Major reforms of Ontario's class action law needed, new report says

TORONTO — The law governing class-action lawsuits in Ontario needs far-reaching reforms to ensure they are a fair, efficient and effective way for plaintiffs to get justice, a report released on Wednesday concludes.

The report by the Law Commission of Ontario, billed as the first independent, comprehensive assessment of the provincial legislation in 27 years, aims among other things to tackle concerns over the fees lawyers earn, the sometimes ugly fights among competing law firms, and what is often a protracted and expensive process.

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Included in the report are more than two dozen recommendations covering virtually every step, from initiating litigation to distributing proceeds and reporting on the results.

Ontario enacted the Class Proceedings Act in 1992 as a way to allow people with a common grievance to sue as a group — governments and big corporations are frequent targets — without having to dig into their own pockets and prove claims individually.

Increasingly, claims involve thousands of people and settlements worth hundreds of millions or even billions of dollars. They have also led to hotly contested fights among law firms over who gets "carriage" of the litigation.

"There is a strong belief within the class-action community that the system for determining carriage in Ontario is inefficient and unpredictable," the report states. "The (act) needs dedicated new provisions to better manage and focus carriage hearings ... to promote high-quality representation for class members, improve judicial economy, and increase predictability and finality in carriage decisions."

Recommendations include setting up a process and timetable for determining which among competing law firms gets to represent plaintiffs.

The report, two years in the making, also takes aim at the fierce criticism of the fees law firms collect — often in the tens of millions of dollars — if the action proves successful. In many cases, court-approved legal fees dwarf what individual plaintiffs end up with.

"Lack of compensation to class members is one of the most common and trenchant criticisms of class actions," the report states. "Many people believe that access to justice in class actions is hindered by ... claims in which minimal compensation is paid."

The report does note that lawyers would be reluctant to gamble on pressing a difficult lawsuit if fees are too low. Still, it urges better protection for plaintiffs, including increased transparency, monitoring and measurement of settlements, and reporting in detail the outcome.

Other areas the report addresses include concerns over "copycat" claims in which law firms simply piggyback off the work of another firm that is actually pursuing results.

"There is a pressing need to establish clear and enforceable rules and benchmarks early in the class action litigation process," the report states. "The (commission) is recommending several targeted but significant reforms that will establish reasonable expectations — and firm consequences — for parties to advance their actions in a timely manner."

In all, figures suggest Ontario saw roughly 1,500 class actions between 1993 and February 2018, with more than 100 new ones now being filed annually. Roughly three quarters get certified — meaning they fulfil the requirements for staking a group claim.

"Class actions have become one of the most high-profile and far-reaching legal procedures in the Canadian justice system," Andrew Pinto, commission chairman, said in a statement. "The report's 47 recommendations represent a necessary and important update to this very significant piece of legislation."

The report urges all levels of government to work together to develop a framework for dealing with class actions that span multiple provincial and territorial jurisdictions. It also takes aim at new legislation under Premier Doug Ford that could put the government beyond the reach of the courts by barring negligence lawsuits against it.

Kirk Baert, a Toronto-based class-action lawyer whose firm has found itself in pitched battles with other legal firms and come under fire from a judge about the level of fees negotiated, called the report "well thought out and fairly balanced."

The law commission is an independent organization that researches legal issues and recommends improvements.

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