Class Proceedings Can Constitute An Abuse Of Process But Interim Relief Is Unlikely

• Law Firm: Alexander Holburn Beaudin + Lang LLP
• Subject Matter: Litigation, Mediation & Arbitration, Class Actions
• Author: Ms Hollis Bromley, David McKnight and Jon Peters
• Published date: 10 March 2023

One of the key considerations in class action litigation is whether to bring an interim application to dismiss the proposed class action. One such basis for dismissal is where the class proceeding serves no legitimate purpose and constitutes an abuse of process. Stays in these cases are motivated by the judicial policy of promoting access to justice through judicial economy.

The advantage of a single, national class proceeding has received judicial and academic attention for maximizing efficiency and promoting the interests of justice. Specifically, avoiding duplication and inconsistent findings, along with efficient use of judicial resources are key considerations.

In a detailed survey of the issue, the Ontario Superior Court in Kowalyshyn v Valeant Pharmaceuticals International Inc., held that "judicial economy and the avoidance of a multiplicity of proceedings is a foundational principle of civil procedure generally".¹

However, the court found that serving the goal of judicial economy by limiting duplicate class proceedings was fraught with numerous discrete problems:

1. The right of a putative class member to opt-out of class proceedings;
2. The influence and importance of class size and class member loyalty;
3. A putative class whose members opt-out may fail to be certified or may be de-certified or settlement may fail.
4. A law firm prospecting for quick profit from class action work;
5. Firms may start proceedings in multiple jurisdictions with the design that its stake will be purchased by other law firms.
6. Culpable defendants may see their liability discharged en-masse, and perhaps at bargain prices that may be a just license fee for ill-gotten gains;
7. No mechanism in Canada, unlike in the United States, to consolidate proceedings that are initiated in several different jurisdictions; and
8. The rarity of purely local class actions and the prevalence of parallel regional, national or global class actions that are difficult to cull.²

The court went on to cite decisions across Canada holding that duplicative class proceedings may be an abuse of process, though not always.

The problem of duplicative class proceedings has also been considered by British Columbia courts. For example, in Asquith v George Weston Limited, building on the prior decision of McKay v Air Canada, 2016 BCSC 1761, the court confirmed that multijurisdictional class actions are abusive when they are duplicative and serve no legitimate purpose. That said, a class action is not abusive simply...