Last year BLG's Environmental Law Cross-Country Check-Up discussed the Ontario Court of Appeal decision in Smith v. Inco, which dismissed the plaintiff's class action. Inco dealt with historic nickel contamination in the soils of Port Colborne over decades of smelting. During the past year, the class unsuccessfully sought leave to appeal the decision to the Supreme Court of Canada.
Inco was the first common law environmental class action trial in Canada. Ultimately, the class was unable to satisfy the Court of Appeal it had suffered "actual, substantial and physical harm". Chemical alteration of the soil was not viewed as compensable damage. Indeed, a $1.7 million costs award has been granted against the Class Proceedings Fund as a result of the action's failure. Moving forward, stigma claims will be much more difficult to win.
Environmental class claims are complex, costly and not for the faint of heart. Personal injury cases in particular are difficult to handle as class claims. However, remediation or monitoring claims might possibly be certified as a common issue – if no such program already exists.
Here are some trends to watch out for:
- Personal injury cases are not generally appropriate for class
action (e.g., the Agent Orange health claims were denied
class certification in Newfoundland and Labrador and in New
Brunswick).
Impact: If there are significant personal injuries from an environmental incident, it is usually more efficient to group the individual claims into a single statement of claim. U.S. case law is also moving away from environmental personal injury class certifications following the U.S. Supreme Court decision in Duke v. Walmart that looks at predominance of individual issues as a key feature pointing against certification. - Regulatory action may be a "preferable procedure"
precluding a class action.
Impact: Good regulatory action may be preferable to a class action in terms of practically resolving the class issues. And if the regulator is not acting, the omission might be grounds to sue the regulator: Taylor v Canada. - Courts are taking a much harder look at expert evidence on
class certification motions.
Impact: Pseudo-experts or biased pundits on environmental issues are no longer tolerated. The U.S. Daubert decision continues to have an impact in Canada re "junk science". - Exemplary behaviour is a key to avoiding class
certification.
Impact: Good behaviour affects the court's preferable procedure analysis. The court will look favourably upon a company which has published and put into effect an environmental code of conduct; considered the timeliness and clarity of external communications; and has a pre-existing process to handle and compensate small claims efficiently. - Poor post-incident behaviour may become the main cause of
action.
Impact: One purpose of class actions is to dissuade future bad behaviour. Any perception of cover-up, even if it does not exist, dramatically increases the likelihood of class certification and even possibly of punitive damages.
BLG is Canada's leader in class action defence. We are defending in excess of 150 class actions and have several class actions pending at Supreme Court of Canada on appeal or leave to appeal applications. BLG has been counsel on many of Canada's leading contested class action decisions in 2012.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
