Class Actions: Moving Beyond Borders

As class proceedings in Canada continue to bloom from their relative infancy, the courts will play a key role in guiding the future directions of such proceedings. Now is the time for courts in Canada to lay the foundations for what is sure to become a class action packed future.  As part of this class action expansion into the Twenty First century, I will focus on the development of the jurisdictional boundaries at play within Canada in the context of class proceedings.

As more corporate players engage in the manufacturing and distribution of their products and services, it is not uncommon for these operations to be carried out on a national, international or even global scale. The good old days of carrier pigeons, horse and buggy and messages in a bottle have been displaced by instantaneous email capabilities and other technological innovations enabling the flow of products and services to the masses like never seen before. Harms caused by some corporate activity are no longer just confined to provincial or national borders. Rather they are increasingly becoming international and global in scope.

The more consumers that have access to these products and services, the greater the likelihood is that mass harm could occur, which may be effectively handled through national or even international class actions.  However, what are the jurisdictional limits when prosecuting such a class action?

In the recent Ontario carriage motion of Sharma v. Timminco Ltd., both Kim Orr and Siskinds, two preeminent class action plaintiff firms were squaring off over which firm should have carriage of a class action matter. One of the issues under consideration was whether Kim Orr’s intent to retain the services of a foreign law firm was appropriate. Justice Perell held that there is nothing wrong with plaintiff’s counsel in a class proceeding retaining the assistance and expertise of a foreign law firm based in another country so long as that foreign firm does not assume “de facto” role as lawyer of record or usurp the role of the Ontario lawyer. It was also held that the foreign firm cannot have a proprietary interest in the class proceeding. On the facts of this case, the foreign firm retained by plaintiff’s counsel was merely hired as an advisor drawing from its own experience. It was not controlling the litigation, and merely served an advisory role as well as for the provision of investigative and documentary management services.

This decision is significant, as it will likely encourage Canadian firms to retain the expertise of foreign firms when prosecuting class actions. Many of these foreign firms may have useful insight to the matters at play as they may have already litigated a parallel class action of similar nature in its own jurisdiction. In addition, class actions in the United States have been around longer than in Canada so it certainly can add depth to assisting Canadian counsel plan their approach by listening to experienced American counsel.

Another issue for future consideration is whether a national class action has constitutional implications. For example, can a provincial court issue a judgment in a class action binding individual plaintiffs residing out of province; in effect preventing them from brining an independent action asserting the same claim in their own jurisdiction (or elsewhere)? It has been argued that as long as these non-resident plaintiffs received sufficient notice about the class action, and have an individual claim that would have a real and substantial connection to the class-action issuing province, then including them in the class would not be unconstitutional.

These issues are likely to become clearer over time.

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