Canada: Product Liability: Important Developments In 2020

2020 has seen several important developments in product liability law.

These developments signal that a variety of challenges are on the horizon for plaintiffs in 2021 in three specific areas: product liability class actions alleging adverse health effects; claims relating to the sale of prescription medications; and "mass tort" claims.

No "workable methodology": an effective defence to certification

In 2013, the Supreme Court of Canada affirmed in Pro-Sys Consultants Ltd. v. Microsoft Corporation¹ that, at certification, plaintiffs must demonstrate a "workable methodology" for determining general causation on a class-wide basis. Since then, this issue-which has often been decided in the plaintiffs' favour-has arisen frequently in proposed product liability class actions alleging adverse health effects. In 2020, two actions have bucked this trend and may foreshadow similar outcomes in 2021.

The first action, Organigram Holdings Inc. v. Downton², arose out of a 2016 recall of certain cannabis products which contained trace amounts of pesticides not approved for use on cannabis. In addition to economic loss claims, the plaintiff also alleged adverse health consequences.

The action was certified and the defendant appealed the portions of the order relating to the allegations of adverse health consequences, arguing, among other things, that the plaintiff had failed to establish a workable methodology for determining general causation on a class-wide basis. The Nova Scotia Court of Appeal agreed, concluding that while the plaintiff's expert had opined on theoretical harms that could be caused by certain of the pesticides, the plaintiff had provided no evidence that could link the symptoms alleged with the plaintiff's exposure to the product.

Courts are bringing increased scrutiny to the requirement that plaintiffs demonstrate a workable methodology to determine harm on a class-wide basis.

The second action, MacInnis v. Bayer Inc. et al.³, yielded a similar result. MacInnis related to allegations that a permanent contraceptive device sold by the defendants was associated with "bleeding, bloating and other side effects." The Saskatchewan Court of Queen's Bench dismissed the plaintiff's certification application on several grounds, including that she had failed to provide a credible or plausible methodology for assessing either the reasonableness of the alleged risks, or the comparative benefits of the defendants' device and other forms of permanent contraception on behalf of all class members.

Takeaway: These decisions suggest that, in the context of proposed product-liability class actions, courts are bringing increased scrutiny to the requirement that plaintiffs demonstrate a workable methodology to determine harm on a class-wide basis, and are showing a greater willingness to dismiss certification motions when that requirement is not met.

Limiting the scope of consumer protection claims in Québec

The Québec Consumer Protection Act (CPA) includes certain consumer-friendly presumptions, including an absolute presumption of prejudice if a merchant or manufacturer fails to fulfil an obligation imposed by the CPA, and an irrefutable presumption that the manufacturer knows all potential risks and dangers associated with a product's use. Following Brousseau et al. v. Abbott Laboratories Co.⁴, these presumptions are not available for claims relating to the sale of prescription medications.

Brousseau related to allegations of certain neuropsychiatric side effects associated with the use of a prescription antibiotic. The plaintiffs relied, in part, on the presumptions in the CPA to advance their claim, which was dismissed following a common issues trial. The Québec Court of Appeal upheld the lower court decision and clarified that the sale of prescription medications by a pharmacist is not a consumer contract governed by the CPA. Leave to appeal to the Supreme Court was dismissed in April 2020.

The significance of Brousseau is well illustrated by comparison with cases involving non-prescription (over-the-counter) products. In Gauthier v Johnson & Johnson Inc.⁵, the plaintiff alleged that the defendants had misled consumers by failing to warn of potential risks and side effects associated with the use of certain OTC products, but did not allege that she had experienced adverse events associated with their use. Despite this, the court found that the plaintiff's proposed action presented a good "colour of right" and was suitable for authorization because it raised allegations relating to the enforcement of the defendants' duty to inform consumers in the marketplace in accordance with the CPA, which gives rise to an absolute presumption of prejudice⁶.

Takeaway: Brousseau affirms that plaintiffs will no longer be able to take advantage of the presumptions flowing from the CPA in claims relating to prescription products, including the presumption that the manufacturer is aware of all material risks. This development helps to level the playing field for defendants and may increase their chance of resisting authorization in proposed class actions relating to those products.

"Mass tort" claims and the challenges associated with "test cases" or "bellwether" trials

In "mass tort" proceedings, plaintiffs' counsel typically seek to advance multiple virtually identical actions, often to avoid the time and expense of a class action certification motion. Recent examples include cases relating to breast implants, e-cigarettes, pelvic mesh, hernia mesh, permanent contraceptive devices and anti-malarial medication.

Though not a product liability case, Arya v. Nevsun Resources Inc.⁷ offers insight into the challenges plaintiffs may face in attempting to advance "mass tort" claims though the vehicle of "test cases" or "bellwether" trials. In Arya, the plaintiffs were refugees who brought claims in British Columbia relating to conditions at an Eritrean mine. As they were not B.C. residents, they could not bring their claims under the Class Proceedings Act, so they commenced 11 actions involving 96 plaintiffs, and sought an order allowing several actions to proceed as "test cases" to obtain rulings on issues of fact and law to provide a basis to resolve the remaining claims.

While the parties agreed that mechanisms exist in the B.C. rules, the Law and Equity Act and under the court's inherent jurisdiction to permit "test cases", they disagreed as to whether in the circumstances they were appropriate or fair. The court dismissed the plaintiffs' proposal on the basis that it would be prejudicial to the defendants, would not promote settlement, and would result in significant delay if the claims were not resolved following the first test case. The court also noted challenges associated with selecting test case plaintiffs who were fairly representative, and expressed concern that the proposal that findings of fact from the test cases would be binding on subsequent proceedings created the risk of unjust results.

Takeaway: While it is likely that plaintiffs' counsel will continue to issue "mass tort" claims in 2021, we anticipate that few will take steps to advance their claims to "test case" or "bellwether" trials due to the challenges associated with these procedures.

Footnotes

1 2013 SCC 57

2 Organigram Holdings Inc. v. Downton, 2020 NSCA 38, application for leave to appeal to the Supreme Court of Canada dismissed on November 5, 2020.

3 2020 SKQB 307

4 Brousseau v. Abbott Laboratories Limited, 2019 QCCA 801 (CanLII), application for leave to appeal to the Supreme Court of Canada dismissed on April 9, 2020.

5 Gauthier c. Johnson & Johnson Inc., 2020 QCCS 690 (CanLII)

6 The plaintiff also pleaded breaches of the Competition Act and the Civil code of Québec.

7 Arya v. Nevsun Resources Inc, 2020 BCSC 294

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