Class actions and preferable procedure

Fischer v. IG Investment Management Ltd., 2012 ONCA 47 deals with when a class action will be allowed. A class action will not be allowed if there is a preferable process to vindicate class claims. The Court writes:

[43]         Turning to the merits of the Divisional Court's preferable procedure analysis, in my view, the error in principle that led to the motion judge's incorrect conclusion on preferability was more fundamental than his alleged failure to recognize that a substantial amount of the monetary damages claimed by investors went uncompensated in the completed OSC proceedings. The question whether the OSC settlements provided investors with all or substantially all of the monetary relief that they seek in the class action is not the proper focus of the preferable procedure inquiry.[4] In other words, the Divisional Court did not ask itself the right question.

[44]         The second element of the preferability inquiry described in Hollick requires a comparative analysis as to whether a class action would be preferable to other reasonably available means of resolving the class members' claims.[5] The preferability inquiry must necessarily take into account the central characteristics of the proposed alternative proceeding as a means of resolving the claims. This exercise includes, but is not limited to, considering the following characteristics of the alternative proceeding: the impartiality and independence of the forum; the scope and nature of the alternative forum's jurisdiction and remedial powers; the procedural safeguards that apply in the alternative proceeding, including the right to participate either in person or through counsel and the transparency of the decision-making process; and the accessibility of the alternative proceeding, including such factors as the costs associated with accessing the process and the convenience of doing so.

[45]         These characteristics must be considered in relation to the type of liability and damages issues raised by the class members' claims against the defendants in the putative class action and the manner in which they are addressed, if at all, in the alternative proceeding. The court must then compare these characteristics to those of a class proceeding through the lens of the goals of the CPA: judicial economy, access to justice and behaviour modification.