Why the Development of Mass Torts in Canada Is Important to Corporate America: Not Only Are American Manufacturers Liable to Suit in Canada, but That Nation's Class Action Regime Is Developing the Potential for Increased Exposure

McKee, S. Gordon, Defense Counsel Journal

THE Canadian litigation landscape as it relates to mass torts has changed fundamentally over the past 10 years in at least three ways that should be of considerable interest to corporate America.

* First, liability exposure has increased exponentially for corporations that distribute their products in Canada. In the 1980s and early 1990s, a product recall or an adverse court decision on causation might have generated a handful of personal injury claims that could probably be settled for relatively small dollar amounts--even in Canadian dollars. If a case had to be tried, trial was often by judge alone, assuming scientific issues of any complexity, and the Canadian media had little interest in the litigation.

Today, however, in the event of a product recall, Canadians are seeing entrepreneurial plaintiff firms in a number of provinces commencing high-profile multi-million or billion dollar class actions (often piggy-backing on U.S. class actions), making allegations of reckless or fraudulent conduct in support of large punitive damage claims, advertising for plaintiffs, serving jury notices and generally adopting many of the tactics that Canadians hear corporate America has had to deal with in the United States for some time. There also have been cases in which Canadian plaintiffs have retained U.S. plaintiffs' counsel to try to pursue claims in the United States, presumably in an effort to access the larger damage awards available.

The Canadian media are much more interested in writing about medical product class actions, with some encouragement from the plaintiffs and their lawyers, particularly if it provides an opportunity to criticize the Canadian regulator, Health Canada, for its handling of the approval or recall process.

* Second, there is a real risk that the work product of Canadian plaintiffs' attorneys will be exported to the United States and used in litigation there against a corporate defendant. Work product would include not only Canadian class certification decisions, which have been referred to in class certification hearings in the United States, but also expert preparation, reports it and declarations, discovery (both documentary and depositions), and settlement strategies. Canadian plaintiffs' counsel are working together with U.S. plaintiffs' counsel increasingly--exchanging the fruits of discovery, with the approval of courts in both countries, if necessary; dividing responsibility for expert preparation; and adopting the same themes and strategies in the litigation. For instance, in a recent case, Canadian plaintiffs' counsel was instrumental in preparing expert declarations that were later used in a class certification hearing in the United States.

* Third, developments in Canadian mass torts have made the Canadian regulator more aggressive with manufacturers on changes to product warnings, dear health care professional letters and press releases. Corporations in America may soon be required to explain to a U.S. jury why the company or an affiliate was using a stronger warning in Canada than it was in the United States, whereas the opposite was often the case in the past.

MASS TORTS IN CANADA

In the development of mass torts in Canada, there are areas where there may be significant differences between United States and Canadian law or procedure, and there are many areas in which changes or potential changes in the law have yet to be fully developed.

A. How Mass Torts Are Litigated

Canada is a confederation with 10 provinces and three territories. Jurisdiction over torts and other civil wrongs rests primarily with the provincial legislatures and courts. The federal government and federal courts have limited subject matter jurisdiction in areas such as aviation, admiralty and intellectual property, but they do not have jurisdiction over mass torts as a general rule. In theory, a company can be faced with claims (individual or class) in all of the 13 provinces and territories, and no formal method, such as the multi-district litigation (MDL) procedure in the U.S. federal court system, is available for co-ordinating discovery or trials among the provinces. There simply have not been enough individual claims across the country in mass torts to date for Canadian politicians to contemplate creating an MDL-like process to compel joint discoveries if counsel do not co-operate.

Even within a province, there generally is no procedure for compelling common discovery, although in limited cases it may be possible to have trials heard together. It is, however, often the case that a corporate defendant will agree to have the transcript of an examination for discovery, which is akin to a Rule 36(b) deposition of a corporate representative under the Federal Rules of Civil Procedure, form part of the discovery in any subsequent case so long as the plaintiff's counsel agrees not to cover the same ground on discovery, and limits questions to ones that have not already been asked in the earlier transcript. Class actions have been available in

Quebec (a civil law jurisdiction, based on the Quebec Civil Code) since 1979 but were not widely used until recently. Only about 360 cases were brought in the first 14 or 15 years. In the mid 1990s, Ontario and British Columbia enacted class action legislation for the first time. Over the past couple of years, three more provinces have enacted class proceeding legislation, and a number of others are considering it. The Supreme Court of Canada also has ruled that class actions can be brought in any province, even if there are no formal class proceedings rules, with the local judge deciding procedures to be followed on an ad hoc basis. (1)

The current trend in mass tort litigation is toward class …

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Publication information: Article title: Why the Development of Mass Torts in Canada Is Important to Corporate America: Not Only Are American Manufacturers Liable to Suit in Canada, but That Nation's Class Action Regime Is Developing the Potential for Increased Exposure. Contributors: McKee, S. Gordon - Author. Journal title: Defense Counsel Journal. Volume: 71. Issue: 1 Publication date: January 2004. Page number: 32+. © 1999 International Association of Defense Counsels. COPYRIGHT 2004 Gale Group.

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