Canada: Volkswagen Litigation Highlights Significant Procedural Issues For Defendants Faced With Multiple Overlapping Class Actions

Last Updated: October 5 2015
Article by Craig T. Lockwood and Aislinn E Reid

In the wake of media coverage surrounding the emissions results for certain of Volkswagen's diesel engines, which reports have spawned numerous court and regulatory proceedings in multiple jurisdictions, more than 10 different class actions have recently been commenced in Canada (including 4 in Ontario). At least 6 of these putative class actions propose a national class, and at least two of them propose a global class.

Today, the filing of a multiplicity of class actions following high profile media coverage of a product liability or consumer protection story is a virtual certainty. This reality raises the question of what a defendant should do when faced with multiple class actions in multiple jurisdictions, while simultaneously attempting to manage the corresponding reputational and financial risks. This post focuses on two significant procedural issues that often arise where a multiplicity of overlapping class actions have been commenced: jurisdictional issues, and carriage wars.

Jurisdiction

Multiple claims in multiple Canadian provinces, such as those that have arisen in the context of the Volkswagen litigation, raise a number of jurisdictional issues. Such issues become particularly complex where certain of the proposed class actions seek to certify a national class (a "national class action"), which would include individuals in other provinces where separate class actions may have been commenced on behalf of a provincial class of plaintiffs. As we discuss in Litigating a Cross-Border Action in Canada, it can be extremely difficult for courts in different provinces to deal with overlapping class actions.

For the most part, Canadian courts have not generally been receptive to formal forum non conveniens motions in the context of competing class actions. Rather, they have tended to adopt a "deferential" approach by invoking subclasses or by refusing to certify extra-provincial classes where overlapping proceedings exist. Indeed, the class proceedings statutes in Saskatchewan and Alberta expressly permit courts to refuse to include individuals in the class who may be included in a pending class action in another jurisdiction.

However, there are a number of mechanisms available to defendants – including the Canadian Judicial Protocol for the Management of Multi‐jurisdictional Class Actions adopted by the CBA – which may lessen the burden of defending overlapping or parallel class proceedings in multiple Canadian jurisdictions. Although the protocol is largely voluntary, and is presently oriented towards settlement more so than active litigation, it offers a number of procedural tools that may assist defendants facing a multiplicity of proceedings. Defendants should therefore assess the various forum issues at play where parallel proceedings exist in order to see if a streamlined "national" approach to the litigation is a viable option.

Carriage Wars

Carriage motions are essentially a contest between two or more groups of plaintiffs' counsel who seek to control the class action litigation in a particular jurisdiction (generally within the same province). On a carriage motion, the court's objective is to consider the various class actions that have been commenced, and determine which of the competing actions is most likely to advance the best interests of class members, while at the same time being fair to the defendants and being consistent with the objectives of class actions legislation.

We have previously written about how carriage motions can give rise to insight and obstacles for defendants. On a carriage motion, among other things, competing plaintiffs' counsel are required to explain their tactical and strategic plans for the class proceeding, which gives defence counsel a preview of what each plaintiff group (most importantly, plaintiffs' counsel who are ultimately awarded carriage of the class action) will argue on the certification motion. In addition, defendant's counsel may, in certain circumstances, have the opportunity to make submissions on a carriage motion (including with respect to the relative merits of the competing claims). Although these submissions are in most cases inherently self-serving and accordingly may be given very little weight, defendant's counsel should consider them an important strategic opportunity.

Carriage motions also affect the pace at which class actions proceed, with important implications for defendants. On one hand, we have previously commented on how carriage motions may accelerate the pace of class actions by motivating plaintiff groups to get their action to an advanced stage early in the game, including delivery of significant amounts of evidence and expert reports, in order to demonstrate to the court their degree of preparedness. On the other hand, however, carriage motions may slow down the pace of class proceedings in certain circumstances, particularly when there are several competing or overlapping class actions in a jurisdiction, as is the case in the Volkswagen litigation. In such circumstances, defendants may be afforded additional time while plaintiffs' counsel "duke it out" amongst themselves, allowing defendants an opportunity to focus on both the defence of their case on the merits and the management of their business priorities and reputational risks.

Conclusion

Although a multiplicity of proceedings creates an added layer of procedural complexity and expense in class actions, in many cases defendants may have opportunities to leverage these circumstances strategically to their benefit. At the very least, the parallel proceedings should be managed so as to minimize the risk of waging a war on multiple fronts.

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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