Environmental class actions a tough sell: report

If anything is likely to prompt a class action, it’s an environmental disaster impacting an entire community — or, at least, that was the thinking a decade ago.

But the promise of the environmental class action (or threat, depending on which side you happen to be on) may never come to fruition in Canada, according to a presentation yesterday by an environmental lawyer at Osler Hoskin & Harcourt LLP.

At the Ontario Bar Association’s Institute 2015 conference — now in full swing, with 1,700 participants converging in downtown Toronto — Osler’s Jennifer Fairfax delivered a paper that describes a litany of failed attempts to certify an environmental class, and ultimately suggests class actions may not be the preferable mechanism for dealing with environmental claims.

Fairfax begins with the faulty premise — a ruling by the Supreme Court of Canada in Western Canadian Shopping Centres v. Dutton, where Chief Justice Beverley McLachlin equated class actions with access to justice (a centrepiece of her judiciary legacy) and suggested that environmental claims would likely make for a common class.

“Now, nearly 15 years later, the outlook is somewhat different,” writes Fairfax, “with, so far, only one example of an environmental class action decided on its merits in the common law provinces, and no successful environmental class actions (putting aside settlements) to speak of in common law Canada.”

Despite the intuition that environmental harm may strike a common class, Fairfax goes on to explain how, in practice, environmental classes can be fiendishly difficult to certify.

Unlike a securities class action, say — where a public misrepresentation can be neatly specified, dated and quantified — instances of environmental contamination can raise more complex issues relating to individual health effects, individual property damage and even historically inadequate regulatory regimes.

Fairfax points to the most recent certification refusal, the 2013 ruling in Canada v. MacQueen at the Nova Scotia Court of Appeal. The case dealt with a nuisance claim that involved emissions from steel production that, plaintiffs alleged, interfered with their property rights “and the integrity of their persons.”

The court, however, found that a claim of nuisance could not provide the foundation for a common class of plaintiffs.

As Fairfax writes: “... the Court held that it was not possible for a Court to determine for the entire class whether any contaminants went onto the class members’ properties, whether the contaminants came into contact with class members, and whether the contaminants inflicted material damage or constitutes substantial interference with the class members use and enjoyment of their properties.”

Even when negligence — a more serious claim — can be proven, certification of a common class has proven exceedingly difficult.

In MacQueen, for instance, the court ruled that any negligence stemming from steel plant emissions would have occurred over decades, during which time environmental standards have drastically changed. Claimants from 1968, in other words, could not expect to join a class with claimants from 2004, given that the standards of care for each would have been entirely different.

As the court notes: “The duty and standard of care are moving targets depending upon when the class member owned the property and when the alleged exposure took place. … The duty and standard of care could change from 1968 to 2004 in the context of operating the steel works.”

As a result, the court found that negligence claims would also involve individual findings of fact for each of the class members.

A summary of Fairfax’s paper is available on Osler’s Canadian Class Action Defence blog. Her paper is available on request.

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