Lexpert US Guides

www.lexpert.ca | LEXPERT • December 2016 | 19 CLASS ACTIONS But significant cost awards can also impact the clients of cor- porate defense firms. In Green v. CIBC, the Ontario Superior Court awarded plaintiffs $2.7 million in costs, creating a new high-water mark for adverse costs to get a case to certification. In his decision, Justice George Strathy, who has since become the Chief Justice of Ontario, suggested that what's good for the goose is good for the gander, saying failure to award fair costs to the plaintiffs will "reward a defence strategy of wearing down the plaintiffs by wearing down their lawyers." IF THERE WERE a Canadian "class action of the year" award decided by the plaintiffs' Bar, a kind of class-action Oscar, it would have been snatched up in 2016 not by shareholders who beat a large listed corporation in a headline-making story, but by a group of 108 post-graduate students, two-thirds of them from outside Canada, who took on a Toronto-based college they said sold them a bill of goods in a consumer-protection case. In some ways, Ramdath v. George Brown College is the little mouse that roared because it opened the door to the use of aggre- gate damages in class actions. "George Brown was a small case, but the principles are massive," says Won Kim of litigation boutique Kim Orr Barristers PC in Toronto, who argued the case. The students who brought the claim had all taken the college's post-graduate International Business Management course. The course materials said they could earn three industry designations. But after spending tens of thousands of dollars each, it turned out that, if they wanted the designations, they had to complete ad- ditional courses or work experience, and take additional exams at their own expense. When the students filed their action in 2008, they argued they lost income by delaying entry into the workforce on top of money spent on travel, accommodation, books and living expenses. Their suit was certified in a common-issues trial for breach of contract, misrepresentation and unfair practices under the Consumer Pro- tection Act, which was upheld by Ontario's appeal court. A damages trial followed, and it was there that Kim made a canny decision, choosing to drop damage claims for breach of contract, which would require him to show mitigation, as well as damages claims for misrepresentation, which would have re- quired proof of individual reliance. Instead, he sought aggregate damages for the students only under the Consumer Protection Act, which deems reliance. He coupled it with the provision un- der Ontario's Class Proceedings Act that states damages can be determined on an aggregate basis "without proof by individual class members." The court sided with him, as did the appeal court, saying dam- ages in a class proceeding can be assessed on an aggregate class- wide basis, not merely an individual basis — a first in Canada. The appellate court said aggregate damages are "appropriate," where reasonable, in order to make the class action "an effective instrument to provide access to justice." The justices upheld the trial judge's decision that aggregate costs be awarded for direct out-of-pocket expenses, although not for forgone income or de- layed entry into the workforce. The college's insurer sought leave to appeal to the Supreme Court of Canada, but the two sides reached a settlement and the application was withdrawn. Justice Belobaba, the trial judge who approved the settlement agreement, noted the college was paying the students much higher direct costs for things such as living ex- penses than the courts had ordered, and also reimbursing them for up to 40 per cent of the income "lost taking the program" using statistical data submitted by the plaintiffs to estimate the aggregate amount. He noted they are being reimbursed for the "'forgone income' on their word alone." The plaintiffs' Bar was beyond thrilled. The fact that the ap- pellate court looked at the use of aggregate damages after the trial, not at the certification stage, is huge, says Kirk Baert, a plaintiffs' litigator at Koskie Minsky LLP in Toronto. "The court made it clear it's not some sort of voodoo provision only for when you ful- fill 97,000 other criteria: it's in there to be used." Normally, he says, damages are supposed to be precise, but "here the court says basically as long as it's a reasonable approximation of what's owed, and the defendant isn't paying too much, it's none of the defen- dants' businesses how the money is allotted among plaintiffs." He and other plaintiffs' counsel say they expect claims for ag- gregate damages to spread from consumer class actions to securi- ties cases, anti-trust and price-fixing cases, privacy cases, and mass breach-of-contract cases, such as overcharging on credit cards or when airlines overcharge for surcharges or taxes. "Anything where it's quantifiable and you can easily measure what the de- fendant [improperly] received, then you can use this to calculate their aggregate liability." Not so fast, says Gordon McKee, a defense litigator at Blake, Cassels & Graydon LLP in Toronto. While plaintiffs' counsel may seek aggregate damage awards in other types of class actions, he says, "I expect it will have limited use beyond consumer-pro- tection claims." In many other areas, including some of the ones Baert mentioned, "since individual damage causation is part of li- ability, and damages evidence will be in the control of individual class members, individual damages proof will be unavoidable." Robert Staley, a defense litigator and head of class actions at Bennett Jones LLP in Toronto, predicts Ramdath-style aggregate damages will "rarely" be awarded. He points out the case had singular facts: it involved a single misrepresentation, deemed reli- ance under consumer-protection legislation and had a relatively homogeneous plaintiff group. While aggregate damages remain a potential remedy, he says, "Ramdath is an anomaly and not the start of a trend." Baert thinks American lawyers with clients who do business in Canada "won't like this decision" very much because it takes a big tool out of their arsenal. "The great defense on class actions on both sides of the border is it's too hard to calculate damages and, at the end of the day, if you can't figure out the monetary aspect, [a trial's] a pointless exercise." Litigating class actions in Canada assures access to many things: due process, a transparent legal system and respect for the rule of law. But as you can see from the conflicting reads on this one case, in this one province, class actions in Canada are not al- ways neat. Multiply that across 10 provincial and three territorial class-action regimes, add in overlapping filings, and you see how things can get messy. Don't expect that to change any time soon.

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