The stakes have been raised for parties to class actions in Saskatchewan. On May 14, 2015, Saskatchewan’s Class Actions Act (“CAA”) was amended, restoring judicial discretion to award costs in class action proceedings. The losing party to a class action now faces the possibility of being ordered to pay for some or all of the winning party’s legal expenses and disbursements.
Previously, Saskatchewan was a no-costs jurisdiction. No-costs jurisdictions, including those presently found in British Columbia, Manitoba, Newfoundland, and the Federal Courts, are generally considered to be plaintiff friendly. In these jurisdictions, each party bears her or his own costs regardless of the outcome of the class action. This legislative choice is viewed as a means to encourage individuals to act as a representative plaintiff by bringing a suit on behalf of the entire class without risking a costs award commensurate with the overall claim advanced. The recent legislative amendments in Saskatchewan signal a shift away from this view: defendants may now recover their costs and the representative plaintiff may be on the hook.
The amendments to the Saskatchewan CAA were enacted by Bill No. 147, otherwise known as The Class Actions Amendment Act. As of May 14, 2015, courts in Saskatchewan may now order costs against a losing party under CAA section 40 where appropriate. In determining the costs to be awarded, courts may consider the factors set out in CAA subsection 40(2), as follows:
- the public interest;
- whether the action involved a novel point of law;
- whether the action was a test case;
- access to justice for members of the public using class action proceedings; and
- any other factors the court or Court of Appeal considers appropriate.
Implications of a Loser Pays Cost Regime in Saskatchewan
Saskatchewan is the most popular Prairie province for class actions. However, the extent to which this legislative amendment may create a chilling effect on class proceedings in Saskatchewan remains to be seen. One obvious implication of this amendment is that individuals may be deterred from bringing class proceedings because they now face a real risk of an adverse costs award. Pursuant to subsection 40(3) of the CAA, only the representative plaintiff is liable for costs of bringing the class action, though class members may be liable for costs with respect to the determination of their individual claims. By moving away from the no-cost regime to a “loser pays” system, Saskatchewan’s legislature is making a policy choice to “balance” the costs issue, which effectively discourages plaintiffs from bringing unmeritorious claims.
Strictly speaking, the amendments increase the likelihood that costs will be awarded. What remains to be seen is whether and to what extent the Saskatchewan courts embrace the availability of costs in a class action context—to date, there is no reported decision granting costs against a representative plaintiff. There is little question that the Saskatchewan bench fully embraced the previous no-costs regime. In any event, the discretionary factors to be considered under CAA subsection 40(2) enable a continuum of costs to be awarded, ranging from no costs, to partial costs, to full costs. Despite the fact that Saskatchewan is now, by the letter of the law, a seemingly less plaintiff-friendly jurisdiction, representative plaintiffs may continue to be drawn to litigate in Saskatchewan because of other features of the CAA, such as the opt-out provisions for class members. Ultimately, only time will tell whether Saskatchewan continues to be the province of choice for class actions in the Prairies.