The Court Applies More Muscle To Its Role As Gatekeeper In Certification Of Class Proceedings

• Published date: 20 January 2021
• Subject Matter: Litigation, Mediation & Arbitration, Court Procedure, Class Actions
• Law Firm: Gowling WLG
• Author: Ricki T. Johnston

In its recent decision denying certification under the Alberta Class Proceedings Act ("CPA"), the Alberta Court of Queen's Bench (the "Court") reinvigorated its role as a gatekeeper providing more serious scrutiny of the evidence of loss at this early stage in a potential class proceeding.

Other courts have also taken steps in recent years to assert more of a gatekeeper function, however those decisions have largely been overturned on appeal based on the Supreme Court of Canada ("SCC") jurisprudence. The key issue flowing from this decision may ultimately be whether appellate courts are prepared, absent legislative change, to interpret the test for certification as sufficiently flexible to respond to cases where it is clear that the evidence will not be able to substantiate the allegations in a pleading.

Setoguchi v. Uber B.V., 2021 ABQB 18 involved a claim against several Uber entities based on an unauthorized access to digital personal information it held about its drivers and customers. The data at issue was personal, but not necessarily private, information including name, email address, telephone number, encrypted passwords, user IDs, and user ratings. Importantly, there was no evidence of any harm to class members as a result of the breach, simply a bare pleading of harm. In fact, there was evidence in the record that no compensable loss had been suffered by class members. The evidence concerning no compensable loss clearly troubled the Court.

The Court framed the key issue in the case in terms of commonality of loss:

The real issue in this case is whether, assuming otherwise provable causes of action liability (contract, negligence, breach of statute, etc.), and compliance with the requirements for certification under s. 5(1) and (2) of the Class Proceedings Act, SA 2003, c. C-16.5 (Act), there must be, and is, "some evidence" of or "some basis in fact" for any real resulting common harm, loss or damage from the alleged common law or statutory breaches.

However, despite framing the issue in terms of commonality of loss, the Court focused on the lack of evidence of loss as the following passage demonstrates:

...it seems to me that, if the "screening process" [on the certification motion] is to be "meaningful", without determining the full legal and substantive merits of the litigation, including whether all elements of the Act to establish certification have been met, there must be some evidence or basis in fact for loss or damage. ... the...