INTRODUCTION
A recent certification decision of the Ontario Superior Court of Justice provides important guidance on the predominance requirement introduced by the 2020 amendments to Ontario's Class Proceedings Act, 1992 ("CPA")[1]. In Pedersen v. Advanced Bionics LLC ("Pedersen")[2], the Court certified a proposed product liability class action involving cochlear implant devices but significantly narrowed both the proposed class and the damages issues that could proceed through the class action framework.
Pedersen is particularly noteworthy because it is one of the first decisions to meaningfully apply the predominance requirement following Justice Perell's analysis in Banman v. Ontario, 2023 ONSC 6187 ("Banman").[3] In doing so, Justice Morgan provides practical meaning to what predominance requires and how courts should balance common and individual issues at certification.
As discussed below, Pedersen is significant because the Court used the predominance requirement to reshape the proceeding. The decision suggests that Ontario courts may increasingly view predominance as an active tool for refining proposed class proceedings rather than merely a basis for granting or refusing certification.
BACKGROUND
The 2020 amendments to the CPA introduced two additional requirements for certification. Pursuant to s. 5(1.1), a court must be satisfied that the common issues predominate over individual issues and that a class proceeding is superior to all reasonably available means of determining entitlement to relief or addressing the impugned conduct.
One of the leading Ontario decisions interpreting predominance is Banman, an institutional abuse class action. In Banman, Justice Perell held that predominance is satisfied when the common issues, considered collectively, predominate over the individual issues in the litigation.[4] Although Banman provided an analytical framework, relatively few Ontario decisions have considered how predominance should be applied in practice, particularly in personal injury and product liability class actions.
Pedersen provided Justice Morgan with an opportunity to consider that question directly.
OVERVIEW OF PEDERSEN
The proposed class action arose from allegations that certain cochlear implant devices manufactured by the defendants were defectively designed and susceptible to "hard failures" caused by fluid ingress into the device.[5] Cochlear implants are surgically implanted hearing devices intended to function for many years. According to the plaintiff, when an implant fails, a patient may lose the ability to hear and be required to undergo painful revision surgery to replace the device.
The plaintiff alleged that the implants were defective because they were prone to failure. Although the claim was ultimately limited to those who had experienced “hard failures”, the proposed class definition initially sought certification on behalf of a broad class of implant recipients, without specifying the need for failure of those devices.[6] Claims were advanced in negligence and failure to warn.
The damages claims effectively fell into two categories. First, there were damages associated with revision surgery required to replace a failed implant.[7] The plaintiff argued that these damages were largely common because class members would undergo substantially similar surgical procedures, experience comparable recovery periods and suffer similar pain associated with replacement surgery.[8]
Second, the plaintiff sought damages for more individualized consequences, including hearing loss, social isolation, psychological injuries and other personal impacts arising from device failure.[9] It was this second category of damages that became the focus of the predominance debate.
THE PARTIES' POSITIONS ON PREDOMINANCE
The defendants argued that the action should not be certified because individual issues relating to causation and damages predominated over the proposed common issues. In particular, the defendants submitted that the individualized consequences of device failure would require extensive person-by-person inquiries.
The defendants further argued that Ontario courts should look to American jurisprudence interpreting Rule 23 of the United States Federal Rules of Civil Procedure, from which Ontario's predominance requirement was derived. The defendants noted that American courts have frequently declined to certify personal injury and product liability class actions because individualized issues relating to causation and damages predominate.[10]
The plaintiff disputed the relevance of American authorities, citing a scholarly article for the proposition that recourse to varying sources of interpretation, including American precedent, supported their argument that the new predominance requirement codifies, rather than changes, existing preferable procedure case law.[11]
The plaintiff also sought to minimize individual issues by limiting general damage claims to losses directly related to the alleged defect and device failure.
THE COURT'S APPROACH
Justice Morgan rejected both parties' positions, in part.
The Court declined to adopt the defendants' proposed approach to predominance and held that it was unlikely the Ontario legislature intended courts to import American class action jurisprudence “holus-bolus”. At the same time, however, the Court did not fully accept the plaintiff's characterization of the legislature’s addition of “predominance” as simply restating and codifying the existing state of the law.
Instead, Justice Morgan adopted a middle ground, noting that, while the explanation of section 5(1.1.)(b) provided in Banman “may be too subtle to perceive with the naked eye”, the addition of the predominance requirement must imply some degree of greater scrutiny on the preferability issue than was the case prior to the addition of the requirement. Justice Morgan suggested that the medical evidence before the Court illustrated why and how this new policy might be applied.
First, the Court narrowed the class definition from all implant recipients to only those individuals whose implants had experienced a hard failure (i.e., a malfunction within the device itself that is objectively measurable).
Second, the Court limited the types of damages that could be pursued through the proceeding to damages directly related to the alleged defect and implant failure, and medical care necessitated by that failure. Common issues damages were restricted to aggregate and, possibly, punitive damages, with only minor medical related costs to be determined on an individual basis. The extended health and socio-economic losses were eliminated from the post-common issues phase of the case, altogether.[12] Justice Morgan noted that the type of evidence that would have been required to prove these damages would have resulted in the individual issues predominating over the common ones “on almost any rational interpretation of section 5(1.1)(b).”[13]
With those modifications, Justice Morgan concluded that the proceeding satisfied the predominance and superiority requirements.[14]
PREDOMINANCE AS A CASE-MANAGEMENT TOOL
The broader significance of Pedersen lies in what it may reveal about the future role of predominance in Ontario class actions, if not (eventually) elsewhere. Ontario’s class proceeding legislation is somewhat unique in Canada: with the exception of Prince Edward Island’s, no other province’s class proceedings legislation explicitly requires that “questions of fact or law common to the class members predominate over any questions affecting class members.” With a developing body of case law in Ontario distinguishing the predominance requirement as a new case-management principle capable of shaping and rehabilitating proposed class actions, we may see other provincial legislatures follow Ontario’s lead.
Historically, certification hearings often operated as binary exercises - a proposed class proceeding was either certified or its was not. While courts in Canada have gradually moved away from this approach, the predominance requirement, as applied in Pedersen, injects a principle upon which the scope and nature of class actions can be reshaped. Pedersen suggests that a nuanced approach, with predominance of common issues at the front and center, can reshape proposed classes and common issues in a manner that is fairer to defendants, promotes access to justice for plaintiffs and class members, and encourages the efficiency of class proceedings. Rather than viewing predominance as a simple pass-or-fail test, the Court treated it as a mechanism for refining the scope of litigation.
The decision demonstrates that predominance is not necessarily an all-or-nothing inquiry. Where individualized issues threaten to overtake the common issues, a court may narrow the class definition, and restrict damages categories or otherwise reshape the proceeding, in order to preserve the predominance of common questions.
CONCLUSION
Pedersen is among the most significant post-amendment certification decisions to consider the practical operation of Ontario's predominance requirement, following Banman.
The decision provides two important lessons. First, Ontario courts remain reluctant to rely heavily on American class action jurisprudence when interpreting predominance, notwithstanding the American origins of the statutory language. Second, predominance is not necessarily a binary concept. Courts may be prepared to adopt middle-ground solutions that preserve a class proceeding while limiting aspects of the claim that are overly individualized. Predominance can operate as a case management tool to help reshape the nature and scope of proposed class actions.
Perhaps most importantly, Pedersen illustrates that Ontario courts are still working through the practical application of the predominance requirement and where the line should be drawn between common and individual issues. As additional certification decisions are released, it will become clearer whether Pedersen represents the beginning of a broader trend toward using predominance as an active case-management tool or as simply a fact-specific solution to a difficult product liability case. If the former holds true, we may eventually see other provinces join Ontario (and Prince Edward Island) in amending their legislation to include an explicit predominance requirement, to provide courts with a case management tool to refine the scope of proposed class actions and help facilitate the goals of judicial economy and access to justice.
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