dismissed on appeal); Nutreco Canada Inc. v. F. Hoffman-La Roche, 2001 BCSC 1146 (alleged price-fixing conspiracy; defendants' jurisdictional challenge dismissed).
  22. Lieberman v. Business Development Bank of Canada, 2005 BCSC 389 (S.C.), leave to appeal refused 2005 BCCA 268.
  23. Endean v. Canadian Red Cross Society (1997), 36 B.C.L.R. (3d) 350 (S.C.).
  24. Ernewein, para. 31
  25. Collette v. Great Pacific Management Co. Ltd. (2001), 86 B.C.L.R. (3d) 92 (S.C.), 2001 BCSC 237 (defendant's application for cross-examination dismissed); MacKinnon v. National Money Mart Co., [2004] B.C.J. No. 2413, 2004 BCSC 1533 (defendants' application for cross-examination dismissed).
  26. Hoy v. Medtronic Inc. (2000), 78 B.C.L.R. (3d) 302 (S.C.), 2000 BCSC 1105, leave to appeal dismissed, and 2000 BCSC 1715.
  27. See the Practice Direction re Class Proceedings Act dated December 1, 2006.