The Supreme Court Holds That Preferability May Hinge On Substantive Access To Justice

In AIC Limited v. Fisher, 2013 SCC 69, the Supreme Court of Canada ruled on what makes a class action a preferable procedure under s.5(1)(d) of the Class Proceedings Act, 1992. The Supreme Court's decision on this point came after varied decisions and reasoning by each of the courts below and provides necessary guidance on this certification criterion. Assuming that the rest of the statutory criteria are met, whether a class action is preferable necessitates comparing class proceedings with other possible procedural options through the triad of the goals of class proceedings: access to justice, behaviour modification and judicial economy. The facts and context of this case ultimately resulted in the Supreme Court's analysis focusing on access to justice.

This case arose as a group of mutual fund managers were investigated by the Ontario Securities Commission ("OSC") for "market timing". The two mutual fund managers who were the appellants at the Supreme Court had entered into a settlement agreement with the OSC under which they paid their investors $108.1 million. These same investors were part of a class action against them for the same conduct. The OSC agreement anticipated and did not preclude such civil proceedings. The class action claimed for damages suffered in addition to the settlement amounts already received.

Justice Perell denied certification at first instance (2010 ONSC 296 (CanLII)). He found that a class proceeding was not the preferable procedure because the OSC proceedings and settlement agreement had already achieved the goals of class proceedings. The Divisional Court focused on the substantive access to justice aspect of preferable procedure and found that there was some basis in fact to believe that the investors were entitled to more than they had received as a result of the OSC proceedings. It allowed the appeal and certified the class action (2011 ONSC 292 (CanLII)). The Court of Appeal disagreed with the Divisional Court's reasoning but agreed with the end result. The Court of Appeal focused on the procedural access to justice aspects of preferable procedure and emphasised whether investors had been able to participate and the fact that the OSC's powers were remedial (2012 ONCA 47 (CanLII)).

The only issue before the Supreme Court was whether the class proceeding was preferable to the OSC proceeding in providing access to justice for the investors, i.e. whether certification should be denied because access to...