Supreme Court of Canada Changes Certification Test, Uses Cost-Benefit Analysis
In a decision that will affect class proceedings throughout Canada, the Supreme Court of Canada yesterday set out a new approach for the certification of class actions. In AIC Limited v. Fischer, the Supreme Court changed the analysis used to determine whether a class proceeding will be the preferable procedure to provide access to justice to class members – for the first time engaging in an explicit cost-benefit analysis of class proceedings versus other avenues for recovery.
As discussed in this Osler Update, the Supreme Court’s new approach opens the door to competing expert evidence relating to potential recoveries and the costs of class proceedings, and the potential costs of pursuing a class action as opposed to other forms of recovery. One could expect that costs to defendants and to the judicial system could be part of the future analysis in some cases, particularly where other less costly roads to recovery, including regulatory avenues, are available.