Law Times

Page 8 April 7, 2014 • lAw Times www.lawtimesnews.com FOcUs ON class actions Statistics shed light on class actions in Canada Proportion of cases going to trial has remained relatively constant he Law Commission of Ontario, which has em- barked on a wide-rang- ing study of the effi cacy of class proceedings in Ontario, will have its hands full. " e commission is facing an unenviable task in trying to de- termine what has been happen- ing, especially in the pre-2005 period," says Mary Paterson of Osler Hoskin & Harcourt LLP's Toronto offi ce. Paterson should know. She's one of the lawyers intimately in- volved in a study of class action statistics spearheaded by her part- ner at Oslers, Sonia Bjorkquist. For example, Oslers has deter- mined there are approximately 500 active class actions, in the sense that they remain on the court books, in Ontario. But it's diffi cult to determine how many of them involve the same subject matter or how many have eff ec- tively been abandoned and are just sitting there. Oslers has also been able to determine that about 700 class ac- tions have begun since the Class Proceedings Act came into force some two decades ago. From all appearances, however, less than one-third of them have been resolved. "A huge number of the un- resolved cases predate 2005 and it appears that about one- third of these have been certi- fi ed," says Paterson. "More could have been certifi ed, but we can't be sure because there are no reported decisions with respect to many of the cases." e diffi culty the law com- mission will have, then, is de- termining how expeditious the system has been. "For example, the parties might deliberately be waiting around to see what happens in the U.S. or other Canadian jurisdictions before proceeding further with a case," says Paterson. "It's not always easy to fi gure out whether or why a case is dormant." Also a concern for Paterson is the practice certain groups have adopted of fi ling a notice of action simply to obtain publicity. "In some cases, it's about nothing more than getting a press release for a special interest group," she says. Even if the results of the Os- lers study aren't defi nitive, the law commission should fi nd them useful in providing an overall picture of Ontario's class action regime. For example, the results so far tend to debunk the view that a greater proportion of class actions are going to trial largely on the theory that lawyers and their cor- porate clients are becoming more strident in their resistance to what they call "greenmail" involving plaintiff s advancing a class action in the hope that the cost of settle- ment will be less than the cost of proceeding to trial. Instead, the proportion of cases going to trial has remained relatively constant in the eight- to 10-per-cent range, suggesting that any increase in trials derives from an increase in the overall num- ber of class actions fi led. Pension matters and cases against govern- ments, however, far outstrip the norm with some 25 per cent of them making it to trial. In another study, Jonathan Foreman of Harrison Pensa LLP in London, Ont., has compiled actual trial statistics from the in- ception of class action legislation in the various provinces in Can- ada to December 2013. Of the 94 Canadian class actions tried, the vast majority, 63, were in Quebec. Ontario had 18; British Columbia had eight; and no other province had more than one. Of the 90 trials that went to judgment, plaintiff s won 57 or about 63 per cent of them. e re- sults from Quebec fi gure strongly into that overall number for Can- ada. Foreman scores the outcomes in that province as 41-17, or some 71 per cent, in plaintiff s' favour. Ontario results were more bal- anced at 10-8 in plaintiff s' favour while defendants drew blood in British Columbia where they suc- ceeded in fi ve of eight trials. According to the Oslers study, a bit more than 90 per cent of class actions resolved by way of settlement. Some 16 of these settlements, all against govern- ments, averaged in excess of $800 million. "But when you backed these out, the average settle- ment range was about $20 mil- lion," says Bjorkquist. Trial judgments, including cases dismissed by the court, averaged about $28 million. "Backing out the dismissals raised the average judgment to $70 million," says Bjorkquist. Whatever the relative out- comes, trials are now a regular feature of the class action land- scape and, according to Fore- man, they'll remain so. "Not so long ago, the me- chanics of class action trials were mysteries to all but a hand- ful of practitioners," he says. "But that's no longer the case, which means that lawyers are more comfortable advising clients of the risks involved in and the management of trials." At the same time, the growing number of trials also works in fa- vour of settlement. "Trial results help people cali- brate risks," says Foreman. " e results become an objective input that assists opposing parties in ar- riving at similar results in assess- ing their cases and that works in favour of settlement." e Oslers study also reveals some interesting facts about the duration of proceedings. "Our initial observation is that class actions on average take about four years to settle once you re- move the outliers from the calcu- lation," says Bjorkquist. "Taking a case to judgment, however, produces a rough aver- age of about six years." ese statistics, Bjorkquist concludes, won't likely make any of the parties happy. "What the numbers indicate is that most complex cases don't settle early," says Bjorkquist. "My own experience with business- critical litigation suggests that it does in fact take longer to settle class actions, which tend to get traction more slowly than indi- vidual actions." LT 'It's not always easy to figure out whether or why a case is dormant,' says Mary Paterson. www.kuretzkyvassos.com Tel: (416) 865-0504 w Kuretzky_LT_Apr7_14.indd 1 14-04-02 9:08 AM BY JULIUS MELNITzER For Law Times T

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