In Banman v. Ontario (“Banman”), the Ontario Superior Court (the “Court”) considered the new preferable procedure criterion of the certification test under the amended Class Proceedings Act, 1992 (“CPA”) in certifying a systemic negligence and institutional abuse class action. The decision represents the first interpretation and application by the Court of the new preferable procedure test and confirms that the legislative intent behind the superiority and predominance criteria was to create a more rigorous certification test in Ontario.

The Amended CPA and the New Preferable Procedure Criterion

The test for certification in Ontario consists of the following criteria: (1) whether the pleadings disclose a cause of action; (2) whether an identifiable class exists that would be represented by the representative plaintiff; (3) whether the claims raise common issues; (4) whether a class proceeding would be the preferable procedure for the resolution of the common issues; and (5) whether a suitable representative plaintiff exists.

In October 2020, several amendments to the CPA came into effect, including the introduction of a new preferable procedure criterion as part of the foregoing certification test. Specifically, the amendments added a new subsection 5(1.1) that provides that a class proceeding will be the preferable procedure for the resolution of common issues only if, at a minimum:

• it is superior to all reasonably available means of determining the entitlement of class members to relief or addressing the impugned conduct of the defendant; and
• the questions of fact or law common to the class members predominate over any questions affecting only individual class members.

Background

The plaintiffs in Banman moved to certify a proposed class action against the Ontario Government and its Attorney General for alleged harms incurred to 429 patients treated in the forensic psychiatric unit (the “PST Unit”) of the St. Thomas Psychiatric Hospital between 1976 and 1992.^[i] The plaintiffs alleged breach of fiduciary duty, negligence, vicarious liability and breach of non-delegable duty, and breaches of sections 7, 9, 12, 15 and 28 of the Canadian Charter of Rights and Freedoms (the “Charter”).

Among other things, the Government asserted that the proposed class action did not satisfy the preferable procedure criterion of the certification test. In this regard, the Government submitted that the individual issues predominate over common issues and that a joinder action^[ii] would be more appropriate. The Government pointed to the joinder action that was used by 28 co-plaintiffs against the Government in Barker v. Barker^[iii], a case that involved similar allegations of harm and resulted in a $10 million damages award in the aggregate for 27 of the 28 plaintiffs.

The Court certified the action as against the Government, but dismissed the action as against the Attorney General as it was never a proper party. The Court held that the plaintiffs satisfied the cause of action criterion, except with respect to certain breach of Charter claims, and that certain common issues regarding causation and damages could not be certified. Subject to these qualifications, the plaintiffs satisfied all the certification criteria.

The Preferable Procedure Analysis

The Court held that once the first three certification criteria are satisfied, the new more rigorous preferable procedure analysis involves determining: (1) whether the design of the class action is manageable; (2) whether there are reasonable alternatives to the proposed class action (i.e., individual actions, joinder actions, consolidation, test cases, quasi-judicial or administrative proceedings and remedial schemes or programs outside of a proceeding); (3) whether the common issues predominate over the individual issues; and (4) whether the proposed class action is superior (better) to the alternatives.

The analysis should involve comparing the advantages and disadvantages of the alternatives to the proposed class action through the lens of judicial economy, behaviour modification and access to justice. However, the Court emphasized that the primary lens for the preferability analysis will always be access to justice.

Applying the new test, the Court held that the plaintiffs’ proposed class action satisfied the preferable procedure criterion.

Manageable Design

The Court noted that the case is fundamentally a systemic institutional abuse or malfeasance class action with a common issues trial to be followed by individual issues trials to determine causation and damages. Noting that more complex systemic or institutional abuse or malfeasance class actions have been certified, the Court held that the design of the class action was manageable.

Reasonable Alternatives

The Court recognized that there were some reasonable alternatives to a class action: (1) up to 429 individual issues trials; (2) a joinder action of up to 429 co-plaintiffs; and (3) several joinder actions in which up to 429 patients are grouped into categories of claims. Viewing these alternatives through the lens of behaviour modification and judicial economy was not particularly helpful and the Court viewed them as “neutral factors” because the alleged wrongs stopped in 1992, and all alternatives involved the possibility of adjudicating 429 individual claims. However, through the crucial access to justice lens, the Court found that a class proceeding was the preferable procedure, and superior to any of these alternatives.

Predominance

To satisfy the new predominance requirement, the Court emphasized that the common issues taken together must predominate over the individual issues. In this case, the Court concluded that the common issues predominated over the individual issues for all but the patients who had economically viable assault or sexual assault claims, which are idiosyncratic. Despite the diverse claim demographics in this case, and the fact that some patients could have multi-million dollar claims and could pursue individual claims, the Court ultimately held that for many patients in this case a class proceeding was the only viable means to achieve access to justice.

Superiority

The plaintiffs asserted that the class action was the preferable procedure and superior to individual trials or joinder actions. Drawing on their experience in Barker v. Barker, the plaintiffs asserted that the prosecution of individual or group institutional abuse or malfeasance actions requires significant financial expense, such that it would not be economically feasible to pursue such claims absent certification as a class proceeding. The Court found merit in this argument and noted that a class action is a means to overcoming such barriers to access to justice.

The Court also held that the class action was the preferable procedure and superior to the alternatives considering that a class action:

• automatically assembles the class members who may benefit by a common issues trial (and provides an opportunity for class members to opt into individual issues trials if they have economically viable claims);
• secures class members with legal representation that they might not otherwise obtain;
• is a viable route to access to justice for those with economically viable claims if class counsel may not be willing to take on risks of a joinder action;
• achieves economies of scale for the whole group, and allows those with economically viable individual claims to pursue them later depending on the outcome of the common issues trial; and
• is favourable to the defendant because if the class action ended in individual issues trial, then all of the claims of class members who wished to pursue them would be accommodated, and if the class action settled, it would discharge the defendant from liability for all the class members, even those who have not proceeded to individual trials.

Key Takeaways

Banman provides an overview of the application of the new preferable procedure analysis under section 5(1.1), and highlights that:

• the purpose of section 5(1.1) was to “raise the threshold, heighten the barrier, or make more rigorous the challenge of satisfying the preferable procedure criterion”;
• the crucial and primary lens for reviewing the preferability analysis is access to justice;
• to satisfy the predominance requirement, common issues taken together must predominate over the individual issues; if they do not, then a class action is not productive and is inferior (not superior) to the alternatives of proceeding to individual issues trials; and
• a class action will not be preferable if, at the end of the day and the common issues trial, claimants face the same economic and practical hurdles that they faced at the onset of the proposed class action.

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[i] The Plaintiffs also sued 2 psychiatrists but at the commencement of the certification hearing, the plaintiffs moved for a discontinuance of the action as against the defendant doctors, which was granted.

[ii] A joinder action is where two or more persons who are represented by the same lawyer join as plaintiffs in the same proceeding, where they assert claims that arise out of the same occurrence, or the claims give rise to common questions of fact or law.

[iii] 2020 ONSC 3746 and 2021 ONSC 158, var’d 2022 ONCA 567.

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