Class Counsel Can Continue To Represent Class Members Where A Conflict Of Interest Arises With Provincial Health Insurers

In Perdikaris v. Purdue Pharma, 2019 SKQB 281, the Chief Justice of the Saskatchewan Court of Queen's Bench has ruled that a conflict of interest between Provincial Health Insurers ("PHIs") and the Representative Plaintiffs and/or Class Members that emerges as the matter proceeds will not automatically disqualify Class Counsel from continuing to represent the Class. This decision may have wide-ranging potential implications for all personal injury class action.

In most Canadian jurisdictions where a plaintiff advances a claim for personal injury, the plaintiff is obliged to advance a subrogated claim for any healthcare costs incurred by the province's health insurer (such as OHIP in Ontario). If the matter proceeds to settlement, plaintiff's counsel is required to negotiate in good faith on behalf of both the plaintiff and the PHI. Each province's legislation requires that plaintiff's counsel obtain the relevant PHIs' consent to any settlement for less than full recovery, but most legislation is completely silent on how to proceed if a conflict arises between the PHI and the plaintiff regarding the settlement.

Perdikaris marks the first time that a Canadian court has addressed a conflict of interest between PHIs and plaintiffs in a class action. The case is one of several longstanding class actions against the makers of OxyContin on behalf of people who became addicted to the drugs as prescribed by their physicians. In April 2016, after years of litigation, the parties reached a Settlement Agreement to resolve all the actions. The Agreement was subsequently amended, and then approved by the courts in Ontario, Quebec and Nova Scotia. However, approval in Saskatchewan was initially sought in 2017 before Ball J., who did not grant the application but identified areas for additional evidence and submissions. Justice Ball then retired.

A further hearing was held in January of 2018 before Barrington-Foote J., who did not grant the application, but held upon the prospect of approval on the provision of additional evidence and submissions in a decision released in March of 2018.

Following the March 2018 decision, the PHIs took the position that the Settlement could not be approved. Class Counsel maintained that the...