Law Times

Page 12 September 1, 2014 • Law Times www.lawtimesnews.com FOCUS Access the most up-to-date information on the latest developments in family law. New in this edition • Full text of the Disclosure of Adoption Information Regulation, O. Reg. 272/08 • Full text of the Recommended Standard Terms for Support Orders Regulation, O. Reg. 454/07 • Full text of the Exemption from [Child and Family Services] Act — Mohawks of Akwesasne Regulation, O. Reg. 116/11 • Amendments made to the Ontario Family Law Rules, O. Reg. 114/99 • Amendments made by the certain regulations under the Family Orders and Agreements Enforcement Assistance Act, SOR/2013-104, and by the Civil Marriage of Non-residents Act, S.C. 2013, c. 30 New Edition Consolidated Ontario Family Law Statutes and Regulations 2014-2015 Consulting Editor: Brahm D. Siegel Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 986121-65203 $102 Softcover approx. 1340 pages July 2014 Annual volumes supplied on standing order subscription Multiple copy discounts available 978-0-7798-6121-7 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. 00222FF-A44747 Once you opt out, you're out — with some exceptions By arshy mann Law Times pting out of a class ac- tion can seem like a reasonable choice at the time. But what if someone reconsiders and wants to join a class later on? It's possible in Ontario but only under a limited set of circumstances. According to Emily Larose, a partner with Cassels Brock & Blackwell LLP's litigation group, there are a number of reasons why people opt out of class actions. "I think sometimes people feel that across the scale of potential harm that they are at the higher end and they believe in an indi- vidual action, they have a better chance of getting a better result for themselves," she says. And other times, people sim- ply have no intention of seeking damages and don't want to be part of any litigation or they disagree with the way in which the class ac- tion is proceeding, says Larose. "It really will just be an individ- ual choice," she says. Sometimes, people misun- derstand the notices and mis- takenly opt out when that wasn't their actual intention. "I can tell you it's happened in a very recent case of mine," says Glenn Zakaib, also a partner with Cassels Brock. "We've settled the case and it's been approved and somebody filed both a claim under the class proceeding and filed an opt-out form." Under those circumstances, the person would technically have opted out of the class action. According to Zakaib, that situ- ation only usually happens at a preliminary stage and the claims administrator usually sorts it out. While large class actions involving consumer products such as food or drugs are oen more likely to produce a few po- tential claimants who choose to opt out, sometimes significant percentages of people in small cases will elect to do so as an act of protest. "Franchise class actions are a great example," says Larose. "It's a smaller group but it's quite a vo- cal group and different people feel different ways about things. And in those cases, there can be some significant opting out be- cause there's at least two different factions that feel different ways about things." One such case involving a group of franchisees suing their parent company was 1250264 Ontario Inc. v. Pet Valu Canada Inc. Aer the notices of certi- fication went out, a group of franchisees opposed to the class action, calling themselves "con- cerned Pet Valu franchisees," ini- tiated a campaign to try to con- vince other franchise owners to opt out of the lawsuit. ey were very successful and by the end of the opt-out period, more than half of the class members had le the lawsuit. Justice George Strathy con- cluded there was a "reasonable probability" the people who had opted out had done so because of misleading information pro- vided by the opposing franchi- see group. He set aside the opt- out decisions and allowed those who had made that election back into the class. e appeals judge, however, disagreed and reinstated the opt-out decisions in a 2013 rul- ing. At the Ontario Court of Appeal, then-chief justice War- ren Winkler noted it was a group of franchisees that had spread the alleged misinformation and not the defendant company. "e information dissemi- nated amounted to no more than opinion as to the advisabil- ity of the lawsuit from a business perspective," he wrote. "e communications here were simply acceptable intra- class debate." "Despite my extreme respect for Justice Strathy, who I think is a tremendous jurist, I think that the decision at the appeal level was the right one," says Zakaib. Zakaib believes allowing people to opt back in, except un- der the most egregious circum- stances, would be unjust. "A defendant shouldn't be faced with a situation of being ambushed by people who decide to opt back in because they think the grass is now greener on the class action side when they've originally opted out," he says. Larose says letting people opt in at the settlement stage would create unfairness for the other class members as well. "If the parties negotiate a settlement fund and a formula for dividing that up, but then 10 more people opt back into the class, then that settlement fund may no longer have been appro- priate and it may no longer be fair to the other class members that chose not to opt out because they're going to get a prorated, smaller portion," she says. A more recent case, Cannon v. Funds for Canada Foundation, applied the precedent set in the Pet Valu case while leaving the door open for people to opt back in but only under very stringent circumstances. In Cannon, four litigants who had opted out of the lawsuit tried to join it aer the parties had ne- gotiated a multimillion-dollar settlement. But Justice Edward Belobaba denied their applica- tion. "Opting out does not mean 'wait and see,'" he wrote. "If the 'opting-back in' party cannot establish that he or she was misinformed about the opt-out procedure or its con- sequences, or was the victim of some misconduct (such as threats, coercion or intimida- tion) the decision to opt out must remain intact," wrote Be- lobaba. "Otherwise, the integrity of the opt-out process and the impor- tant values of predictability and finality that it strives to achieve would be severely undermined." Zakaib believes the case law in Ontario has reached the right result. "Once you're out, you're out and you shouldn't get a second kick at the can," he says. LT O Franchise cases are one area where there are often lots of people who opt out, says Emily Larose.

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