Stricter Preferable Procedure Test

In Banman v. Ontario, 2023 ONSC 6187, the Ontario Superior Court of Justice (“Court”) offered the first comprehensive interpretation and application of the revised preferable procedure analysis under the amended Class Proceedings Act, 1992 (CPA).

As is already known, the proposed representative plaintiff must demonstrate that the proposed class action would:?

(a) be a fair, efficient, and manageable method of advancing the claim;

?(b) be preferable to any other reasonably available means of resolving the class members' claims; and?

(c) facilitate the three principal goals of class proceedings, namely: judicial economy, behavior modification, and access to justice, in order to meet the requirements for a preferable procedure. (at para. 314)

There are two main tests involved in determining which procedure is preferred.?

1. Whether a class action would be a fair, efficient, and manageable procedure is the first test.?
2. ?If a class action is preferred to any alternative method of resolving the class members' claims, it passes the second test.?

The purposes of the class action legislation—access to justice, behavior modification, and judicial economy—are used as a lens to evaluate both tests. (at para. 315)

In 2020, a new test was introduced that enforced more stringent requirements for the preferable procedure criteria as stipulated by the certification requirements and expanded the analysis of the preferred procedure by two variables. It states that a class proceeding is the preferable procedure for the resolution of common issues only if, at a minimum,

(a)? it is superior to all reasonably available means of determining the entitlement of the class members to relief or addressing the impugned conduct of the defendant, including, as applicable, a quasi-judicial or administrative proceeding, the case management of individual claims in a civil proceeding, or any remedial scheme or program outside of a proceeding; and

(b)? the questions of fact or law common to the class members predominate over any questions affecting only individual class members. (Class Proceedings Act, 1992, s. 5(1.1)).

The Court stated, although it is arguable that its prerequisites of (a) predominance of common issues over individual issues, and (b) superiority of all reasonably available alternative resolution procedures were already factors in the preferability analysis that developed in the original statute, that the legislative debates and the addition of “the only if, at a minimum” statutory wording “reveals that the purpose of the amendment was to raise the threshold, heighten the barrier, or make more rigorous the challenge of satisfying the preferable procedure criterion.” (at para. 317)

The court noted that with the addition of s. 5(1.1) to the Class Proceedings Act, 1992, the preferability standard is now more stringent than it was when the Act first went into effect in 1994. The only ponderable is how much stricter the new test is associated with the preferable procedure criterion. (at para. 318)

The court held that the amendment requires that the preferable procedure analysis be more rigorous and involve determining: (at para. 320)

1. Manageable:?

?whether the design of the class action is manageable as a class action;

2. Reasonable alternatives

whether there are reasonable alternatives;

3. Predominance

whether the common issues predominate over the individual issues;

4. Superiority

whether the proposed class action is superior (better) to the alternatives.?

By evaluating the benefits and drawbacks of the proposed class action alternatives via the prism of judicial economy, behavior management, and access to justice, this analysis is accomplished. (at para. 320)

The court added that to make sure that the common issues when taken as a whole, advance the goal of judicial economy and sufficiently advance the claims of the class members to achieve access to justice, it is necessary to ascertain whether the common issues predominate over the individual issues. If claimants ultimately encounter the same economic and practical hurdles that they did at the beginning of the proposed class action, then a class action will not be preferable. (at para. 321)

That is, a test of anticipated productivity and a form of inferiority test require that the common issues, taken as a whole, predominate. If the common issues do not predominate, then a class action is not productive and is inferior (not superior) to the alternative of proceeding immediately to individual issue trials. (at para. 322).

Conclusion

Banman lays out the analysis in a proposed class action to see if the preferable procedure criterion is met. The class proceeding should not be certified if there is a faster, more effective, or more equitable alternative that also promotes access to justice. It affirms that the preferability test has become more stringent, posing a bigger obstacle for plaintiffs to overcome. This decision strengthens the case for approaching the test from the perspective of the three objectives of class proceedings: judicial economy, behavior modification, and access to justice.?