A class action is usually started by Statement of Claim. This is the formal legal document that is issued at the Court House that sets out what is being claimed, by whom, against whom, as well as the factual and legal basis for the claim. The Statement of Claim is an extremely important document in a class proceeding. It will be carefully scrutinized at the certification hearing and is the centerpiece to the class proceedings process.

After the Statement of Claim is issued at the Court House and served on the Defendant(s), the obligation on the Plaintiff is to bring a motion to the court to request that the action be certified as a class proceeding under s.5(1) of the Class Proceedings Act. That section sets out a 5 part test. All five parts must be met or the request to certify will be denied. If all 5 parts of the test are met and there is no other good reason for denying certification, then the action will be certified as a class proceeding.

The party seeking to certify the action as a class proceeding has the obligation to meet the test set out in the Act. The 5 requirements are:

1. The pleadings must disclose a cause of action;

2. There must be an identifiable class of two or more persons that would be presented by the representative Plaintiff or Defendant;

3. The claims or defenses of the class members must raise common issues;

4. A class proceeding must be the preferable procedure for the resolution of the common issues; and,

5. There must be a representative Plaintiff or Defendant who,

a. Would fairly and adequately represent the interests of the class,

b. Has produced a plan for the proceeding that sets out a workable method of advancing the action on behalf of the class and of notifying class members of the proceeding, and,

c. Does not have, on the common issues for the class, an interest in conflict with the interests of the other class members.

For the first branch of the test, the courts will look only at the Statement of Claim. No evidence is permitted on this branch of the test. The court assumes that the facts stated in the Statement of Claim are true or capable of being proven true. It assesses whether the party bringing the action would be successful at trial if these facts are true. The test is not onerous where the claim being asserted is one of the usual claims that are advanced in lawsuits, for example, negligence. It becomes more difficult, but not impossible where the claim being asserted is novel; that is, it asserts a kind of claim that the courts have not previously recognized or dealt with.

The remaining four branches of the certification test require evidence. The amount of evidence required to satisfy these tests varies depending upon the nature of the case. Each case depends on its own facts and what is being claimed. Generally, a great deal of time and effort goes into preparing or responding to the certification materials.

Frequently, there are preliminary hearings (motions) in advance of the certification motion to deal with a wide variety of procedural issues. These procedural issues can be very important because they may give one party or the other a tactical advantage or simply delay the hearing which may be to one party’s advantage.

After each side has provided to the other side and the court their evidence for the certification motion, cross-examinations are conducted on the affidavits. The people who swore the affidavits are tested by cross-examination with the aim of getting additional evidence that will help persuade the court to certify or not certify the action and on which side the party stands.

Once the pre-certification motion materials and cross-examinations are complete, the lawyers for both sides file written argument with the court. They then appear before the judge to provide oral argument. This is the certification hearing.

The judge on the certification motion may,

1. Refuse to certify the action as a class proceeding because one or more of the tests have not been met;

2. Adjourn the hearing of the certification motion to allow one or both parties to file additional evidence;

3. Grant the order for certification for all or any part of the action. If the action is certified, the certification judge will define the scope of the class, for example “all patients who were implanted with XYZ mechanical heart valve between May 1997 and January 2000”. The definition of the class must be straightforward so that individual members of the public can easily determine whether they are potentially affected by this class action.

The certification judge will also define the issues that are certified. Often, the court cannot certify the entire action. It can carve out portions of the action where there are common issues that affect all of the class members. If this is done, then the action moves forward on the common issues to a trial of those issues. Once the trial is done, individual issues can move forward.

For example, Mr. Smith alleges that the defendant, XYZ, manufactured a drug that had dangerous, undisclosed side effects. He and many others suffered a variety of medical complications from the use of that drug. He alleges that the manufacturer was negligent in the pre-market testing which it performed and in failing to warn consumers about these side effects. On certification, the court may certify the issues relating to whether the company was negligent and whether it breached its duty to warn consumers. This finding would apply to all members of the class. Once that claim is decided, and assuming Mr. Smith is successful on the common issue, then he and any of the affected class members would be able to proceed to trial individually for a determination of their damages. The court would then assess each person’s loss in light of their individual circumstances because not all users were affected in the same way or to the same degree.

In some cases, the court can certify the entire action. Certainly, the courts preference is to certify only where doing so will advance the litigation for all of the class members in a meaningful way. The court will not certify where there are too many individual issues to be litigated so that the lawsuit becomes a “monster of complexity” or too unwieldy.

Unlike other class proceedings legislation in Canada, the Ontario Act has an opt out provision. If an action is certified as a class proceeding, then notice is given to members of the public, usually by newspaper advertisement. These notices warn the members of the public that the action has been certified and that if they fit within the definition of the class, they will be bound by the outcome of the lawsuit unless they opt out in writing. The notice will set out how to opt out.

In a class proceeding, one or more individuals represent all of the members of the class. If they are successful, then everyone in the class wins. If they lose, then everyone in the class loses. If the action is not certified, however, that is not a determination of the claim on the merits. It simply means that the action cannot proceed as a class proceeding but has to be asserted as an individual claim. The only exception is if the court determines that there is no cause of action disclosed. In that case, the action really has been dismissed because it is not a claim which the courts will recognize.

To be certified, the party seeking certification must satisfy the judge that a class proceeding is the preferable procedure. The Act has three principle goals:

1. Judicial economy or judicial efficiency;

2. Increased access to justice;

3. Deterrence

In asking itself whether it makes sense that the action proceed as a class action, the court takes a pragmatic approach. Will this class proceeding save time and judicial resources? Will it meaningfully advance the litigation that would otherwise have to proceed by multiple individual claims? Is there another process, perhaps test cases or a government sponsored compensation scheme, that would be more effective? Are the class members being certified part of a group that have traditionally been marginalized on our society or have some other barriers that have traditionally inhibited their ability to marshal evidence and to have access the courts, e.g. a physical disability? Is the claim one that would simply not be brought because of the amount of money at stake per claimant unless certified as a class action? Are the issues raised in the claims ones that may deter future wrongful conduct by this defendant or others?

One of the advantages of the Ontario Act is that once the Statement of Claim is issued and until the action is certified or rejected, all limitation periods for class members are suspended. This means that claims will not be barred if the limitation period runs out during the time period between when the action is commenced and when the certification motion is determined. This can be a significant advantage for class members.

The provisions of the Class Proceedings Act are intended to provide a manageable process for advancing or defending mass claims. Since the introduction of the legislation, the courts have dedicated special judges in each region who are responsible for the class proceedings that are commenced in their area. These judges have developed a high degree of expertise in the special requirements of the Class Proceedings Act. They are also charged with responsibility for ensuring that these large actions do not bog down.

If a class proceeding is settled before trial, the settlement must be approved by a judge. If the action is settled before certification, then the parties must seek both the judge’s approval of the settlement and his consent that the action be certified. On a motion to obtain the court’s approval, the parties will again have to file evidence that establishes to the satisfaction of the court that all of the class members are being treated fairly.

A class proceeding is a flexible procedural tool. The court has the ability to reshape the action as it moves along, and in appropriate cases, can even decertify an action that was initially certified.