In Hodge v. Neinstein, the Ontario Court of Appeal upheld the Divisional Court and the motion judge, who both certified a class action against a plaintiff-side personal injury firm. In the action, the plaintiffs allege that the contingency fee arrangements they entered with the firm breached the Solicitors Act, primarily because the contingency fees related to costs awards in an impermissible manner. The plaintiffs claimed other defects with the fee arrangements as well, and pleaded numerous causes of action including breach of contract and breach of fiduciary duty. On appeal, the defendant argued that the Solicitors Act was a complete code and precluded recovery, and that solicitor-client privilege issues made a class proceeding not the preferable procedure. The Court of Appeal, like the courts below, rejected these arguments, and upheld the certification decision.
The Court of Appeal also dismissed part of the cross-appeal, in which the plaintiff took issue with the Divisional Court's denial of an amendment to the Notice of Application (the proceeding was brought by way of application under the Solicitors Act). On appeal of the certification decision to the Divisional Court, the plaintiff sought to add a cause of action. The Divisional Court denied the amendment and the Court of Appeal upheld that decision. Citing Keatley Surveying Ltd. v. Teranet Inc., the Court held it was not permissible to recast the proceeding on appeal of certification. Rather, amendments on appeal of certification will only be permissible if they focus the issues, not where they add an entirely new cause of action, as the plaintiffs tried to do in this case.
This case is notable for defendants because the Court limited the amendments that will be allowed on the appeal of certification. It is also notable because the Court did not take issue with a class proceeding being brought by way of application, even where not all of the causes of action are necessarily amenable to determination on an application.