Del Giudice v. Thompson: Ontario Superior Court Provides Guidance On Pre-Certification Communications With Putative Class Members

Authors: Jeremy Devereux and Ted Brook, Norton Rose Fulbright Canada LLP[i]

It can be difficult to identify the boundaries of permissible pre-certification communication by a defendant with putative class members. This ambiguity can give rise to disputes between counsel regarding what is appropriate, what crosses the line, and whether a defendant should obtain court approval before communicating with putative class members.[ii]

In Del Giudice v Thompson, 2021 ONSC 2206, Perell J. provided valuable guidance to the class action bar regarding pre-certification communications with putative class members. In this article, we review how the law in Ontario has developed and suggest that this decision—and in particular, Perell J.’s postface—offers a promising path forward.

Development of the Case Law

It is well-established in Ontario that, although there is no general prohibition against defendants communicating with putative class members before certification, the court will exercise its authority under s. 12 of the Class Proceedings Act, 1992 to intervene where a defendant’s communication amounts to misinformation, intimidation, or coercion, or is otherwise made for an improper purpose aimed at undermining the class action process.[iii]

In 1176560 Ontario Ltd. v Great Atlantic & Pacific Co., 2002 CanLII 6199, for example, the court found that the defendant had used its position as franchisor improperly to monitor payments being made to plaintiffs’ counsel and increase rent on franchisees which refused to execute a release regarding the claims raised in the proposed class action.[iv] The court concluded that the defendant’s conduct and communications had a “chilling effect” on the putative class members’ attempts to assert their legal rights or obtain the information needed to make an informed decision regarding their claims.[v] In a less extreme case, Lewis v Shell, 2000 CanLII 22379, the court held that a settlement notice issued by the defendant was unfair because it did not ensure that the putative class members were acutely aware of all their rights in the class proceeding before settling.[vi] The court emphasized that “the advantage of a transparent process that ensures greater fairness to claimants through full disclosure outweighs the cost of minimal intrusion upon Shell’s otherwise freedom of action.”[vii]

In Lundy v Via Rail, 2012 ONSC 4152,[viii] the defendants in a proposed class action communicated with, and made settlement offers to, several putative class members, who had been passengers on a train that had derailed on route to Toronto. Although the defendants did not know it, some putative class members already had individual lawyer-and-client relationships with proposed class counsel. The court reviewed the existing case law and summarized the key principles regarding pre-certification communication as follows: