While legislation has tried to make the government like any other defendant, it is fundamentally unique in society. The uniqueness of the Crown stems from the fact that not only can its direct actions be harmful, but it has taken on the duty to protect citizens from the harmful acts of others as well. The government bears principal responsibility for ensuring the safe regulation of everything from cleaning products to medical devices. This responsibility is unique due to the scope of coverage. The dereliction of this duty can result in grave consequences for those affected, and often the impacts will be multiplied across thousands of individuals. It is conduct that is particularly suited to class actions.
The unique role of the Crown as a regulator raises the novel question of when can can be held liable for the defective products of others? If the Crown installs piping in a negligent manner, it can be held responsible. But what if the government merely regulates the sale, importation, or quality of piping? Does it owe a duty of care to those impacted if the piping is defective and fails?
A five-judge panel of the Court of Appeal for Ontario recently released reasons in Taylor v. Canada (Attorney General). Taylor was heard as a special case under Rule 22.03, to answer primarily the following question:
· What are the requirements in a statement of claim to establish sufficient proximity between the plaintiff and the defendant in a claim brought against a governmental body for regulatory negligence?
The Court of Appeal was also asked to consider whether the pleadings in Taylor were sufficient to establish proximity for a prima facie duty of care.
Taylor is a class action for defective implants used in temporomandibular joints. TMJ implants were used in the joints of the jaw and Health Canada was responsible for regulating their sale. The plaintiff Kathryn Anne Taylor alleged that Health Canada was negligent in allowing the sale of TMJ implants that were not safe and did not comply with regulations. She also accused the government of negligence in implementing an ineffective recall.
Taylor received a TMJ implant, which subsequently deteriorated, causing permanent and debilitating injuries.
Canada did not manufacture, design, or implant the TMJ implants. Taylor did not allege direct contact between herself and Health Canada, or that she was aware of any of Health Canada’s representations concerning TMJ implants. She alleged Health Canada was responsible for regulating those who caused harm to her, as it regulated the sale of implants. On these facts, could Health Canada arguably be liable to Taylor for regulatory negligence? The Court of Appeal said yes, Canada could be liable, and a final determination should be left to trial.
The key issue in Taylor was proximity. When dealing with the Crown, statute is the first place proximity can be located. Taylor did not consider proximity by statue, but proximity by relationship. The court clearly accepted that proximity can be established by relationship, and the question was left to what type of relationship must exist between the Crown and the plaintiff.
The central question as posed by the court in Taylor was, “What is there in the factual allegations that distinguishes the relationship between this plaintiff and the regulator from the relationship that exists between the regulator and all those affected by the regulator’s actions?”
While the court held that each case must turn on the specific facts of the relationship, several specific statements provide future guidance:
· if the pleadings disclose that a “. . . regulator was fixed with knowledge of a clear, present, and significant danger posed to a discrete and identifiable segment of the community” and failed to act, proximity is more likely to be found;
· “an individual’s reliance on public representations that the regulator will do its public and statutory duty cannot by itself create . . .” a relationship of proximity, but are still part of the overall consideration and “factual matrix”; and
· a private law duty of care can co-exist with duties and obligations owed to the wider public.
We no longer live in a time where “the king can do no wrong.” To what extent though can the Crown be increasingly liable for its failure to protect from the harmful acts of others? The growth of regulatory negligence claims, and relationship by proximity, is a logical extension of the original removal of Crown immunity. As the Crown has taken on increasing regulatory responsibilities, it should not be immune if those responsibilities are negligently carried out.