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Ontario class action defendants able to “get out early”


November 15, 2010   by Canadian Underwriter


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*** CORRECTION***
This item corrects an item posted on Nov. 12, 2010. In the original item, an error was made in the first paragraph, and should have said that plaintiffs must show a cause of action against the defendants named in a class action suit. Canadian Underwriter apologizes for the error.

Saskatchewan’s Court of Appeal will decide if class action plaintiffs are to be held to Ontario’s higher standard, which is to have a cause of action against each of the defendants named in the suit, rather than the B.C. model, which requires a plaintiff to have a cause of action against only one named defendant in a suit, said Mirilyn Sharp, a lawyer at Blaney McMurtry LLP.
In Ontario, a class action defendant can “get out” before incurring large costs if they can show the statement of claim fails to name a plaintiff who has a reasonable cause of action against them, wrote Sharp in the article Class Actions: Getting Out Early, published in Blaney McMurtrey’s newsletter.
This is not the case in British Columbia though. In B.C., she wrote, it is sufficient if the plaintiff has a cause of action against only one of the defendants, on the theory that there are probably “class members” who have a cause of action against the remaining defendants.
Saskatchewan’s lower courts have made two decisions which follow the B.C. approach over the Ontario approach, Sharp continued.
But, Rosa Alves et al v First Choice, My Travel, Red Seal and Transat, a case before Saskatchewan’s Court of Appeal, may reverse that.
“Blaney McMurtry will be arguing the Appeal in Saskatchewan and we hope to persuade the court that Saskatchewan ought to follow the Ontario approach, thereby forcing plaintiff’s counsel to find, for every defendant sued in a class action, a viable plaintiff with a cause of action against the defendant,” she wrote.
“Meanwhile, keep this argument in mind for class actions commenced against you in Ontario, as you may be successful in having the action against you dismissed on a preliminary basis if you can demonstrate that there is no named plaintiff who has a viable cause of action against you.”
She noted though, that if a person who does have a cause of action against a defendant is found prior to the expiry of any limitation period, a defendant may be sued again.