Ontario's Attorney General has now announced that the amendments to the Class Proceedings Act, 1992 (the "CPA"), as found in Bill 161, the Smarter and Stronger Justice Act, 2020, entered into force on October 1, 2020. The amended legislation can be found here.
These significant changes to the CPA were proposed late last year after extensive review of the legislation by the Law Commission of Ontario. The key proposed changes were discussed in a previous blog post.
Subject to specified exceptions outlined in s. 39 of the CPA, the new rules will only apply to class proceedings commenced on or after the amended CPA's entry into force, being October 1, 2020. As discussed in our prior post, the key aspects of the amendments will change class proceedings going forward:
- If a Plaintiff does not file a certification record or timetable within one year of commencing the action, it will be dismissed for delay (s. 29.1(1)). Pursuant to s. 39(2), the clock starts running on October 1, 2020 to dismiss existing actions for delay.
- The test for certification now requires that common issues predominate over individual issues in order for a class action to be considered the preferable procedure. Furthermore, Courts are directed to consider whether a variety of alternative proceedings are preferable to a class action (s. 5(1.1)).
- Ontario Courts are now required to decide whether Ontario is the preferable forum for the procedure, which can take place prior to the motion for certification (s. 5(6), 5(8)).
- Plaintiffs must register their proceedings according to the regulations, and serve an Ontario notice of certification on counsel advancing parallel proceedings in other provinces (s. 2(1.1)).
- Defence motions to narrow or dispose of the proceeding will be presumptively determined prior to the motion for certification, overturning prior jurisprudence holding that such motions should be delayed until at least the certification stage (s. 4.1).
- Plaintiffs are barred from making material amendments to a proposed class action on appeal from a certification decision, and defendants and plaintiffs now have the same direct right of appeal from a certification decision to the Ontario Court of Appeal (s. 30(1)-(2)).
- Carriage motions should be decided faster (within 60 days of commencement of the first action) and on a set of defined criteria, with no appeals allowed (s. 13.1, 13.1(5)).
- The Class will only recover the costs of giving notice of certification if the claim actually succeeds (s. 22(1.1)).
- If a Plaintiff receives third-party funding, it is now mandatory to disclose the fee sharing arrangement and the defendant will have a direct right of action against the funder for costs (s. 16(5)(e), 33.1, 33.1(8)).
- Class counsel is now required to make full and frank disclosure of prescribed factors intended to assist the court in assessing the fairness of a proposed settlement before it is approved (s. 27.1(7)) and the Court may hold back Class counsel's fees until it is satisfied with the distribution of settlement funds (s. 32(6)).
In addition to the changes introduced by the amendments to the CPA statute, new regulations to the amended CPA have also been brought into force, as follows:
- A new General Regulation, which includes:
- Details regarding the registration of proceedings commenced under the CPA; and
- Technical rules related to the timing of the commencement of a proposed class proceeding that includes a claim under s. 138.3 of the Securities Act (Liability for secondary market disclosure).
- A new Subrogated Claims Regulation, containing details necessary to implement the new s. 27.3 of the CPA;
- Consequential amendments to O. Reg. 771/92 (Class Proceedings) under the Law Society Act; and
- Minor amendments to R.R.O. 1990, Reg. 194 (Rules of Civil Procedure) under the Courts of Justice Act.
These legislative changes represent a major shift for class proceedings in Ontario. We will continue to follow and post about notable cases as analysis of the new statute emerges.
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