Product Liability
A general discussion of some aspects of product liability class litigation is set out below.
Ontario New Home Warranty Program v. Chevron Chemical Co., (1999), 46 O.R. (3d) 130, involves a product liability claim concerning residential mid-efficiency gas or propane furnaces, boilers and hot water heaters with high temperature plastic vent (HTPV) exhaust systems. The Ontario New Home Warranty Program (ONHWP) and two individual plaintiffs brought the action on behalf of some 11,000 Ontario home owners who installed furnaces with allegedly defective plastic venting pipes. ONHWP made a subrogated claim on account of many homeowners whom it paid to repair or replace appliances and HTPV piping.
Some of the defendants were keen to have the action certified as a class proceeding after what they considered a satisfactory settlement had been negotiated. These defendants wanted the settlement to bind all potential class members to avoid any potential future claims. The proposed settlement agreement contained a “bar order” which precluded claims by (or against) non-settling defendants. Thus, the non-settling defendants, in the event they were pursued, could not claim contribution or indemnity from the settling defendants. Mr. Justice Winkler certified the class and approved the bar order on the basis that the rights of the non-settling parties were not prejudiced. The terms of the settlement agreement were such that there could be no claim against the non-settling defendants other than for damages based on their several liability for their own negligence.
In Gariepy v. Shell Oil Company [2002] O.J. No. 2766, the court refused to certify a products liability claim in respect of certain allegedly defective plumbing pipes and fittings. The plaintiffs claimed that the fittings and piping, when used in potable water plumbing systems, would fail prematurely. Mr. Justice Nordheimer was particularly concerned about the scope and complexity of individual issues which, he concluded, would overwhelm the common issues:
“The fundamental problem with the plaintiffs’ position on the common issues is that the determination of whether the defendants’ products are ineffective does not, in my view, materially or significantly advance the overall determination of the ultimate liability issue. It does not do so because of the fact that there are a myriad of reasons why any given class members’ plumbing system might fail.” (Nordheimer J. at para. 61.)
The judge did note that product liability cases usually offer a good foundation for class actions, but emphasized that each case must be evaluated on its own facts (para. 63). Mr. Justice Nordheimer’s decision in this and other recent cases represents a much more conservative approach to class actions generally.
It should be noted that the court subsequently certified the action against the defendant DuPont (which had not been a party to the dismissed, contested certification motion) for settlement purposes. Nordheimer J noted that the requirements for a settlement certification are not as rigorously applied as on the usual certification motion. See Gariepy v. Shell Oil, [2002] O.J. No. 4022.
In Caputo v. Imperial Tobacco Ltd., [2004] O.J. No. 299 (S.C.J.), Winkler J. refused to certify a proposed class action in respect of smokers against the tobacco company. The court found that the questions of causation and damages for personal injury required individual rather than common proof and the common issues were overwhelmed by the individual issues. The class action would not be “fair, efficient and manageable” and was not the preferable procedure.
It is fair to say, however, that Canadian courts have repeatedly certified product liability class actions because they have consistently found that certification is the best way to promote access to justice, judicial economy and behaviour modification for such claims. A list of some of the leading certified product liability cases is set out below:
(a) Nantais v. Telectronics Propriety (Canada) Ltd. (1995), 25 O.R. (3d) 331 (Ont. Gen. Div.); leave to appeal to Div. Ct. denied;
(b) Chace v. Crane Canada Inc. [1997] B.C.1. No. 2862 (B.C.C.A.);
(c) Ontario New Home Warranty Program v. Chevron (1999), 46 O.R. (3d) 130 (S.C.1);
(d) Wilson v. Servier Canada Inc. (2000), 50 O.R. (3d) 219 (S.C.1); leave to appeal denied (2000) 51 O.R. (3d), 20 (Div. Ct.); leave to appeal to the Supreme Court denied [2001] S.C.C.A. No. 88;
(e) Hoy v. Medtronic, Inc. [2001] B.C.1. No. 1968 (B.C.S.C.); appeal denied, [2003] B.C.C.A. 316;
(f) Harrington v. Dow Corning Corp. [2000] B.C.1. No. 2237 (B.C.C.A); leave to appeal to the Supreme Court of Canada denied;
(g) Campbell v. Flexwatt Corp., [1997] B.C.1. No. 2477 (B.C.C.A); leave to appeal to the Supreme Court of Canada denied;
(h) Bendall v. McGhan Medical Corp. (1993), 14 O.R. (3d) 734, leave to appeal dismissed [1993] 0.1.4210 (Gen. Div.); (i) Endean v. The Canadian Red Cross Society [1997] B.C.1. No. 1209 (B.C.S.C.); affirmed [1998] B.C.1. No 724 (C.A.).; (j) Dalhuisen v. Maxim’s Bakery Ltd., [2002] B.C.1. No. 729 (B.C.S.C.);
(k) Bouchanskaia v. Bayer Inc., [2003] BCSC 1306 (S.C.);
(l) Olsen v. Behr Process Corp., [2003] B.C.1. 1887.(B.C.S.C.);
(m) Reid v. Ford Motor Co., [2003] B.C.1. No. 2489 (B.C.S.C.);
(n) Anderson v. St. Jude Medical Inc., [2003] OJ. No. 3556 (S.CJ);
(o) Fakhri v. Alfalfa’s Canada Inc., [2003] B.C.S.C. 1717;
(p) Wheadon v. Bayer Inc. [2004] NJ. No. 147 (NLSCTD); affd (sub nom. Bayer Inc. v. Pardy) [2005] NJ. No 122 (N.L C.A.) leave to appeal refused [2005] S.C.C.A. No. 211 (S.C.C.).;
(q) Walls v. Bayer Inc., [2005] MJ. No.4 (M.B.Q.B.), appeal dismissed [2005] MJ. No. 286 (MB. C.A.) leave to appeal refused [2005] S.C.C.A. No. 409 (S.C.C.);
(r) Cardozo v. Becton, Dickinson & Co. [2005] B.CJ. No. 2683 (B.C.S.C.);
(s) Knight v Imperial Tobacco Canada Ltd., (2005) 250 D.L.R. (4th) 347, 2005 CarswellBC 236, 2005 BCSC 172, [2005] B.C.W.L.D. 2551, [2005] B.C.J. No. 216, 43 B.C.L.R. (4th) 169 (B.C. S.C. Feb 08, 2005) rev’d in part by [2006] B.CJ. No.1 056 (B.C. C.A); and
(t) Serhan v. Johnson, [2004] OJ. No. 2904 (S.CJ.) at paras. 34-39,46 and 65; leave to appeal granted [2004] OJ. No. 4580 (S.CJ.) at paras. 6 and 7; Serhan v. Johnson, [2006] OJ. No.2421 Div. Ct.).
Canadian courts and legislators have endorsed the effectiveness of class action legislation in dealing with product liability suits because such cases typically involve a central allegation as to whether a product was defective or caused harm. The cost of marshalling the expert evidence needed to prove this allegation at trial can be prohibitive for individual plaintiffs. Only by combining claims within a class proceeding will injured Canadians have a fighting chance against a large corporate defendant. The 1982 Report of the Ontario Law Reform Commission on Class Actions states:
“In particular, product liability claims may often be ‘individually non-recoverable’. The complexity of proving a products liability case, involving allegations relating to planning, design and manufacture of sophisticated products, may create a situation in which the potential recovery does not justify the cost of a lawsuit. Unlike the position adopted by certain American courts in this area, the Commission is of the view that threshold questions relating to the existence and nature of a product defect, or a representation made in connection with a product, present common issues that may well be amenable to class treatment, and that individual issues may, in appropriate, cases) be determined in subsequent proceedings.”
Ontario Law Reform Commission, 1982 Report on Class Actions, p. 264.
Mr. Justice Winkler, judicial manager for class actions in the Toronto region, wrote:
“Product liability cases could be expensive for plaintiffs. Although each claim might be small, they often devolved into battles between experts. The high cost of marshalling this evidence and the lengthy trials which ensued meant that few plaintiffs could afford to pursue such cases to trial. . . Class proceedings legislation provided a solution to these problems by enabling plaintiffs to bring their claims as a group. . . In short, product liability cases were the quintessential model for the type of case class proceedings legislation was designed to remediate.”
Theall, Lawrence et al., Product Liability: Canadian Law and Practice (Aurora: Canada Law Book, October 2001).