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Wal-Mart coming to Canada. Sorry, no.

Class Acts
|Written By Kirk Baert
Wal-Mart coming to Canada. Sorry, no.

In Wal-Mart Stores Inc. v. Dukes, the Supreme Court of the United States held that in order for class certification to be granted, judges must undertake a “rigorous analysis.” Of course, judicial analysis should be rigorous so we know the court must have meant something else. It turns out it did.

Lawyers, legal analysts, and judges both north and south of the 49th parallel now know the purpose of the Wal-Mart decision was to make class actions tougher to certify.

By contrast, over the last six months, the Supreme Court of Canada has released five decisions on the question of class certification. In each and every one of those cases, Canada’s top court made it clear it was sticking with the “some basis in fact” test it created in Hollick v. Toronto (City) in 2001.

Hollick holds a plaintiff should be granted class certification when there is “some basis in fact” for the court to hold the requirements of the certification test have been met.

Hollick and the recent quintet of Supreme Court of Canada cases recognize the certification motion occurs at the beginning of the case. Discoveries have not occurred. Documentary production has not yet been made. Experts have not yet been retained nor have they delivered reports.

Thus the question is not who is going to win but whether a class action is a fair and manageable way of deciding who is going to win. The Wal-Mart approach turns that inquiry on its head by effectively requiring the plaintiff to show a class action is the superior method for the adjudication of the controversy.

In fact, the U.S. Supreme Court stated that since class actions are “an exception” to the rule all parties must be present before a court in person in order to have their rights adjudicated, the granting of class certification should also be “exceptional.”

This was and is a disguised way of saying class actions should be discouraged and they should only be allowed to proceed if there is no other alternative. Choking off class actions is the goal.

The Supreme Court of Canada rightly saw adopting that approach would effectively deny the chance of redress to millions of Canadians who have valid claims that cannot be pursued individually, either because they are too expensive or because they are too complex.

The class action is here to stay.