Canada: Jurisdictional "Whack-A-Mole": Overlapping Class Actions And Abuse Of Process

Financial institutions often operate both nationally and internationally. Due to this common feature of business, such institutions may be the subject of multi-jurisdictional class actions. Canada, while possessing a federal system, does not have an MDL mechanism to address multi-jurisdictional class actions similar to the system in American federal courts. Counsel who have benefitted from the use of the highly orchestrated MDL system will be disappointed to find that a class proceeding will not possess the same degree of coordination if it migrates north of the border.

Due to the lack of such a framework, the courts have addressed the potential for abuse posed by filings in multiple jurisdictions. Appellate courts in Nova Scotia, Alberta, and Manitoba have each recently found that practically identical class actions commenced within their respective jurisdictions, brought by the same law firm on behalf of the same plaintiff class, are an abuse of process. Overlapping and parallel class actions commenced in different jurisdictions are not necessarily abusive or vexatious. However, the practice becomes problematic when class counsel bring the same action in multiple jurisdictions as part of an overall strategy to toll limitation periods, retain the ability to control and steer the matter as class counsel, or achieve procedural advantages based on jurisdiction. In the BCE cases, as discussed below, class counsel filed across the country for all of the above reasons and as a "form of insurance for the possibility of an unsuccessful result" in the province in which the action was pursued.

By way of background, in 2004 national class actions were filed by the same class counsel in every province (except Prince Edward Island), alleging that a Canadian wireless service provider, BCE, improperly charged system access fees. Certification was pursued only in the home province of class counsel, Saskatchewan, while the remaining actions were left dormant for nearly a decade. After several motions in Saskatchewan, and after all appeal routes were exhausted, certification was granted on a narrow cause of action, and on an "opt-in" only basis for non-resident class members.

In the interim, stays were granted in Alberta, Nova Scotia and Manitoba. Against the backdrop of the result of the litigation in Saskatchewan, class counsel then appealed the stays to resuscitate the actions in the opt-out jurisdictions. Each of the appellate courts found that the actions were abuses of process as collateral efforts to subvert the Saskatchewan decisions. In essence, counsel sought to take a "wait and see" approach and use the other actions as a form of "insurance policy" in the event the active case was unsuccessful. While multi-jurisdictional class actions are permitted, the court will look to the context to ascertain whether they are duplicative and serve no legitimate purpose.

Leave has been sought to appeal to the Supreme Court of Canada in one of the appellate decisions, which, if granted will allow the top court to address the propriety of bringing "carbon copy" class actions for strategic purposes only.

A legislative framework for the co-ordination of multi-jurisdictional class actions is not available in Canada. The result, for decades, has been a time consuming, expensive and patchwork approach to co-ordination which offers little predictability.  Litigants in Canada, and particularly those institutions that have a national presence that transcends provincial boundaries, will be looking to the Supreme Court to offer judicial guidance on a framework for managing multiple and overlapping class actions.

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