The Alberta Court of Appeal recently allowed an appeal in Warner v Smith & Nephew Inc., overturning a lower court decision declining to certify a class action in a product liability matter. Few national class actions have been certified in Alberta and therefore the reasoning of Alberta’s highest court (affirming a low certification standard) may be of interest to institutions operating nationally.
The appellant commenced an action against a manufacturer for damages resulting from the implantation of the Birmingham Hip Replacement System. Under the Alberta Class Proceedings Act (“CPA”), the appellant sought certification of the action as a class action. The lower court denied certification, holding on the strength of competing evidence that “there was not an identifiable class of 2 or more persons, that the claims did not raise a common issue, that a class proceeding was not a preferable method for resolving the common issue, and that the appellant was not a proper representative plaintiff”.
The Court of Appeal allowed the appeal and certified the action, a rare example of this appellate court disagreeing with the findings of a case management judge on a certification motion. It affirmed that a certification motion “does not involve a consideration of the claim on its merits”, but rather is a procedural motion concerning the form of an action. The motion is intended to show whether a class proceeding is the appropriate procedure for the prosecution of the claim, and the standard is merely whether the evidence establishes that there is “some basis in fact” that a class proceeding is the preferable procedure to resolve the common issues in the claim.
The court examined each of the statutory criteria through that lens, a relatively low threshold, criticizing the certification judge for weighing conflicting evidence on the relative merits of the parties’ positions.
The majority said:
As the Supreme Court of Canada has made clear, the question at this stage is not whether the plaintiff’s claim is likely to succeed at trial, or even whether there is some basis in fact for the claim itself, but rather whether there is some basis in fact that establishes the procedural certification requirements, in this case that a class action is a preferable procedure.
In his dissent, Justice Slatter would have allowed the appeal and certification but would have limited the class proceeding to a narrower set of potential class members and common issues. However, he too noted the low threshold at the certification stage, concluding:
I think it important to emphasize that the Canadian approach at the certification stage does not allow for an extensive assessment of the complexities and challenges that a plaintiff may face in establishing its case at trial…
The Canadian position is that the certification application is still heavily focused on whether the procedure is appropriate. It is not a place for a “robust” analysis of the merits, nor the resolution of disputed factual issues, and any in-depth weighing of the evidence is inappropriate. The test of the merits on certification is a very low standard, but it must amount to more than symbolic scrutiny. The sufficiency of the evidence may often be a factor in determining, ultimately, whether a class proceeding is the “preferable procedure”.
This decision will be important in Alberta actions brought under the CPA, and defendants will need to be prepared to focus on the key elements of the statutory test (Identifiable class? Common issues? Is a class proceeding the preferable procedure? Suitable representative plaintiff?) rather than the ultimate merits of the case.