A recent decision of the Ontario Superior Court of Justice adds
to the growing body of case law dealing with the issue of when a
Court should intervene to restrict communication with class members
after a class action has been certified. Defendants and third
parties must not interfere with class members' rights to
participate in or abstain from the class action on an informed,
voluntary basis, free from undue influence.
Durling v Sunrise Propane 2012 ONSC 6328 is a certified
class action arising out of a series of explosions which occurred
on August 10, 2008 at a propane facility in the City of Toronto.
The plaintiff class members allege that they suffered property
damage and/or personal injuries as a result of the explosion.
Justice Horkins certified the class proceeding on July 23,
During the subsequent opt-out period, a lawyer representing an
insurer which had paid monies to its insureds for losses sustained
as a result of the explosions wrote to some class members informing
them that it intended to unilaterally opt them out of the class
action because it planned to advance subrogated claims instead. The
letter informed the class members that under the terms of the
insurance policy, the insurer had been assigned the right to pursue
recovery, and it preferred to do so through its own action, rather
than have the insureds participate in the class action.
The communication came to the attention of class counsel who
brought a motion in front of Justice Horkins requesting an order
restraining the insurer and its counsel from making any further
communication with the class members until the opt-out period
expired. Justice Horkins ultimately deemed the communication
improper and, pursuant to s. 12 of the Class Proceedings
Act (the "Act"), ordered that the insurer have no
further contact with the class members during the opt-out period,
unless it received the permission of the Court.
Justice Horkins commented on the rules regarding communications
with class members. While the Act does not contain an absolute
prohibition on communication by defendants or third-parties to
class members during the opt-out phase, it does grant the Court
broad supervisory powers over the conduct of class proceedings.
This enables the Court to restrict communication if it is deemed
that a party is interfering with class members' right to make
an informed decision to opt-out of the class. Justice Horkins
explained that if a communication is found to have unduly
influenced class members, then the Court should "make any
order it considers appropriate respecting the conduct of a class
proceeding to ensure its fair and expeditious
This decision is a reminder that defendants and third parties
should tread carefully when considering communication with class
members after certification.
In Irwin v. Alberta Veterinary Medical Association, 2015 ABCA 396, the Alberta Court of Appeal found that the "ABVMA" failed to afford procedural fairness to a veterinarian undergoing an incapacity assessment.
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