Class Actions
Commercial LitigationOur Blog
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The Ontario Court of Appeal’s decision in Price v Smith & Wesson Corporation is a significant development in product liability law and class action procedure, particularly in cases involving harm from criminal acts. The ruling allows a class action in negligence to proceed against Smith & Wesson, the manufacturer of the handgun used in the 2018 Danforth Avenue mass shooting in Toronto.
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In North v Bayerische Motoren Werke AG, the Ontario Court of Appeal delivered a significant ruling on the boundaries of product liability in negligence. The decision confirms that negligence claims for pure economic loss in product liability cases can only succeed in narrow circumstances. For class action and product liability lawyers, the case serves as a reminder of the limits that govern certification in negligence-based claims.
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Since it was recognized a little over a decade ago in Bhasin v Hrynew, the contours of the organizing principle of good faith and the duty of honest performance in contract law have been gradually clarified by Canadian courts. Most recently, in Ocean Pacific Hotels Ltd v Lee, the British Columbia Court of Appeal considered whether the duty of good faith applied to pre-contractual conduct. In particular, the question in this case was whether an employer’s conduct before an employment agreement was finalized could be scrutinized under the duty of honest performance. Answering that question with a resounding no, the Court of Appeal’s decision provides critical insight into the evolving boundaries of good faith obligations in Canadian contract law.
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Canada’s federal structure means national class actions naturally raise potential constitutional questions. Those questions become potentially more thorny where a class action is pursued not on behalf of individuals across multiple provinces and territories, but instead provincial and territorial governments themselves. The Supreme Court’s recent decision in Sanis Health Inc v British Columbia addressed many of those concerns and ultimately defined a broad scope for national class proceedings, including where a proposed class includes other provincial or territorial governments.
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The multifaceted nature of generative AI is bound to create legal complexities at the intersection of intellectual property law and class actions, as this emerging technology disrupts not only the tech landscape but the legal one too.
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By playing their essential gatekeeping role, class action judges have in numerous decisions clarified the necessary elements of various causes of action and the availability of specific remedies in a particular case. What constitutes harm that is compensable, for example, has featured in numerous product liability class actions and the failure to show harm has put an end to many of them. For strategic and practical reasons, some class actions do not seek compensation for losses that the class members suffered. Instead, the strategy is to pursue remedies that do not correspond with personal losses such as disgorgement, nominal damages and punitive damages. Hoy v Expedia Group Inc is a recent example.
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In 2020, following a series of recommendations released by the Law Commission of Ontario, the Ontario legislature passed substantial amendments to the Class Proceedings Act. Many of those amendments were drawn straight from the Law Commission’s report and were generally supported by most stakeholders.
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Lynne McArdle published the first issue of On the Docket: Cases to Watch, which features a collection of cases that move the law forward in some meaningful way. The cases in this edition are diverse in that they arise in different areas of the law: fraudulent conveyances, securities law, class actions, employment law, discovery, and Crown law.
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Pleadings continue to be a popular battleground in the product liability context. Over the years, a body of law has developed respecting motions to strike for negligent design, negligent manufacture and failure to warn claims. Nevertheless, there continues to be debate as to the specificity needed for pleading these types of claims. That debate is fuelled in part by jurisprudence demonstrating a high tolerance for claims that are arguably vague and lacking in material facts. Even where a claim is struck, plaintiffs are routinely permitted to amend their pleading.
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Commercial disputes between professionals and their clients are routine. However, what is comparatively rare are disputes between the consultants (or other professionals) who advise a client and the client’s customers who may be harmed in some way by that client’s conduct. In those circumstances, there is generally no contractual relationship between the consultant and the client’s customer, and most cases have held that there is no duty of care between a professional and a person injured by the professionals’ client’s conduct. Lawyers, for example, have been held to potentially owe duties of care to non-clients in only the most exceptional circumstances. However, the recent decision of the British Columbia Supreme Court in British Columbia v McKinsey has the potential to substantially expand the scope of claims brought against professionals by persons allegedly harmed by those professionals’ clients’ conduct.
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