Canada: Alberta Adopts an Opt Out Class Proceedings Regime

On December 2, 2010, Alberta's Class Proceedings Act1 (CPA) was changed from an "opt in" to an "opt out" regime, and criteria were added to guide judges in addressing the concerns raised by multi-jurisdictional class actions.2 This means that non-residents who fall within the definition of a class certified in an Alberta proceeding will automatically become class members unless they take an active step to opt out. We believe that this will have far-reaching consequences for Alberta class proceedings, since jurisdictional boundaries may no longer impede the size of certified classes as long as there is a "real and substantial connection" between non-resident class members and the claim. For corporate defendants, the amended CPA may offer increased comfort in the final resolution of claims, and access to courts with expertise in local issues including the ones facing the energy industry.

At least thirty-four proposed class proceedings have been commenced in Alberta since the CPA's enactment in 2004.3 At the same time, numerous plaintiffs have sought certification of similar classes in related Canadian lawsuits, under those provinces' counterparts to the CPA. While the other provinces' regimes generally mirror Alberta's, there can be significant differences in the way that they address the manner in which a class's composition is set. For example, judges have interpreted Ontario's legislation4 as allowing individuals outside the province – and sometimes even outside of Canada – who fall within the proposed class definition to be bound by the lawsuit's result unless they "opt out." In contrast, class actions certified under Alberta's un-amended legislation only bound individuals outside the province if they "opted in."

In general, opt out regimes enhance access to justice by automatically including all persons who fall within the definition of a certified class, whether or not they take any active steps.5 Opt out regimes create large classes that can include national and even international residents. This can make provinces with opt out regimes more desirable to plaintiffs' counsel, since larger classes lead to larger settlement amounts and, in turn, larger contingency fees. For defendants, opt out regimes offer more certainty that the claims against them have been finally resolved against a larger group of potential claimants.

Notwithstanding these advantages, opt out regimes have been plagued by jurisdictional concerns. As noted by the Supreme Court of Canada in Lépine, overlapping national classes "raise ... the issue of relations between equal but different superior courts in a federal system in which civil procedure and the administration of justice are under provincial jurisdiction," and can lead to "friction between courts in different provinces."6 These problems include: conflicting judgements; onerous demands to defend similar, or nearly identical, actions in multiple jurisdictions; needless multiplication of resources in bringing, defending, and hearing multiple, similar disputes; the adequacy of notice provided to potential, non-resident class members; and enforcing judgments in various jurisdictions.7 By choosing (at least initially) an opt in regime for the CPA, Alberta avoided these problems.

In recent years, the analysis of Ontario's opt out legislation in cases such as Imax,8 Orsu Metals,9 andGammon Gold10 appears to have reconciled this regime with the requirements of Canadian constitutional law and conflicts of law principles. When determining whether to certify a national or global class, Ontario courts now consider whether they have jurisdiction over the substance of the claim, following the real and substantial connection test and guided by the principles of order and fairness.11 Ontario courts have also indicated that they will recognize externally rendered class action judgments that purport to bind national and international class members, as long as the following conditions are met: (a) there is a real and substantial connection linking the cause of action to the foreign jurisdiction; (b) non-resident class members were adequately represented; and (c) the foreign proceeding afforded the requirements of procedural fairness to non-resident class members including adequate notice.12

While courts traditionally treated the existence of foreign, parallel proceedings as merely one more factor in the appropriate forum analysis, cases like Gammon Gold suggest that courts are developing principled methods for managing jurisdictional disputes in the spirit of mutual comity. But it remains unclear whether the Ontario courts' approach can, alone, address all of the problems raised by multi-jurisdictional lawsuits. The courts of other provinces with opt out regimes could still certify overlapping, nearly identical, class proceedings. What was needed was the type of legislative reform the Supreme Court of Canada called for in Lépine.

With the CPA Amendment Act's proclamation, Alberta (and, previously, Saskatchewan) appears to have answered that call. Specifically, the CPA Amendment Act gave force to the Uniform Law Conference of Canada's recommendations13 and gave Alberta an "opt out" class proceedings regime.14 It also provided judges with a codified set of criteria for analysing the jurisdictional concerns raised by national and global classes and for determining whether it would be preferable for the claims to be resolved in another province's proceedings, namely: (a) the alleged basis of liability; (b) the stage of proceedings; (c) the plan for the proposed multi-jurisdictional proceeding, including its viability and the resources for carrying it out; (d) the location of the class members; (e) the location of evidence and witnesses; and (f) the advantages and disadvantages of litigation being conducted in more than one jurisdiction.15 Alberta courts will now have to articulate the details of an operational, legislative framework for mitigating the problems raised by overlapping, multi-jurisdictional class actions.

What effect will this have on class proceedings in Alberta? Under the amended CPA, Alberta plaintiffs will be able to have their claims heard in, and settlements administered by, local courts. Previously, many Alberta class proceedings focused on local issues affecting Alberta residents (e.g. claims for localized environmental damages, or relief sought against the provincial government). Under the new regime, we expect to see more class actions commenced in Alberta that are complex, have a broader reach, and touch on more varied subject matter, such as securities law, competition law, and products liability.

While possibly benefitting plaintiffs (or their counsel), defendants will also enjoy greater certainty under the amended CPA that judgements and settlements finally resolve claims. Alberta's corporate defendants will enjoy the additional benefit of reduced management time costs, fewer displacement issues, lower legal fees, and access to courts with expertise in the issues facing key, locally based industries. When it comes time for Alberta corporations to defend prolonged, multi-million-dollar class actions, there may now really be no place like home.


1. 2003, S.A., c. C-16.5 [CPA], as amended by the Class Proceedings Amendment Act, infra note 3.

2. Class Proceedings Amendment Act, 2010, S.A., c. 15 [CPAAmendment Act].

3. Canadian Bar Association, National Class Action Database.

4. Class Proceedings Act, 1992, S.O. 1992, c. 6. - _ftnref5

5. Canada Post Corp. v. Lépine, 2009 SCC 16, [2009] 1 S.C.R. 549 [Lépine] at para. 57.

6. See e.g. Janet Walker, "Parallel Proceedings – Converging Views: The Westec Appeal" (2000) 38 Can. Y.B. Int'l L. 155 at 155. See also: Lépine, supra note

7 at para. 57; Tiboni v. Merck Frosst Canada, [2008] O.J. No. 2996, 295 D.L.R. (4th) 32 (Ont. S.C.J. 2008) at para. 37; and Janet Walker, "Coordinating Multijurisdictional Class Actions Through Existing Certification Processes" (2005) 42 Can. Bus. L.J. 112.

8. Silver v. Imax Corp., [2009] O.J. No. 5585, 66 B.L.R. (4th) 222, 2009 CarswellOnt 7874 (S.C.J.) [Imax].

9. Pysznyj v. Orsu Metals Corp., [2010] O.J. No. 1994, 2010 ONSC 1151 [Orsu Metals].

10. McKenna v. Gammon Gold Inc., 2010 ONSC 1591, 2010 CarswellOnt 1460 [Gammon Gold], leave to appeal allowed in part, 2010 ONSC 4068, 2010 CarswellOnt 5389.

11. See e.g. the analysis of cases like Van Breda v. Village Resorts Ltd., 2010 ONCA 84 in Gammon Gold, supra note 11 at paras. 90-95.

12. Currie v. McDonald's Restaurants of Canada Ltd. (2005), 74 O.R. (3d) 32, 250 D.L.R. (4th) 224, 2005 CarswellOnt 544 (C.A.) at para. 30.

13. See Class Actions Act, S.S. 2001, c. C-12.01 and Uniform Law Conference of Canada,Class Proceedings Act (Consolidation, 2006). While Ontario's courts have led the articulation of the principles for analysing multi-jurisdictional class proceedings, the province's legislation does not deal with such actions specifically.

14. CPA Amendment Act, supra note 3, s. 9.

15. Ibid., s. 5.

Tris Mallett is a partner whose practice focuses on corporate litigation, class action defence and securities enforcement.Kelly Osaka carries on a commercial litigation practice focused on complex business disputes in a variety of industry sectors including energy, financial services and consumer products.Levi Cammack practises corporate and commercial litigation, including insolvency and restructuring matters.

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.

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