Justice

If the suit fits, share it

Betty Palik August 11 1980
Justice

If the suit fits, share it

Betty Palik August 11 1980

If the suit fits, share it

Justice

Betty Palik

Just over four years ago a Montreal physician named Jeffrey Danson went into small claims court and successfully sued the Ford Motor Company of Canada for $297, the cost of replacing the fender that had begun to rust away from the rest of his 1972 Cougar. All in all, it was a very satisfactory conclusion, and one very much in keeping with the one-on-one way Canadians have traditionally dealt with such matters. In fact, the case probably wouldn’t have merited any attention at all, let alone the headlines it received, had it not been for another court action against Ford at the same time in Ontario, where some 370,000 people were suing Ford for the same reason.

Well, not really 370,000 people. But potentially. This was a “class action,” brought by five men who, like Danson, figured it was just plain wrong that their fairly new cars (model years 1971 through 1975) should rust away as quickly as they did. Ultimately the case was settled out of court, with some 80,000 people—all of whom qualified and chose to do so—sharing in the collective victory and receiving, significantly, about the same amount each as Danson: a $300 certificate toward a new car or a voucher for up to $300 in bodywork. But even more important, the “rusty Ford case” fyelped to establish that the class-action suit, a fixture in U.S. law since the mid-’60s, had a viable place in the Canadian judicial system. The watershed of the Ford case and

the handful of others that have gone to completion in the past few years hasn’t reached flood level yet (and it may not), but this fall a number of courts, including the Supreme Court of Canada, will be dealing with class-action suits in various stages. And on the legislative front, Ottawa and a number of provinces are studying ways to define more properly and extensively this still largely unfamiliar method of seeking redress. While all provinces have provisions for class action in their rules of court, only Quebec has gone beyond simple definitions, and until now there has been no irresistible impulse to do so. However: “Old rules are no longer adequate to bring about remedies for mass injuries,” says Patricia Richardson, who is counsel for the Ontario Law Reform Commission. “In a complex society such as ours, with concentrated eco-

nomic power and mass merchandising and advertising, it is inevitable that the actions of wrongdoers will affect many persons.”

If it all seems pretty straightforward, rest assured that it is not. Consider, for example, the matter of Helen Naken of Toronto, one of those unfortunate enough to have purchased the now-defunct Firenza automobile from General Motors in the early ’70s. Naken, on behalf of herself and 4,300 Firenza owners in Ontario, sued GM in 1973, seeking $1,000 per owner. Her case—or their case—is one of those coming before the Supreme Court of Canada this fall, but not, as one might expect, for final disposition. No, what the court must rule on is whether Naken’s case is a legitimate class action, which GM, to no one’s great surprise, disputes. So if she gets permission to sue, and if the actual suit goes through all the possible steps, it might be another seven years before there’s a winner and a loser.

Much of the problem goes back to the lack of precedent and definition. Mr. Justice John Arnup of the Supreme Court of Ontario, one of the judges to hear the Naken-GM disagreement, was moved to write: “If we are to have consumer class actions in Ontario, it would be highly desirable that there be enacted legislation or rules of practice, or both, pursuant to which such actions could be conducted.” But that doesn’t necessarily mean quick solutions either, because Quebec has such rules and legislation in operation and problems still abound.

Since January, 1979, when Quebec’s class-action legislation came into effect, 24 suits have been launched. Yet so far only three cases have cleared all the procedural hurdles and are ready to come to trial. And only one of these, involving a group of cable television subscribers in Quebec City taking on their cable company, represents a large number of people. What Quebec requires—and it’s quite likely that future legislation in the other provinces may have a similar requirement—is that class-action suits, before they can be pursued, be authorized by a justice of the Superior Court. Only eight of the 24 cases have received this permission and of those, five were appealed by the defending party, two of them successfully, leaving just three cases. Which has led Montreal consumer lawyer David Appel to complain that “the courts have been too restrictive in their interpretation of the new act,” and to argue that defendants in such cases shouldn’t have the right to appeal authorization. “The defendant has plenty of opportunity to state his case during the actual trial. When class actions have to go to the Supreme Court [of Canada] just to have their authorizations validated . . . the

whole purpose of the exercise could be defeated.”

It should be noted that Appel sits on one particular end of the bench, making his advocacy of pro-consumer class-action legislation more understandable. On the other side of it is the defendant, who is usually a corporate entity of some wealth and power. He has very little to gain from class-action legislation of any type, never mind that weighted toward the consumer. After all, in the good old days he could take ’em on one at a time, employing that wealth and power to its best advantage—which led most victims to decide that it just wasn’t worth the time and money to go to court against all those resources.

So now we have a guy like Robert Nault of Montreal going to the Supreme

Court of Canada, seeking the right to pursue a class-action suit against an outfit called the Canadian Consumer Company Limited because he sent in $39 for some cutlery and got nary a knife, fork or refund. For 39 buchst Precisely the point: before class actions he might have bitched and wailed and maybe taken the “other merchandise” the company offered, but go to court for $39? Not likely. However, going to court to get the money for himself and 1,000 other people, well, that’s different. And what is more, he has government fund-

ing: in Quebec a special assistance fund for class actions was set up at the time the law was passed, allowing Nault, who is a truck driver for the post office, to go ahead with the lawsuit.

Unfair advantage? Again, it’s arguable. But what it means, really, is that the middle class and the working class, until now financially prevented from exercising rights and privileges supposedly granted them by the law, have some access. Moreover, the class action can be an instrument for change. Jeffery Lyons, the Toronto lawyer who

handled the rusty Ford case, says that as well as settling for $2.5 million and taking responsibility for notifying members of the “class” that the money was available (by way of newspaper advertising), Ford also undertook to provide a five-year rust-free warranty on all its cars sold in Canada thereafter. “Class action,” Lyons says, “is an appropriate weapon for social reform.” He is also convinced that it has a pretty good future, especially in Ontario because, he thinks, it fits so well in the free-enterprise ethic. “It’s frontier style, just like in Texas—a shoot-out in the saloon.”

Despite his enthusiasm—despite the fairly general enthusiasm—the class

action’s arrival may not exactly herald a golden age in Canadian jurisprudence. Even with the legislation expected in the near future, and even with interpretations from the Supreme Court forthcoming, continuing confusion is almost inevitable. Very few cases are as cutand-dried, for instance, as the matter of Chastain vs. British Columbia Hydro and Power Authority in 1973. Here the “class” was easily defined. It consisted of people who had been forced to pay security deposits on their utilities because they were allegedly “bad risks”— and, since every plaintiff was in agreement, restitution was as simple as mailing out the cheques. But for those who tend to view any legal innovation with alarm, who can’t see the benefits for the abuses, it should be pointed out that the kooks and cranks—like the Philadelphia football fans who tried to sue the Eagles on the grounds that they misrepresented themselves by claiming to be a football team—are almost inevitably doomed to failure. If it doesn’t happen there, where litigation is as American as apple pie, it’s even less likely to happen here. &lt£>