Where The Rubber Meets The Road: Evidentiary Burdens And Gain-based Remedies In Product Liability Class Actions

• Published date: 04 June 2021
• Law Firm: Osler, Hoskin & Harcourt LLP
• Author: Mr Kevin O'Brien and Stephen Armstrong

The Alberta Court of Appeal recently overturned a class certification order and made important comments on a representative plaintiff's evidentiary burden at the certification stage, as well as on the viability of claims for gain-based remedies (i.e., restitution and disgorgement) in the context of product liability class proceedings.

In particular, the decision, Spring v. Goodyear Canada Inc, 2021 ABCA 182, is significant for reaffirming the rigorous analysis required to establish a common issue in product liability cases that concern a range of products. In addition, the Court clarified that the web of contracts in the supply chain constitute legal justifications (or "juristic reasons") which effectively forecloses an action by a consumer against a manufacturer for unjust enrichment - absent a legal basis for disregarding these contracts. Further, the decision also sets a high bar for obtaining disgorgement in product liability cases, as the Court held the remedy will be unavailable where the ordinary measure of damages in tort is likely to provide an adequate remedy for the alleged harm.

Background facts and procedure

The representative plaintiff commenced a class proceeding in Alberta against the defendants on behalf of all persons who bought tires that, it was alleged, suffered from a manufacturing or design defect.¹ The representative plaintiff pleaded claims in negligence, failure to warn, and unjust enrichment, and sought compensatory damages for alleged injuries suffered by the class as well as restitution, disgorgement, aggravated damages, and punitive damages.²

In the Court of Queen's Bench, the case management judge certified the action with the common issue being the existence of a common defect across the range of different types of tires sold by the defendants.³

The...