Has the Time Come to Amend Section 2(3)

Is it time to abandon the ninety-day rule? Has the Time Come to Amend Section 2(3) (the “Ninety-Day Rule”) of the Class Proceedings Act, 1992?

Section 2(3) of the Class Proceedings Act, 1992 (CPA) requires that a certification motion be made “within ninety days.”¹ The timing of the certification motion, the central focus of much class actions practice, is now drastically removed from the ninety-day timeframe intended by the drafters of the CPA. Indeed, courts have often noted that the ninety-day limit is more frequently honoured in the breach than in the observance. Often, two years or more elapse between the filing of a class action and the subsequent certification hearing. Delays such as these put at risk the access to justice gains which have thus far been achieved through class proceedings.

Is it time to abandon the ninety-day rule? Consideration ought to be given to amending the CPA to include a realistic certification timeline, keeping in mind the summary nature of the certification motion. The implementation of a six-month deadline for certification, which could only be extended with leave from the court, would encourage litigants to focus on the procedural nature of the motion, while creating an achievable schedule. This approach would import some discipline into the class actions regime, shortening delays, decreasing expenses and preserving access to justice.

While we are typically hesitant to adopt U.S. litigation practices, this may be an area where litigants would benefit from a move towards the U.S. approach. It is not uncommon in the United States for class action certification hearings to be heard in a half-day motion. The hearing of the certification motion in the U.S. aftermarket automotive lighting antitrust class action, which included live examination of an expert witness, was allotted only ninety minutes.² For court appearances and motions, judges simply assign a court date, and counsel are required to appear. This type of discipline in scheduling encourages efficient class actions litigation, facilitating access to justice by ensuring that evidence is preserved and disputes are heard within a reasonable timeframe. The ultimate result is timely resolution of the litigation for all parties.

While the goal of timely certification hearings is mandated by the CPA, the scheduling of class action motions is approaching a crisis that mirrors the backlog faced by the courts in Toronto during 2001-2004, when the case management rules created delays and trial cancellations. The scheduling problems faced by class actions litigants in Ontario now encourage forum shopping and create skyrocketing litigation expense. Such results are to the advantage of corporate defendants, undermining the ability of plaintiffs to bring affordable class actions in their own region. In fact, some counsel now encourage would-be class actions plaintiffs to consider other forms of actions to avoid the delays inherent in the class actions regime.

Origins of the CPA

Procedure should be the servant of substantive justice, and not vice versa.³ In the twenty years since its enactment, the CPA has significantly improved access to justice for class members. The CPA was drafted on the recommendation of the Ontario Law Reform Commission, which concluded that by increasing access to the courts, class actions could “provide an antidote to the social frustration that exists where neither courts nor administrative agencies are able to protect the rights of citizens on an individual basis.”⁴ Despite the complexity of class action cases, meritorious claims are being advanced and resolved.⁵ These successes demonstrate that the CPA is an effective procedural tool, which largely functions as intended by its drafters.

The existence of class actions in Ontario facilitates the ongoing achievement of the CPA’s oft-cited goals; judicial economy, behaviour modification, and access to justice. Plaintiffs who would have been otherwise unable to pursue their claims through legal means are now participating in, and benefiting from, the Ontario class actions regime. However, the functionality envisioned by the Commission and the drafters of the CPA is currently threatened by significant delays and high costs, which derive from a collection of related practices. Class actions now face lengthy wait times; often taking years to reach a certification motion. At the root of the problem is a departure from the origins of the CPA as a procedural tool. In order to preserve and develop the fundamental goals of the CPA, especially access to justice, we must refocus the evolution of class actions practice on the procedural nature of the statute and the certification motion.

Justice Delayed is Justice Denied

Access to justice has been identified as “the challenge for the civil justice system.”⁶ At a fundamental level, access to justice requires that litigants have their day in court, at which time their matter is heard and determined on its merits. While many class actions settle long before a trial on the merits, the scheduling of a certification motion or a trial facilitates access to justice by focusing litigants on the action and encouraging critical consideration of the case. As noted in the Ontario Civil Justice Review’s First Report, “the more times one can build into the system an occasion when counsel has to pick up his or her file and think about it, the more likely it is that their [sic] will be an earlier resolution of the case.”⁷ Without certification and trial dates to motivate counsel and parties to the litigation, cases languish, impairing the ability of the CPA to deliver access to justice. In Osmun v Cadbury Adams Canada Inc, Justice Strathy concluded that “public confidence in the administration of justice is not enhanced when class action litigation takes many years to resolve. The efficacy of access to justice and behaviour modification, in particular, is diluted by delay.”⁸

The ninety-day rule is simply not realistic, and as a result it is rarely adhered to. It is not difficult to find examples of egregious delay in Ontario class actions cases that go well beyond the ninety-day limit mandated by the CPA. Schwoob v Bayer Inc, a class action relating to Yasmin, a birth control pill, was filed in March 2010. The certification hearing was not held until January 2013, a delay of nearly three years.⁹ In Peters v Merck Frosst Canada Ltd, the statement of claim was filed in May 2007. Certification was eventually scheduled for January 2013.¹⁰

Cases involving multiple defendants face even longer delays. In Airia Brands Inc v Air Canada, although the statement of claim was filed in May 2006, certification has not yet been heard, nearly seven years later.¹¹ In Westminster Mutual Insurance Company v TYC Brother Industrial Co Ltd, a price-fixing action involving multiple defendants, the statement of claim was filed in June 2009, but certification has not yet been heard.¹²

Procedural delays impact the substantive rights of plaintiffs and potential class members to pursue their claims. In litigation relating to alleged price-fixing in the market for polyether polyols, the Canadian action, Crosslink Technology Inc v BASF Canada, was filed in May 2006, less than eight months after a consolidated complaint was filed in the parallel U.S. proceeding, In re Urethane Antitrust Litigation (Polyether Polyol).¹³ Certification in the U.S. proceeding was heard on July 21, 2008, and a decision rendered, certifying the action, on July 29, 2008. The U.S. common issues trial was heard in early 2013, and a judgment returned against the defendant. Certification of the Canadian action was heard in December 2012 and the decision remains under reserve. The effect of such significant delays impacts not only the settlement value of a case but more importantly, the ability to effectively litigate the case through trial, should a settlement not be achieved.

The delays faced by class actions litigants are three-fold. First, scheduling difficulties increasingly cause long delays for simple procedural motions, and even longer delays for certification motions. Second, the increasing number of pre-certification motions brought by litigants, increases costs and prolongs the period between service of a class action and the hearing of certification motion. Finally, despite the decidedly procedural nature of the CPA, certification motions have too frequently become focused on the merits of the proposed class action. This improper focus extends the time required for the court to hear the certification motion, which in turn results in scheduling complications and delays, in addition to substantially increased litigation expense.

Timely Access to Limited Judicial Resources is Difficult

Mandatory case management of class actions is intended to streamline litigation, by ensuring that the judge hearing the case is familiar with the issues and the management needs of that action, as well as the CPA and class actions jurisprudence. However, the effectiveness of case management is hindered by a number of factors. There are finite limits on judicial resources in Ontario, which function as a barrier to access to justice. In the Toronto region, certain judges specialize in class actions and are only assigned to class action cases. This ensures that those judges have the knowledge and time necessary to effectively deal with the complex cases before them, but the work is exhausting and time-consuming. While other judicial regions appoint certain judges to hear class actions cases, these judges are not relieved from hearing other civil and criminal matters. In those regions, criminal matters justifiably take precedence, leading to extended scheduling delays with respect to class actions motions, which may only be heard by the assigned case management judge. While the specialization of these judges adds significant value to the determination of class actions motions, lengthy delays in obtaining court time restricts access to justice, vitiating some of the benefits specialization provides.

As discussed above, scheduling becomes even more onerous and difficult when multiple parties are involved. It is not unusual for class actions to involve ten or more parties, each represented by different counsel. Case management judges generously attempt to accommodate the schedules of all counsel, frequently leading to extended delays. Such flexibility ultimately obstructs the ability of the parties to achieve timely access to limited court time, hindering access to justice.

The case management delays currently faced outside of the Toronto region resemble the problems experienced by the Toronto region from 2001-2004. At that time, mandatory civil case management resulted in a crisis of judicial resources. Judges’ time was increasingly occupied by case management, resulting in long delays for trials and in-court motions. In response to this crisis, a modified form of case management was introduced by a specific Toronto Practice Direction and Rule 78. In his 2008 report on the Implementation of the Toronto Practice Direction and Rule 78, Chief Justice Winkler noted that case conferences convened for the fixing or varying of case timetables caused increased costs and were a questionable use of judicial resources. While the Toronto Practice Direction and Rule 78 solved this problem for civil case management as a whole, in the class actions context, case conferences regarding scheduling remain the norm. Amending section 2(3) of the CPA to provide a more realistic and less flexible certification timeline would offer not only counsel, but also the court, some much needed assistance in guiding class actions to certification.

Although judicial resources are understandably finite, the solution to the long delays that result from attempting to accommodate the various schedules of ten or more counsel may simply lie in refusing to do so. In class actions practice in the United States, the judge managing the consolidated actions sets court dates according to the judge’s own availability, and counsel must ensure that a representative appears on those scheduled dates. In conjunction with amending section 2(3) of the CPA, similar case management policies could be implemented in Ontario. The vast majority of parties in class actions are represented by counsel from large, sophisticated, and well-established firms. While inflexibility in setting court dates may be inappropriate when litigants are self-represented, this is not the reality of most class proceedings. If a more disciplined approach to scheduling were to be consistently applied, it might further encourage cooperation between counsel. Some inflexibility respecting court dates may encourage settlement of motions due to the pressure of finding counsel with some availability on particular dates. Of course, for important motions, such as the certification motion itself, case management judges can apply discretion to ensure that, when necessary, counsel can attend.

Pre-certification Motions can be Problematic

Many of the motions responsible for the type of scheduling delays referenced above are in the form of pre-certification motions. Sequential pre-certification motions frequently lead to interlocutory appeals, resulting in further delays. In Labourers’ Pension Fund of Central and Eastern Canada v Sino-Forest Corporation, Justice Perell concluded that all proposed motions should be heard at the certification hearing, noting that the “evidentiary footprint” of the proposed motions was the same, and that “it makes for little efficiency for the parties and little judicial economy to have the evidence and argument for leave and for certification heard more than once.”¹⁴ Although there are examples of cases where litigation involving pre-certification motions is appropriate, pre-certification motions are more frequently problematic. Indeed, the Supreme Court of Canada has specifically discouraged “litigation by instalments.”¹⁵

Pre-certification motions should be permitted only in certain circumstances. In Cannon v Funds for Canada Foundation, Justice Strathy, observing the discretionary nature of scheduling issues, composed a non-exhaustive list of relevant factors to consider in scheduling pre-certification motions:

1. whether the motion will dispose of the entire proceeding or will substantially narrow the issues to be determined;
2. the likelihood of delays and costs associated with the motion;
3. whether the outcome of the motion will promote settlement;
4. whether the motion could give rise to interlocutory appeals and delays that would affect certification;
5. the interests of economy and judicial efficiency; and
6. generally, whether scheduling the motion in advance of certification would promote the “fair and efficient determination” of the proceeding (s.12).¹⁶

Even in cases where the proposed pre-certification motion may dispose of the entire proceeding, for example, on a summary judgment motion, the outcome of that motion only binds the representative plaintiff, and not the proposed class at large. Accordingly, such motions may not have the effect of disposing of the potential class action in its entirety.

Additionally, courts have discouraged pre-certification motions regarding the admissibility of evidence and have preferred to determine these matters at the certification hearing, where the court is better positioned to determine relevance and can simply choose to give evidence little or no weight. The court has held that it is “more efficient” to perform this analysis at certification where the court has the benefit of the full certification record and can view the materials in context.¹⁷

In order to promote judicial efficiency, reduce scheduling delays, and increase access to justice, it is desirable that pre-certification motions be limited to those motions that case management judges, in their discretion, deem necessary to the fair determination of the proceeding and that will advance the goals of the CPA.

Certification is about Process, not Merits

In his report on the Implementation of the Toronto Practice Direction and Rule 78, Chief Justice Winkler concluded that “a fair and just system of justice requires a courtroom, a judge and a non-adjournment policy which in turn will produce settlements or timely adjudication, and be less costly to the litigants.”¹⁸ Lengthy delays prior to certification impact on plaintiffs’ substantive rights. Such delays may result in the deterioration of evidence and the unavailability of witnesses, in addition to astronomical increases in costs and reduced settlement values.

Given the complexity of class actions litigation, it has proven virtually impossible to reach certification within the ninety-day timeframe envisioned by the CPA. Amending section 2(3) of the CPA to impose a six-month certification deadline ought to be considered. In order to preserve and advance the goal of access to justice, strategic and legislative changes are necessary to shorten the time between the service of a claim and the hearing of the certification motion. As noted by Justice Cumming in Wilson v Servier Canada Inc, “access to justice means access to timely justice. A fair judicial process requires much more than simply an endless war of attrition waged by defendants with considerably greater resources than an individual representative plaintiff and the plaintiff class.”¹⁹

As we have seen, delays prior to the certification motion may be attributed to scheduling difficulties or pre-certification motions. Delays in the scheduling and hearing of a certification motion also result from an inappropriate focus on the merits of the proposed action. The Supreme Court of Canada affirmed and clarified the procedural nature of the CPA in Hollick v Metropolitan Toronto (Municipality): “the certification stage is decidedly not meant to be a test of the merits of the action… Rather the certification stage focuses on the form of the action. The question at the certification stage is not whether the claim is likely to succeed, but whether the suit is appropriately prosecuted as a class action…”²⁰ Despite this advisory, certification motions frequently feature primary and reply evidence from expert witnesses, which inevitably result in cross-examinations of these witnesses, leading to voluminous records and high litigation expense.

Further, a merits-based approach to certification often results in the request for a lengthy certification motion, making scheduling of the motion exponentially more difficult. With the finite judicial resources available in Ontario, especially in those regions outside of Toronto where class actions case management judges are not relieved from their regular criminal and civil cases, scheduling one or two-week motions is very difficult and will inevitably lead to  delay. This delay not only creates actual obstacles for access to justice, but reduces public confidence in the judicial system.

It is up to all parties involved in class proceedings to ensure that the focus on certification motions remains on the form of the action and not the merits of the proceeding. By amending section 2(3) of the CPA to include a realistic certification deadline, the time between service of the action and hearing of the certification motion would be reduced. In turn, this would aid in refocusing all parties on the procedural nature of certification. Restricting the preparation time prior to certification will limit the ability of litigants to unnecessarily seek and submit merits-based evidence, thus reducing the expense to all.

Once the evidence on certification is again focused on the procedural aspect of the action, the time required to hear a certification motion could be reduced, as has been the case in the United States. Such efficiency would not only reduce the expense to litigants, but it would relieve against some of the strain being placed on our limited judicial resources. Scheduling difficulties and delays would undoubtedly be minimized if Canadian certification motions could be shortened to one or two-day motions.

Conclusion

The implementation of a class actions regime in Ontario has greatly improved access to justice for litigants in this province, and across the country. The CPA has facilitated access to justice in numerous areas of the law, but if we are complacent in addressing the problems that have emerged, the goals of the CPA will be at risk. The challenge of our time is achieving timely access to justice. As officers of the court, it is the obligation of all involved in the practice area to protect and honour access to justice. Amendments to section 2(3) of the CPA, coupled with a few key changes in the handling of case management, would reduce the time taken to reach certification, improve access to justice, and ensure that the objectives of the CPA are respected. Scheduling discipline, where appropriate, coupled with a reduction in unsuitable pre-certification motions, would permit the hearing of necessary pre-certification motions in a timely and efficient manner. A refocus on the procedural nature of the certification motion itself would decrease expense, shorten the length of preparation time required prior to certification, and reduce the length of certification motions, thus enhancing judicial economy and reducing scheduling delays related to these motions. With these adjustments, judges and class actions counsel will ensure that the evolution of the CPA remains firmly focused on its originating goals, most importantly on providing access to justice for all litigants.

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¹ Class Proceedings Act, 1992, SO 1992, c 6, s. 2(3).

² In Re Aftermarket Automotive Lighting Products Antitrust Litigation, United States District Court for the Central District of California, Case No. 2:09-ml-02007; certification was heard on July 25, 2011.

³ The Honourable Chief Justice Warren K. Winkler, Evaluation of Civil Case Management in the Toronto Region: A Report on the Implementation of the Toronto Practice Direction and Rule 78, February 2008, p. 33.

⁴ Ontario Law Reform Commission, Report on Class Actions, Vol. 1, 1982, p. 130.

⁵ For example, Recovery for victims of water contamination in Walkerton, Ontario: Smith v Brockton (Municipality), (19 March 2001), Walkerton 00-CV-192173CP (Ont. SCJ); Individuals affected by residential schools: Baxter v Canada (Attorney General), (December 15, 2006), Toronto 00-CV-192059CP (Ont. SCJ); Persons infected with Hepatitis C: Parsons v Canadian Red Cross Society, [1999] OJ no 3572 (SCJ) and McCarthy v Canadian Red Cross Society, 2007 CarswellOnt 3735 (SCJ).

⁶ The Honourable Chief Justice Warren K. Winkler, Evaluation of Civil Case Management in the Toronto Region: A Report on the Implementation of the Toronto Practice Direction and Rule 78, February 2008, p. ii.

⁷ Ontario Civil Justice Review, First Report (Toronto: Ontario Civil Justice Review, March 1995) c. 13.1.

⁸ Osmun v Cadbury Adams Canada Inc., Scheduling Direction, October 18, 2011 at paras 10 and 15.

⁹ Schwoob v Bayer Inc, St. Catharines Court File No. 52030/10.

¹⁰ Peters v Merck Frosst Canada Ltd, Toronto Court File No. 07-CV-333698 CP; the certification motion was adjourned on consent of the parties.

¹¹ Airia Brands Inc v Air Canada, London Court File No. 50389CP.

¹² Westminster Mutual Insurance Company v TYC Brother Industrial Co Ltd, London Court File No. 62732CP.

¹³ Crosslink Technology Inc v BASF Canada, London Court File No. 50305CP; In re Urethane Antitrust Litigation (Polyether Polyol), United States District Court for the District of Kansas, Case No. 2:04-md-01616.

¹⁴ Labourers’ Pension Fund of Central and Eastern Canada v Sino-Forest Corporation, 2012 ONSC 1924 at paras 81 and 83.

¹⁵ Garland v Consumers’ Gas Co, 2004 SCC 25 at para 90.

¹⁶ Cannon v Funds for Canada Foundation, 2010 ONSC 146 at para 15.

¹⁷ See for example: 2038724 Ontario Ltd. v Quizno’s Canada Restaurant Corp., [2007] OJ no 1136 (SCJ) at paras 57-58; Hague v Liberty Mutual Insurance Co., [2001] OJ no 6069 (SCJ) at paras 9-10; and Andersen v St. Jude Medical Inc., [2002] OJ no 4478 (SCJ) at paras 10-12.

¹⁸ The Honourable Chief Justice Warren K. Winkler, Evaluation of Civil Case Management in the Toronto Region: A Report on the Implementation of the Toronto Practice Direction and Rule 78, February 2008, p. 33.

¹⁹ Wilson v Servier Canada Inc., 2001 CarswellOnt 4267 (SCJ) at para 23.

²⁰ Hollick v Metropolitan Toronto (Municipality), 2001 SCC 68 at para 16 [emphasis in original].