2024 was an active year in the class action arena. In this post, our Litigation group in Toronto discusses noteworthy developments over the past twelve months. While our focus is on cases and other developments affecting Ontario, the discussion will also be of interest to those in other Canadian jurisdictions.
Here are our top 10 picks, grouped into the following four categories – procedure; competition; securities; and product liability:
Procedure
1. Ontario’s highest court provides guidance on allocation of defence costs among insurers for class actions spanning decades
In Loblaw Companies Limited v. Royal & Sun Alliance Insurance Company of Canada, 2024 ONCA 145[1], the Court of Appeal for Ontario (“ONCA”), among other things, overturned a finding that insureds were entitled to seek 100% of their defence costs from any of the insurers who owed a duty to defend, regardless of whether or not the claims occurred during the insurer’s policy period. The ONCA found that a pro rata “time on risk” allocation is the appropriate method of apportioning costs for claims that span many years where there are multiple insurers issuing consecutive policies to an insured. In doing so, the Court offered guidance for liability insurers involved in lengthy long-tail claims, including class actions that involve multiple policies and policy periods.
See our post for a review of the decision and some key takeaways.
2. Delay alone can constitute sufficient prejudice to dismiss an action for delay under Rule 24.01 of the Rules of Civil Procedure
In Barbiero v. Pollack, 2024 ONCA 904, the ONCA upheld the motion judge’s dismissal of a class proceeding for delay under Rule 24.01 of the Rules of Civil Procedure (the “Rules”). The plaintiff had not set down the class proceeding for trial for over 20 years and the defendant moved to dismiss the action for delay. The action was dismissed for delay by the motions judge. On appeal, the plaintiff argued that the 20-year period of delay was not inordinate and that in Langenecker v. Sauvé, 2011 ONCA 803, the ONCA had ruled that the passage of time on its own could not constitute sufficient prejudice to support the dismissal of an action. Dismissing the appeal, the ONCA ruled that the Langenecker approach “is out of step with the contemporary needs of the Ontario civil court system” and that the passage of time on its own can constitute sufficient prejudice to dismiss an action for delay (and not just serve as a rebuttable presumption of prejudice). The Court also made it clear that the fact class actions are subject to a robust case management process does not exempt class action plaintiffs from the burden of moving a proceeding forward.
3. Ontario Court of Appeal confirms “bright line” approach to transition provisions of Ontario’s amended Class Proceedings Act
In Martin v. Wright Medical Technology Canada Ltd.,2024 ONCA 1, the ONCA confirmed that there is a bright line between class proceedings commenced before the October 1, 2020 amendments to Ontario’s Class Proceedings Act (the “CPA”) came into effect and class proceedings commenced after that date. Martin involved two class actions commenced in 2014, where different class counsel represented the plaintiffs in each action. One action became subject to a mandatory dismissal because it had not sufficiently progressed (the “Rowland action”), while the other action had progressed and could continue under the old CPA (the “Martin action”). Class counsel in both cases wanted to amend the Martin action to include the claims in the Rowland action so that the claims could remain under the old CPA (i.e., the legislation prior to the 2020 amendments), which contains an easier test for certification.
The Court concluded that the Rowland action could be re-constituted or re-filed, but under the amended CPA. The decision confirms that if a class action subject to the old CPA is discontinued it cannot be revived under the old CPA by tacking its claims onto a different class action subject to the old CPA. Rather, if the discontinued action can be restarted, it must be restarted under the amended CPA given the clear language of the amended CPA, which draws a bright line between actions begun before and after October 1, 2020.
Competition
4. Ontario Court of Appeal upholds dismissal of proposed class action alleging price-fixing conspiracy by canned tuna companies
In Lilleyman v. Bumble Bee Foods LLC,2024 ONCA 606[2], the ONCA upheld the dismissal of a proposed competition class action commenced in Ontario involving allegations of price fixing of canned tuna. The representative plaintiff had tried to draw parallels to the conspiracy class action that was commenced in the U.S. against three leading tuna producers there, and which entailed the CEO of one of the producers being convicted and certain employees of tuna producers entering guilty pleas.
Relying on industry evidence tendered by the defendants concerning the differences between the U.S. and Canadian tuna markets, the Court held that guilty pleas in the U.S. did not provide some basis in fact for the existence of an alleged conspiracy in Canada. The plaintiff appealed the decision, but the ONCA upheld the lower court’s ruling, finding that there was no basis in fact for the existence of an alleged conspiracy in Canada. The decision reinforces that certification is not a mere formality and representative plaintiffs must present “some basis in fact” that the proposed common issues exist and can be answered in common across the entire class.
5. Potential Competition Act quasi-class action regime
New prohibitions under the federal Competition Act took effect on June 20, 2024, which codify existing laws prohibiting “greenwashing” (i.e., misleading environmental benefit claims). Among other things, as of June 20, 2025, private parties will be permitted to seek leave from the Competition Tribunal to bring private actions for deceptive marketing practices directly before the Tribunal if they can demonstrate “public interest” (further expanding the existing private action regime). Accordingly, individuals and businesses will no longer need to rely on the Bureau to act in respect of greenwashing complaints. The amendments provide broad discretion for the Tribunal to order monetary relief to a large group of persons (businesses and individuals) as well as the power to establish a payment, claims and notice process (i.e., specifying how payment is to be administered, the appointment of an administrator, specifying the time and manner for making claims and specifying the conditions for the eligibility of claimants).
See our post announcing the changes to the Competition Act and our follow-up post for more details and some key takeaways.
Securities
6. Ontario’s highest court affirms evidentiary principles on motions for leave to commence a secondary market misrepresentation claim
In Drywall Acoustic Lathing and Insulation (Pension Fund, Local 675) v. Barrick Gold Corporation,2024 ONCA 105, the ONCA affirmed the lower court’s decision denying in part the motion for leave to commence a secondary market misrepresentation class action against Barrick Gold and clarified the scrutiny that motion judges should apply to the evidentiary record. Specifically, the Court articulated three evidentiary principles applicable to the judge’s role on a motion for leave:
- the motion judge has a robust and important gatekeeping role (this requires a qualitative evaluation of the proposed action; it is not enough to show there is a triable issue or a “mere possibility of success”);
- the court is not meant to conduct an isolated review of only the evidence that supports the plaintiff’s theory. Rather, it should review all the evidence adduced by both parties to ascertain whether there is a reasonable or realistic chance that the action will succeed; and
- the leave motion should not be a “mini-trial”, and the motion judge should avoid, among other things, assessing the case at the leave stage against the ultimate burden (i.e., a balance of probabilities).
See our post for a review of the decision and some key takeaways.
7. Ontario sees increase in securities class actions against cryptocurrency and digital asset dealers
In Lochan v. Binance Holdings Limited,2024 ONCA 784, the ONCA dismissed a large cryptocurrency exchange’s motion to stay a class action in favour of arbitration, finding its arbitration clause to be against public policy and unenforceable. Meanwhile, in Shirodkar v. Coinbase Global, Inc.,2024 ONSC 1399, Ontario’s Superior Court chose to stay a potential class action involving an online cryptocurrency dealer, finding that Ireland was the preferable jurisdiction since mere accessibility of a website in Ontario, without more, is not necessarily sufficient to establish jurisdiction.
Lochan and Shirodkar appear on their face to provide conflicting insights on the class action risk faced by cryptocurrency and digital asset dealers in Ontario: Lochan emphasizes the need for realistic and accessible arbitration clauses, while Shirodkar appears to provide some breathing room for cryptocurrency and digital asset dealers which operate in Ontario but are based outside the province. However, these decisions collectively reflect increasing investor interest in the possibility of pursuing securities class actions against cryptocurrency and digital asset dealers.
See our post on Lochlan and our post on Shirodkar for in-depth analyses.
8. Failure to coordinate settlement of cross-border securities class actions may jeopardize settlement approval
In Kwong v. iAnthus Capital Holdings Inc.,2024 ONSC 1311, the motion judge refused to approve the settlement of a class proceeding involving allegations that the corporate defendant omitted material facts in its disclosure statements to shareholders. The plaintiff filed a class proceeding in the U.S. and then subsequently in Canada. The Ontario Superior Court certified the class action on consent of the parties, subject to settlement approval. The plaintiff sought approval of a settlement for C$500,000, of which C$195,787.85 would be available for distribution to the class after deductions for legal and administrative fees, a representative plaintiff’s honorarium and disbursements. Meanwhile, the proceeding in the U.S. was proposed to settle for US$2.9M (approximately C$4.2M), despite evidence that Canadian trading volume was 60.5% compared to 39.3% in the U.S.
The Ontario Superior Court did not approve the proposed settlement, finding that the plaintiff failed to satisfy its burden that the settlement was fair, reasonable and in the best interests of the class. Notably, the Court found that the evidentiary record did not explain the plaintiff’s evaluation of the claim, lacked evidence of class size and recovery per class member and failed to explain the disparity between the Canadian and U.S. settlements despite evidence of the trading volume during the relevant time.
This decision reinforces that settlement approval is not pro forma and will be approved only if parties can prove, on the basis of a sufficient evidentiary record, that the settlement is fair, reasonable and in the best interests of the class. Moreover, it highlights the importance of coordinating settlement of parallel, cross-border securities class actions to ensure that class members in the actions receive equitable treatment, having regard to the litigation risk, expense, class size and damages exposure in each action.
Product Liability
9. Ontario Court of Appeal confirms no compensation for risk “in the air”
In Palmer v. Teva Canada Limited,2024 ONCA 220, the ONCA upheld the lower court’s decision to deny certification of a proposed product liability class action, which sought damages for the alleged increased risk of being diagnosed with cancer in the future as a result of exposure to impurities detected in certain pharmaceutical products. The Court affirmed that there can be no viable cause of action in negligence without actual harm.
Drawing on the Supreme Court of Canada’s decisions in 1688782 Ontario Inc. v. Maple Leaf Foods Inc.,2020 SCC 35, and Atlantic Lottery Corporation v. Babstock, 2020 SCC 19, the ONCA reiterated that there is no liability “in the air” and no right to be free from the mere prospect of harm. The Court held that, in this case, the bodily injuries claimed had “not materialized and may never materialize”. Among other things, the decision exposes the evidentiary problems with product recall claims based on the mere “risk” of harm and reinforces how product liability class actions with no basis for any actual loss may not necessarily be certified.
See our post for a review of this decision and some key takeaways.
10. Ontario cracks down on overgeneralized “failure to warn” class actions
In Price v. Lundbeck,2024 ONSC 845, the Divisional Court upheld the dismissal of a class action certification motion. The representative plaintiff alleged that an anti-depressant drug was “teratogenic” (i.e., could cause congenital malformations) and that the defendants knew or ought to have known of this risk and breached a duty to warn Canadian physicians and patients about it. The certification judge dismissed the motion for certification, finding that the plaintiff could not establish some basis in fact that the common issue could be certified as a common issue; and even if it could, the plaintiff had not established some basis in fact that a class action would be the preferable procedure. The plaintiff’s proposed common issues were too individual and could not be resolved in common for the entire class. The certification judge also held that the proposed common issue for failure to warn could not be established, as it required a warning for a specific risk.
On appeal, the Divisional Court agreed with the certification judge that the proposed common issues lacked the “needed commonality” because they proposed to answer whether the drug could cause congenital malformations generally, rather than whether the pharmaceutical company defendants were liable for the specific congenital malformations claimed by each putative class member. The Divisional Court also agreed with the certification judge that a failure to warn of a risk of harm generally would not be sufficient to certify the question of whether a defendant breached its duty to warn. The plaintiff would instead need to show that the defendant failed to warn of a particular risk caused by its drug.
[1] Stikeman Elliott’s Alan D’Silva and Glenn Zacher were counsel of record for Aviva Insurance Company of Canada on the appeal.
[2] Stikeman Elliott’s Eliot Kolers, Sinziana Hennig and Eric Turner were counsel of record for the defendants, Lion Capital LLP, Lion Capital (Americas) Inc. and Lion/Big Catch Cayman LP.
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