Ontario Court Reaffirms That Compensable Loss Is A 'Fundamental Prerequisite' To Certification Of A Class Action

Key takeaways

• The Ontario Superior Court denied the certification of the proposed class action in Donegani v. Facebook, Inc. due to lack of evidence for compensable loss.
• Justice Akbarali emphasized that without compensable loss, the class action wouldn't promote access to justice or judicial economy.
• The plaintiffs conceded that pecuniary damages were unlikely to exist and the Court found that a claim seeking only nominal damages was insufficient.
• The decision reinforces the trend of courts emphasizing their gatekeeping role and denying class action certification when only nominal damages are sought.

On October 24, 2025, the Ontario Superior Court of Justice denied the plaintiffs' motion to certify a proposed class action in Donegani v. Facebook, Inc.¹ Justice Akbarali held that the proposed class proceeding was not the preferable procedure, especially given that there was no evidence of compensable loss. Justice Akbarali confirmed that evidence of compensable loss is a "fundamental prerequisite" to certifying a class action.

Background

The plaintiffs alleged that Facebook breached its user contracts by allegedly sharing user data with various third-party apps and device makers. Justice Akbarali's decision followed the third certification hearing in this action. In 2022, after the hearing began, the plaintiffs sought and were granted an adjournment to obtain more evidence and amend their statement of claim. In 2024, Justice Akbarali made initial findings on the cause of action and common-issues criteria.² She also directed the plaintiffs to return with a new class definition and further submissions addressing, among other things, the workability of the class definition and the preferable-procedure requirement.

Notably, the plaintiffs conceded that there were unlikely to be pecuniary damages and took the position that, if the Court certified the issue of nominal damages as a common issue, the plaintiffs would disclaim compensatory damages and claim only nominal damages.

Court denies certification

Justice Akbarali held that a class proceeding was not the preferable procedure for the putative action, finding that regardless of whether the plaintiffs disclaimed compensatory damages, there was no evidence of compensatory damages in the record (and the plaintiffs conceded that such damages were unlikely). Relying on the Supreme Court of Canada's decision in Atlantic Lottery Corp Inc. v. Babstock,³ as well as several recent Ontario court decisions affirming the same principle, Justice Akbarali stated that "the need to show some evidence of compensable loss is a fundamental prerequisite for the certification of a class proceeding".

Moreover, Justice Akbarali found the following:

• Access to justice: Without any compensable loss, the action would not meet the goal of promoting access to justice.
• Judicial economy: Absent any compensable harm, "in an underfunded justice system, judicial resources are better spent elsewhere."
• Behaviour modification: Regulatory proceedings were a preferable way of encouraging behaviour modification, especially without any evidence of compensable loss.

The plaintiffs also failed to satisfy the preferable-procedure criterion because Justice Akbarali found that the proposed class action would not be fair, efficient or manageable, given the number of individual issues the plaintiffs' own litigation plan sought to canvass (before the individual trials even began). This concern was amplified by the plaintiffs' claim that the class would be "many millions of people." Justice Akbarali noted that to undertake those significant steps "without a shred of evidence of compensable loss would be contrary to the goals of class proceedings."

In addition to the fatal preferability issues, the plaintiffs also failed to provide a workable class definition. Justice Akbarali held that the proposed class definition was inappropriate because it was both overbroad and underinclusive, and it required discovery relating to individual class members' circumstances to determine its limits.

Takeaways

The Donegani decision builds on a growing trend of cases emphasizing courts' gatekeeping role at the certification stage and confirms that courts continue to deny certification where only nominal damages are sought. Justice Akbarali succinctly explained why an action framed in that way would not further the goals of class proceedings.

Oslerrepresented Facebook, Inc. in this action with a team led by Mark A. Gelowitz, Robert Carson, Lauren Harper and Clare Barrowman.

Footnotes

1 Donegani v. Facebook, Inc., 2025 ONSC 6020.

2 Donegani v. Facebook, Inc., 2024 ONSC 7153.

3 Atlantic Lottery Corp. Inc. v. Babstock, 2020 SCC 19.

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