Stewart McKelvey

CONSUMER CLAIMS AND CLASS ACTIONS IN ATLANTIC CANADA In Western Canadian Shopping Centres Inc. v Dut- ton, the Supreme Court of Canada stated that such proceedings have three advantages. First, they "serve judicial economy by avoiding unnecessary duplication in fact-finding and legal analysis". The key and com- mon issues only need to be decided on one occasion. Second, "by allowing fixed litigation costs to be div- ided over a large number of plaintiffs, class actions improve access to justice by making economical the prosecution of claims that would otherwise be too costly to prosecute individually." Third, and related to this last advantage, "class actions serve efficiency and justice by ensuring that actual and potential wrong- doers do not ignore their obligations to the public." The availability of class actions modifies the behav- iour of companies who would not otherwise be wor- ried about the possibility of individual lawsuits claim- ing meagre amounts of money. At first blush, it may appear as though class actions favour the plaintiff more than the defendant. There are, however, some practical and cost benefits to both par- ties in a class action lawsuit. By avoiding a number of individual law suits that seek a determination on the same issue, the idea is that the defendant will ultimately save time and money. In addition, the defendant is afforded some measure of protection against having to defend against a class action that would not result in such efficiency. Before a class action can proceed the court must first "certify" the matter as being one that is an appropriate class ac- tion. At this first stage of enquiry the court will consider things such as the degree of commonality of legal issues among the class members and whether a proceeding by way of a class action would be preferable to individual lawsuits. If certified, a defendant will often feel a large degree of pressure to settle the claim. Regardless of the actual merits of the claim against the defendant, it may simply make more commercial sense to settle the claim as op- posed to gambling the likelihood of success against the potentially large number of class members and ultimate payout. The certainty of settlement is often viewed as preferable to an exercise of risk assessment that is far more tenuous than normal. This, among other things, should be kept in mind when negotiating and purchas- ing policies of commercial liability insurance. Many recent class actions have become mired in lengthy and expensive procedural hearings and ap- peals regarding the proper scope of the class. This is because some jurisdictions have embraced the concept of a "multi-jurisdictional" or "national" class action, which purports to encompass class members beyond 6 WINTER 2011 DOING BUSINESS IN ATLANTIC CANADA the territorial jurisdiction of the court, sometimes with their consent, but other times without. This practice raises questions of legality and constitutionality, none of which have been clearly resolved by the courts or legislatures. The resulting uncertainty remains. If a proposed class proceeding is brought against a business, the scope of the proposed class should be carefully considered to determine whether the potential advantages of a class action may be overcome with ex- pensive procedural matters. Class proceedings have long been possible in At- lantic Canada pursuant to the common law, but the procedural mechanics of a class action are now heav- ily dictated by statute in Newfoundland & Labrador (as of April 2002), New Brunswick (as of June 2007) and Nova Scotia (as of June 2008). Prince Edward Is- land does not yet have class proceedings, which effect- ively reduces the likelihood that a class action will be commenced in that province. Having said that, there is nothing to actually prevent a class action from proceed- ing in Prince Edward Island, although the governing procedures will be more uncertain. The differences between the statutory regimes in the remaining Atlantic provinces will also govern the like- lihood of whether and where a business might face a class action lawsuit in Atlantic Canada. For example, Newfoundland & Labrador is generally considered a more plaintiff-friendly jurisdiction because a defendant does not have a general right of costs recovery against an unsuccessful representative plaintiff. This may en- courage the commencement of more class action law- suits in Newfoundland & Labrador, regardless of their merits. As a further example, the language of the Nova Scotia statute would appear to make it easier to pur- sue a "multi-jurisdictional" or "national" class action. Accordingly, and despite the less friendly costs regime, Nova Scotia may appear as the more attractive jurisdic- tion in which to pursue a class action lawsuit that is quite broad in scope. Shelley Wood Halifax, NS 902.420.3353 swood@stewartmckelvey.com Scott Campbell Halifax, NS 902.420.3383 srcampbell@stewartmckelvey.com

• Cover