Law Times

LAW TIMES • MARCH 10, 2014 PAGE 13 www.lawtimesnews.com Is SCC at odds with itself over expediting class actions? s the Supreme Court of Can- ada at odds with itself about whether or not it wants to ex- pedite class action proceed- ings? e court's recent decision in AIC Ltd. v. Fischer suggests the answer is likely in the affi r- mative. Fischer, of course, dealt with the question of whether plain- tiff s who have received settle- ments in regulatory proceedings could bring class actions against the settling respondents. At Fischer's core, however, is the question of whether a class action is the preferable proce- dure for dispute resolution in such circumstances. In answer- ing that question, the top court ruled that judges must go be- yond the procedural diff erences between courts and regulatory bodies to examine the substan- tive aspects of a case. ere can be little doubt that this approach will complicate certifi cation proceedings even further for it means judges must delve into the merits of a case suffi ciently to determine the relative remedies plaintiff s can achieve in diff erent forums. In Fischer, for example, the court found there was some evidence to support the claim that the regulatory settlement of $205 million didn't amount to full compensation. " e court relied on expert evidence adduced by the plain- tiff in support of this point and found that there was no reason to believe that this additional recovery, if achieved [in the class action], would be consumed by the costs of a class action," says class action defence lawyer Lau- ra Fric of Osler Hoskin & Har- court LLP. In that case, the fact that the settlements had occurred and the sum awarded to the plain- tiff s was easily ascertainable was helpful when it came to reach- ing a conclusion. e question would be a far more diffi cult one, however, if plaintiff s brought a class action before regulatory proceedings had begun or were complete and a court had to de- termine the likely outcome of the regulatory matter as well as the lawsuit. e upshot would almost certainly be a time-consuming and expensive battle of experts. " e Supreme Court's ap- proach to determining prefer- ability, unlike the Court of Ap- peal's approach, opens the door to competing expert evidence relating to potential recoveries and the costs of class proceed- ings and the potential costs of pursuing a class action as op- posed to other forms of recov- ery," says Fric. And if that's not complicated enough, Fric notes "costs to de- fendants and the judicial system could also be part of the future analysis in some cases, par- ticularly where other less costly roads to recovery, including reg- ulatory avenues, are available." It's not that leading evidence on the issue of preferable proce- dure is new to plaintiff s or de- fendants. "What is new is that the par- ties have been explicitly directed to address a new battleground based on the [Supreme Court's] cost-benefi t analysis in Fischer," says Fric. " ere is certainly room for defendants to be more assertive in demonstrating that plain- tiff s' goals in a class action are no more than pie in the sky and that the expected recovery in court may be even less than in the regulatory proceedings." But not everyone sees Fischer as complicating the certifi cation process. "I don't think the case adds any further burden to establish- ing preferability," says Celeste Poltak of Koskie Minsky LLP, a Toronto fi rm that represents plaintiff s in class actions. "On the whole, I see it as a very liberal decision from plain- tiff s' point of view." Still, it's at least arguable that the Supreme Court has opened a Pandora's box with its approach to preferability. If so, it has done little to expedite and may well have hindered the progress of the signifi cant proportion of class actions intertwined with regulatory proceedings. It's diffi cult to reconcile this approach with the very liberal standards the Supreme Court has set in recent cases for class action certifi cation thresholds. It's just as diffi cult to reconcile the philosophy behind Fischer with cases like Hryniak v. Mauld- in, a case that cut a broad swath for courts' use of summary judg- ment all in the interest of expe- diting justice by reducing costs and delays. 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