New Ontario law makes it harder to sue companies via class action

TORONTO — Ontario lawmakers approved a bill on Wednesday that sets a higher bar for class action suits, and experts say it will be harder for consumers to sue businesses.

"Because the test is more challenging now, many cases will get dropped. Businesses could likely defeat them," says Toronto lawyer Margaret Waddell. "Now if a company acts badly, that behaviour will go unchecked — and consumers won't have remedy for the harms they suffered."

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Currently, a judge must approve or "certify" that a class action meets minimum legal requirements for it to proceed. Under the new law, judges would have to consider stricter guidelines before permitting a group to sue a company.

That means businesses could successfully bat away more potential lawsuits before they go forward, Waddell says.

The new standard, similar to what is used in the U.S., is not easy for the average consumer to meet. Successful class actions on residential schools, environmental tragedies such as the E. coli outbreak in Walkerton, Ont. and tainted blood would not have made it past this new test, the Law Commission of Ontario has estimated.

To get a class action to court, a group would now have to prove that the class action is better than any other way of resolving the dispute — for example, an individual lawsuit, tribunal complaint or "remediation" outside the legal system. The group must also prove that the greatest harms they suffered, individually — often at the hands of a company — also impacted everyone in the group.

Bill 161, which now awaits royal assent, alters more than 15 other provincial acts, with the bulk of changes aimed at modernizing the outdated justice system.

The office of Ontario Attorney General Doug Downey says the bill actually promotes fairer settlements and quick resolutions where "interests of Ontarians are at the heart."

Press secretary Jenessa Crognali says the bill includes the first comprehensive updates to class actions in a quarter-century.

"They are designed to help Ontarians resolve their legal issues faster and receive meaningful access to justice," Crognali says.

But Waddell says that since lawyers are only paid when a class action concludes, it may also become more difficult to convince them to take on risky cases that could take years to fight.

"Our courts simply aren't equipped," Waddell says. "What they have done is slam the door, in particular, on personal injury types of cases, and haven't opened any other doors."

Downey's office says people are free to pursue other paths to resolve disputes, and the new system makes sure that a class action is "the most appropriate procedure."

"These improvements address issues that clog the system and slow down justice for everyone," says Crognali.

But, says Waddell, many class actions exist to benefit people who could not afford to hire a lawyer and sue a company on their own.

"It's not economically feasible," Waddell says.

This report by The Canadian Press was first published July 8, 2020.

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