Ontario Class Proceedings: Certification, Common Issues, and Litigation

March 2026 · 15 min read

Ontario's class action regime is governed by the Class Proceedings Act, 1992, SO 1992, c 6 (CPA). Since its enactment, Ontario courts have certified hundreds of class actions — against pharmaceutical manufacturers, financial institutions, government bodies, retailers, and technology companies. This guide covers the certification test, the mechanics of a class proceeding, settlement approval, and the strategic considerations that drive class action practice.

1. The CPA Framework

The CPA was enacted following the Ontario Law Reform Commission's 1982 Report on Class Actions. Its twin purposes are efficiency (avoiding repetitive litigation) and access to justice (enabling claims that would be individually uneconomic). The Supreme Court of Canada confirmed both rationales in Western Canadian Shopping Centres v Dutton [2001] 2 SCR 534.

The CPA permits "opt-out" class proceedings: members are bound by the judgment unless they opt out within the period the court specifies. This distinguishes Ontario's regime from "opt-in" systems and dramatically expands the scope of the class.

2. The Certification Test — Section 5

Certification under s. 5(1) requires the plaintiff to satisfy five conjunctive criteria. Failure on any one ground is fatal to certification.

2.1 Pleadings Disclose a Cause of Action (s. 5(1)(a))

The test under s. 5(1)(a) is identical to the "plain and obvious" test on a motion to strike: the pleading will survive if it is not plain and obvious on the facts as pleaded that the claim cannot succeed. No evidence is considered on this branch — only the pleading: Hunt v Carey Canada [1990] 2 SCR 959.

The plaintiff need not plead every element of the cause of action with particularity at this stage. Novel causes of action should be allowed to proceed unless they are "doomed to fail."

2.2 Identifiable Class (s. 5(1)(b))

The class must be capable of objective definition — it cannot depend on the merits of the claim. A class defined as "all persons who were defrauded by the defendant" requires a merits assessment to determine membership and is impermissible. The class definition must be a bright-line, objective criterion (e.g., "all persons who purchased Product X between January 1, 2018 and December 31, 2022 in Ontario").

The class definition should be neither over-inclusive nor under-inclusive. Courts will amend overbroad definitions rather than refuse certification: Hollick v Toronto [2001] 3 SCR 158.

2.3 Common Issues (s. 5(1)(c))

Common issues are the battleground of most certification motions. A common issue is an issue that "can be resolved for all class members without reference to the individual circumstances of each class member": Hollick.

The common issues need not be determinative of liability — they need only advance the litigation. Even partial advancement satisfies the criterion. However, common issues of pure law (without factual component) may be addressed more efficiently by way of reference or stated case.

Key common issues in recent Ontario class actions:

2.4 Representative Plaintiff (s. 5(1)(d))

The representative plaintiff must: (a) fairly and adequately represent the class; (b) have a workable litigation plan; and (c) not have interests that are in conflict with those of the class.

Courts assess the representative's commitment and resources but do not require perfection. A poorly drafted litigation plan can be amended rather than refused. The representative need not have the strongest claim — only a genuine claim and the commitment to advance it: Cloud v Canada(2004), 73 OR (3d) 401 (CA).

Conflict of interest disqualifies. Where a representative holds a claim that could be advanced differently from the class claim — for example, a direct contractual claim that could survive individual dismissal — courts may decline certification or require carving out the conflicting member's claim.

2.5 Preferable Procedure (s. 5(1)(e))

The "preferable procedure" requirement is the most flexible and policy-laden of the five criteria. The court weighs whether a class proceeding is preferable to individual actions or a reference, considering:

• Whether individual damages are too small to justify individual litigation (access to justice)
• Whether common issues predominate over individual issues
• Whether class members can be notified and the class managed efficiently
• The nature of the claims (pure legal questions vs fact-intensive individual inquiries)
• Whether defendants face inconsistent obligations from multiple individual actions

Preferable procedure does not require that a class proceeding be the "best" procedure — only that it is superior to the available alternatives: Hollick.

3. The Certification Motion

3.1 Evidence and the "Some Basis in Fact" Standard

Except for the cause of action criterion, the plaintiff must show "some basis in fact" for each certification requirement: Pro-Sys Consultants v Microsoft [2013] 3 SCR 477. This is a low but real evidentiary threshold — more than a bare assertion but less than proof on a balance of probabilities.

Expert evidence on common issues is frequently filed at the certification stage. Both parties often retain econometricians, statisticians, or industry experts. The court does not resolve conflicts between experts on the merits — it asks only whether the methodology is credible and capable of proving commonality if the expert's conclusions are accepted.

3.2 The Record

A certification motion record typically includes: the amended statement of claim, affidavits from the representative plaintiff and (optionally) class members, expert reports, and documentary evidence supporting commonality. Examinations on certification affidavits are permitted but limited in scope.

4. Carriage Disputes

When multiple plaintiffs' firms commence competing class actions arising from the same events, the court must resolve which counsel will carry the litigation. Carriage is determined at a separate motion, applying factors from Vitapharm Canada v F. Hoffmann-La Roche [2002] OJ No 364:

• Quality of proposed class definition
• Quality and comprehensiveness of the litigation plan
• Experience and expertise of proposed class counsel
• Proposed funding arrangements (litigation financing, contingency fee)
• Which action is further advanced
• State of negotiations with the defendant

Courts disfavour early settlements by competing counsel racing to settle before carriage is determined ("reverse auctions"). The carriage motion aims to select counsel best able to maximize recovery for the class.

5. Common Issues Trial

If the class action is certified and not settled, a common issues trial resolves the certified common issues for all class members. The trial is conducted on representative evidence; individual class members generally do not testify at the common issues stage.

A judgment on common issues binds all class members who did not opt out. If liability is established, the court proceeds to assess individual damages through either:

1. Individual issues hearings (s. 25): Class members who wish to claim must apply within a specified period and prove their individual damage.
2. Aggregate assessment (s. 24): Where the aggregate damages can be estimated without individual proof (e.g., overcharge in a price-fixing case calculated from pricing data), the court may award an aggregate sum to be distributed without individual participation.

Section 24 aggregate damages are distributed through a distribution protocol approved by the court. Unclaimed amounts are typically paid to a cy-près recipient — often a charity or law school involved in consumer or access-to-justice work.

6. Settlement Approval

Class action settlements require court approval under s. 29. The court assesses whether the settlement is fair, reasonable, and in the best interests of the class. Factors from Dabbs v Sun Life Assurance (1998), 40 OR (3d) 429 (CA):

• Likelihood of recovery if the action proceeds
• Amount and nature of discovery completed
• Settlement terms compared to litigation risk and delay
• Recommendations and experience of class counsel
• Future expense and likely duration of litigation
• Recommendation by a disinterested party or court-appointed referee
• Number and nature of objections from class members

Counsel fees in class actions are approved separately and are subject to the court's scrutiny even if the defendant agrees to pay them. Ontario courts have approved fees ranging from 15% to 33% of the class recovery, with higher percentages in smaller or more difficult cases.

7. Appeals

Under s. 30, a certification order (or refusal to certify) is appealable to the Divisional Court with leave, and then to the Court of Appeal with leave. Given that certification typically drives settlement value, defendants aggressively seek leave to appeal adverse certification decisions.

The standard of review on appeal is deferential: the motion judge's exercise of discretion will not be disturbed absent an error in principle or palpable and overriding error on the factual findings: Hollick.

8. Costs in Class Proceedings

The CPA contains a modified costs regime designed to facilitate access to justice:

• Threshold for costs against plaintiff: Under s. 31, a defendant who succeeds against the class may not recover costs from individual class members (who did not participate actively). Costs are assessed only against the representative plaintiff and, potentially, class counsel.
• Costs against class counsel: Where class counsel's conduct has been improper or where the action was frivolous, costs may be ordered against counsel personally.
• Litigation funding agreements: Third-party funders who provide financing in exchange for a share of the recovery must have their agreements approved by the court. Approved funding agreements are enforceable and the funder's share is paid from the settlement fund.

9. Amendments to the CPA (Bill 161, 2020)

Bill 161 (Smarter and Stronger Justice Act, 2020) amended the CPA substantially, with changes in force from October 1, 2020:

• New "preferable procedure" factors: Courts must consider whether common issues predominate over individual ones and whether class members can realistically be identified and notified.
• Carriage: Codification of the court's jurisdiction to determine carriage and factors to be applied.
• Case management: Mandatory case management from the outset of class proceedings.
• Notice requirements: Enhanced court control over the content and timing of class notice.
• Limitation periods: Tolling provisions clarified — the limitation period is suspended from the date the proceeding is commenced for all potential class members.

10. Practical Considerations for Class Action Counsel

• Commence early to avoid carriage competition: Filing a well-drafted statement of claim and certification motion record before competing counsel creates a significant carriage advantage.
• Invest in expert evidence on commonality: The "some basis in fact" standard for common issues is low but requires credible evidence. A qualified expert whose methodology survives scrutiny is worth the cost at certification.
• Draft a comprehensive litigation plan: Courts regularly criticize vague plans. Address class notification, document management, individual issues assessment, and distribution methodology in the plan even if details will be refined later.
• Build in aggregate damages analysis early: If the case is amenable to aggregate assessment (price-fixing, overcharge, uniform underpayment), retain an economist to develop the model before certification. This strengthens both the certification motion and settlement negotiations.
• Manage opt-out notices carefully: The opt-out period is a critical juncture. Defendants may communicate directly with class members to encourage opt-outs. Courts can issue orders restricting such communications if they are misleading.
• Settlement timing and cy-près: Negotiate a cy-près recipient early. Courts scrutinize cy-près distributions and may reject recipients that appear designed to benefit class counsel (e.g., a law school clinic that employed class counsel's law partner).

Conclusion

Ontario's class action regime is sophisticated, adversarial, and heavily litigated. The five-part certification test, the "some basis in fact" standard, and the expanded role of expert evidence mean that certification motions have become miniature trials. Counsel who invest in a strong record — rigorous pleadings, credible expert evidence, and a detailed litigation plan — are best positioned to achieve certification and drive settlement value for the class.