Canada: One Step Back: Nova Scotia Retreats From Ontario's Progress On Waiver Of Tort

The Nova Scotia Supreme Court recently released its certification decision in Sweetland v. GlaxoSmithKline LLC, a pharmaceutical class action, in which the plaintiffs claimed negligence and waiver of tort in respect of a diabetes medication alleged to have caused adverse cardiac events. 

The Sweetland decision took a practical approach to the controversial claim of "waiver of tort" in product liability class actions.2  In doing so, the Court synthesized several waiver of tort certification decisions into a single approach to dealing with the claim, but avoided adopting the most recent Ontario law. Unfortunately, the Nova Scotia court's approach appears to be a step back from recent Ontario jurisprudence encouraging the resolution of waiver of tort claims at an early stage.

Waiver of What? A Brief Primer

"Waiver of tort" is an ancient, obscure procedure that generally allows a plaintiff to collect any profits a defendant may have earned through wrongfully using the plaintiff's property, instead of accepting compensation for that wrongful use.3  Over the past two decades, plaintiffs have sought to repurpose the arcane doctrine to suggest that a plaintiff may be entitled to the defendant's profits as a result of proving any wrong, regardless of whether they were derived from the plaintiff's property. 

That development has been a windfall for the class action plaintiffs' bar, because if damages can be measured by a defendant's profit rather than a plaintiff's injuries, then the individualized issues that typically complicate a class action become irrelevant and several of the challenges of certifying a class action disappear. For more than ten years, courts have certified but declined to rule on the merits of these "waiver of tort" claims despite the entreaties of defence counsel to resolve the issue at an earlier stage.

A Step Back: Nova Scotia Charts a Different Course

The Court in Sweetland held that availability of, and liability for, waiver of tort claims should be determined at the common issues trial and the issue of quantification would be put off even further, to the individual issues trials. This approach was based on the application of two lines of Ontario case law holding, first, that the validity of waiver of tort as a cause of action cannot be resolved at the pleadings stage;4 and second, that if waiver of tort were to be a certified common issue, the issues of liability and quantum of restitution ought to be bifurcated at trial.5  

The approach endorsed in Sweetland threatens to be a massively expensive and frustrating procedure for defendants, especially since the Ontario Superior Court recently moved away from the authorities cited in Sweetland, calling for a re-evaluation of the practice of certifying waiver of tort claims as a matter of course6 and encouraging the determination of the issue without waiting for a full trial record.7  While Sweetland made reference to decisions in those proceedings, the court did not mention those directives for earlier resolution.

Key Take-Away Principle

The recent Ontario decisions on waiver of tort claims are promising, as they suggest that waiver of tort can now be resolved before the claim causes any costs in discovery. In Sweetland, however, the Nova Scotia court required a defendant to go all the way to trial before having the chance to challenge the validity of waiver of tort as a cause of action. One hopes that the Sweetland decision, despite offering a clear-cut procedure, does not gain traction and reinforce the troublesome recent history of delaying valid defences on a purely legal issue until a hearing that, more often than not, never comes.

Read the full decision in Sweetland v. GlaxoSmithKline LLC here.


2  2016 NSSC 18

3  For further reading on the historical development and modern application of waiver of tort, please see: J.M. Martin, "Waiver of Tort: An Historical and Practical Survey" Canadian Business Law Journal, Vol. 52, 473  

4  Heward v. Eli Lilly & Co., [2007] O.J. No. 404 (S.C.).

5  Goodridge v. Pfizer Canada Inc., 2010 ONSC 1095; Parker v. Pfizer Canada Inc., 2012 ONSC 3681 ("Parker").

6  Parker, supra note 4.

7  Andersen v. St Jude Medical, Inc., 2012 ONSC 3660.

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