Liability Systems

1.1        What systems of product liability are available (i.e. liability in respect of damage to persons or property resulting from the supply of products found to be defective or faulty)? Is liability fault based, or strict, or both? Does contractual liability play any role? Can liability be imposed for breach of statutory obligations e.g. consumer fraud statutes?

Product liability in Canada is grounded in the common law, except in the province of Québec, which is a civil law jurisdiction.  The law is similar across the country and is based on product liability cases decided by the Supreme Court of Canada.

Liability may be found in either tort or contract with respect to damages to both persons and property as a result of a product failure such as defect, malfunction, or design flaw.  Redress may be sought through formal court proceedings, private arbitration, mediation, or another form of alternative dispute resolution depending on the facts of the case and any agreement between the parties.  There is no principle of strict liability at common law.  This differs in the Province of Québec where product liability claims are grounded in strict liability.

Contractual liability may interact with product liability, depending upon the nature of the contractual arrangements – for example, a contract might provide specific remedies in the event that a product is defective.  Generally speaking, Canada places a great deal of emphasis on the ability of private actors to organise their legal affairs as they see fit, and as such, any contractual terms between parties will be prima facie enforceable, with certain exceptions, such as for purchase of consumer products.

There are three levels of government in Canada – federal, provincial and municipal.  In 2011, the federal government enacted the Canada Consumer Product Safety Act (CCPSA), broad legislation that affects all manufacturers, distributors, retailers and importers of consumer products in Canada.  Every Canadian province also has legislation that provides remedies to consumers for defective consumer products.  These statutes generally provide statutory warranties of merchantability and fitness for purpose with respect to all consumer products marketed within the province.  These statutes also provide for individual causes of action for breach of deemed warranties, in addition to possible government action.  Remedies available include rescission of the contract of purchase and sale, and injunctive relief.

Many expected that the introduction of the CCPSA would result in an increase in Canadian product liability litigation.  To date, such a trend has not been seen.  Also, there remains no clarity on how the federal CCPSA interplays with provincial consumer product regulation.  Some products – for example, electrical products – may be governed by both federal and provincial authorities simultaneously. 

1.2        Does the state operate any schemes of compensation for particular products?

No level of the Canadian government provides schemes of compensation for particular products, with two exceptions: i) Québec operates a no-fault compensation scheme for injuries arising out of the use of vaccines; and ii) the federal and provincial governments established a compensation scheme for HIV and Hepatitis C claimants from the “tainted blood” scandal of the 1980s.

1.3        Who bears responsibility for the fault/defect? The manufacturer, the importer, the distributor, the “retail” supplier or all of these?

Each of the designer, manufacturer, importer, distributor or retail supplier of a defective product can be liable for damages arising from use of that product.  As a general rule, it is the designer that bears the ultimate responsibility for a defective product if harm derives from a design flaw; the manufacturer who bears responsibility for a manufacturing defect.  A plaintiff can bring proceedings against anyone and everyone along the supply chain.  It is therefore common practice for a claimant to bring proceedings against every party in the supply chain.  Unrelated parties may in turn sue one another for contribution and indemnity in respect of the proceeding.

The CCPSA regulates all products, including components, parts or accessories that may reasonably be expected to be obtained by an individual for non-commercial use including for domestic, recreational and sports purposes, and includes its packaging.  The CCPSA imposes obligations and liabilities upon each member of the product supply chain.  The CCPSA further provides for:

  • a blanket prohibition on the marketing of unsafe products;
  • support by a supplier of the safety of their product;
  • an obligation on a supplier to report adverse events;
  • broad governmental investigatory and enforcement powers, including ordering product recalls; and
  • penalties in the form of fines of up to C$5,000,000 and/or prison terms of up to two years for breaches of the CCPSA.

1.4        In what circumstances is there an obligation to recall products, and in what way may a claim for failure to recall be brought?

At common law, every participant in the product supply chain has a duty to prevent harm arising from use of its product.  This duty may include notification of risk and product recall in certain circumstances, not as a standalone duty, but as part of the “duty to warn” jurisprudence.

In addition to the potential common law obligation, the CCPSA gives the power to the Federal Minister of Health to order a consumer product recall where the Minister is satisfied a recall is warranted.  Recall of food and agricultural products can be required under companion legislation governing such products.

1.5        Do criminal sanctions apply to the supply of defective products?

In addition to the quasi-criminal penalties under the CCPSA and legislation such as the Food and Drugs Act and the Motor Vehicle Safety Act, a supplier of a defective product could be subject to criminal sanctions, in extraordinary circumstances, such as criminal negligence and fraud or for violations of the Competition Act.


2.1        Who has the burden of proving fault/defect and damage?

The plaintiff bears the burden of proving the constituent elements of the case on a balance of probabilities.  The constituent elements are: duty of care owed; breach of that duty (fault); causation in fact and causation at law; and resultant damages.  There is no reverse onus, although in certain cases, the defendant’s failure to lead evidence refuting a plaintiff’s case has led to an adverse inference against it.

2.2        What test is applied for proof of causation? Is it enough for the claimant to show that the defendant wrongly exposed the claimant to an increased risk of a type of injury known to be associated with the product, even if it cannot be proved by the claimant that the injury would not have arisen without such exposure? Is it necessary to prove that the product to which the claimant was exposed has actually malfunctioned and caused injury, or is it sufficient that all the products or the batch to which the claimant was exposed carry an increased, but unpredictable, risk of malfunction? 

The test for causation is the so-called “but for” test, which holds that the requirement for causation is met where it is proven that the harm would not have occurred “but for” the actions of a defendant.  Generally speaking, it is not enough for a plaintiff to demonstrate an increased risk of a type of injury claimed as a result of use of a product without demonstrating actual causation.  This strict standard may be moderated depending on the particular facts of a claim.  An inference of negligence against a manufacturer will be hard to refute where the defect leading to harm arose as a result of a design defect or a defect in the manufacturing of the product.  Actual causation is a necessary component of finding of liability – Canadian law does not recognise an increase in risk as being sufficient.

2.3        What is the legal position if it cannot be established which of several possible producers manufactured the defective product? Does any form of market-share liability apply?

With the exception of specific statutes ascribing market share liability for manufacturers of tobacco products, market share liability is not a concept ordinarily applicable in Canadian law.

2.4        Does a failure to warn give rise to liability and, if so, in what circumstances? What information, advice and warnings are taken into account: only information provided directly to the injured party, or also information supplied to an intermediary in the chain of supply between the manufacturer and consumer? Does it make any difference to the answer if the product can only be obtained through the intermediary who owes a separate obligation to assess the suitability of the product for the particular consumer, e.g. a surgeon using a temporary or permanent medical device, a doctor prescribing a medicine or a pharmacist recommending a medicine? Is there any principle of "learned intermediary" under your law pursuant to which the supply of information to the learned intermediary discharges the duty owed by the manufacturer to the ultimate consumer to make available appropriate product information?

A manufacturer owes a duty to warn of all material risks of which it was aware, or it ought to have been aware, resulting from the ordinary use of its product.  The materiality of a risk depends on: reasonable foreseeability (the likelihood of the risk materialising); the degree of harm should the risk materialise (ranging from inconsequential product malfunction to severe health consequences); the obviousness of the risk (for example, the danger of cutting oneself with a knife would be the type of risk of which a manufacturer would not ordinarily be required to warn); and the audience to whom the warning would be given (for example, sophisticated professionals as opposed to children, etc.).  The duty to warn is a continuous one.  The content of the warning must be adequate, understandable and clearly communicated.  The scope of the warning must be commensurate with the degree of risk or gravity of the hazard presented.

As a general rule, where a product is only available through a “learned intermediary”, the detail and sophistication of the warning is expected to be more than would be given to the average consumer.  For example, in the case of prescription drugs, the manufacturer is required to advise the prescribing physician of all material risks of which it is aware and to set out its findings with respect to the product so that the learned intermediary may evaluate whether use of the product is indicated for a particular patient.  Where the warning to the end user is to be given by the learned intermediary and where the manufacturer provides appropriate information to same, the adequacy of that warning shifts.  Except in very limited circumstances, no concurrent duty to warn the end user remains with the manufacturer.

Defendants may also rely upon the principle of “intermediate examination” where, at the time of product distribution, the manufacturer can reasonably anticipate that an intermediate party, such as a downstream manufacturer or distributor or a consumer, will inspect the product before use.  Where it is reasonable to expect that such examination would reveal the defect, the manufacturer may argue that it owes no duty of care to the end user.  That said, recent trends suggest that the defence will weigh on apportionment of liability, rather than negation of the duty of care.

Defences and Estoppel

3.1        What defences, if any, are available?

In addition to defences arising out of an inability to prove the constituent elements of a tort, including of legal causation, a number of affirmative defences may be available:

(i)  contributory negligence;

(ii)  intervening act of another, including misuse or alteration of the product, the learned intermediary rule and intermediate examination (as above);

(iii)  voluntary assumption of risk;

(iv)  expiry of a limitation period; and

(v)  contractual limitation of liability.

3.2        Is there a state of the art/development risk defence? Is there a defence if the fault/defect in the product was not discoverable given the state of scientific and technical knowledge at the time of supply? If there is such a defence, is it for the claimant to prove that the fault/defect was discoverable or is it for the manufacturer to prove that it was not?

In the absence of a strict liability regime, courts in the common-law provinces of Canada have not specifically recognised a “state of the art” defence.  A defendant, however, may plead that it had no duty, in the circumstances of a particular case, to warn of or to design a product free of the defect given the state of scientific and/or technical knowledge as of the date of manufacture.

3.3        Is it a defence for the manufacturer to show that he complied with regulatory and/or statutory requirements relating to the development, manufacture, licensing, marketing and supply of the product?

Evidence that a manufacturer complied with all relevant regulatory and/or statutory requirements is not a defence to a product liability claim; however, breach of such requirements does not establish liability.  Rather, evidence with respect to regulatory or statutory requirements is relevant to, but not dispositive of, the question of whether a manufacturer ought to be found liable in civil proceedings for damages arising out of use of its product.

3.4        Can claimants re-litigate issues of fault, defect or the capability of a product to cause a certain type of damage, provided they arise in separate proceedings brought by a different claimant, or does some form of issue estoppel prevent this?

The doctrine of issue estoppel requires a mutuality of parties in order to preclude re-litigation of a claim.  However, Canadian courts have adopted a very broad “abuse of process by re-litigation” test that can prevent re-litigation of issues, even absent mutuality of parties, where in the opinion of the court, the continuance of a claim would amount to a collateral attack on a prior judgment by a court of competent jurisdiction.

3.5        Can defendants claim that the fault/defect was due to the actions of a third party and seek a contribution or indemnity towards any damages payable to the claimant, either in the same proceedings or in subsequent proceedings? If it is possible to bring subsequent proceedings is there a time limit on commencing such proceedings?

Defendants may seek apportionment of liability where damages have been caused or contributed to by two or more persons.  In such cases, each person is liable to make contribution and to indemnify each other to the degree to which they are at fault, although each defendant may be liable to cover the whole of the plaintiff’s claim and then seek recovery from the other defendants or third parties.  A claim for contribution and indemnity can be made in the same proceeding, by way of a cross-claim or third party claim, or in a subsequent proceeding.

There may be specific limitations with respect to the timing for bringing a subsequent claim.  For example, in Ontario, a subsequent claim must be brought within two years from the day on which the first claim seeking contribution and indemnity was served.

3.6        Can defendants allege that the claimant’s actions caused or contributed towards the damage?

Defendants may plead contributory negligence as a full or partial answer to claims asserted, depending upon the degree to which the claimant is at fault.


4.1        In the case of court proceedings is the trial by a judge or a jury?

There is no constitutional right to trial by jury.  Although most common-law jurisdictions allow for jury trials, civil jury cases remain infrequent outside motor vehicle personal injury claims.  In complex litigation, such as product liability trials, where expert testimony is often based on complicated scientific or other technical issues, the trial will usually be heard by a judge alone.  If a jury notice has been served, a motion to strike same will often be brought at the outset of the trial.

4.2        Does the court have power to appoint technical specialists to sit with the judge and assess the evidence presented by the parties (i.e. expert assessors)?

Courts have an inherent power to manage their own process, which includes the ability to appoint experts or other specialists to assist the presiding judge in understanding the evidence.  This, however, is not a frequent practice.  Experts are usually called by the parties.  Such witnesses may give evidence by way of opinion evidence provided that the court accepts their qualifications as being expert on the issues on which their evidence is being called.  Expert reports must be provided in advance of the trial outlining the expert’s anticipated evidence.  Testimony within the “four corners” of the report is then given in open court and is subject to examination and cross-examination.

4.3        Is there a specific group or class action procedure for multiple claims? If so, please outline this. Is the procedure ‘opt-in’ or ‘opt-out’? Who can bring such claims e.g. individuals and/or groups? Are such claims commonly brought?

All but one Canadian province have enacted legislation allowing for certification of class action proceedings.  Whether the action is “opt-in” or “opt-out” depends upon the legislation in the relevant province and the scope of the class certified.  Before a class action is allowed to proceed, the parties must go through a certification process by which a court decides on the suitability of the proposed action for class treatment against enumerated criteria.  Generally speaking, any individual, corporate or otherwise, may institute a proposed class action on behalf of a defined class of proposed plaintiffs.  The interests of the plaintiff class are represented by court-approved representative plaintiff(s) who is prepared to act, and who has no conflict of interest with the class. Certification of “common issues” is applied to avoid duplication of fact-finding and analysis even though the resolution of the common issues may not resolve the litigation as a whole.  Adjudication of the common issues must, however, resolve an element common to each class member’s claim.  A class action must be found to be a preferable procedure for the adjudication of the common issues.  In most provinces, there is no “predominance” test in the context of the common issues analysis.  In provinces that do address a predominance test, it is articulated as part of the “preferable procedure” analysis. 

Class actions are now a central part of the Canadian product liability landscape.  They are brought primarily in Ontario, Québec, British Columbia and Saskatchewan.  An extensive body of jurisprudence has been developed with respect to the class action procedures.  One procedural issue that has caused a great deal of discussion in recent years is the so-called “multijurisdictional” problem, where class actions regarding the same matters are brought against the same defendants by different plaintiffs in different jurisdictions.  Although proposals have been made to solve the current situation whereby duplicative, overlapping actions proceed in a multiplicity of courts, there is currently no legislative solution in place.

4.4        Can claims be brought by a representative body on behalf of a number of claimants e.g. by a consumer association?

Claims may be brought by a representative body; however, no person is bound by a court determination unless he or she is a party to the proceeding in which the Order is made, or unless the proceeding is a class action (or in rare instances subject to an Order under older “representative action” rules of procedure).  Claims by consumer associations are more usual in Québec than in the common-law provinces.

4.5        How long does it normally take to get to trial?

The length of time required for a matter to reach trial depends on a number of factors, including:

(1)        the jurisdiction in which the claim is brought;

(2)        the type of procedure that the plaintiff elects to utilise as allowed (such as a proceeding under class action rules, regular rules, small claim rules, “simplified rules”, or other procedural rules that may be available); and

(3)        the number of parties and complexity of the matters in issue.

Timelines to reach trial may also vary significantly within a jurisdiction, depending upon the location in which a claim is brought.  For example, claims brought under regular rules in Toronto, Ontario – widely regarded as the busiest civil court jurisdiction in Canada – may take three years or more to reach trial.  The same claim asserted elsewhere in Ontario may reach trial in a year or less depending upon local factors.

4.6        Can the court try preliminary issues, the result of which determine whether the remainder of the trial should proceed? If it can, do such issues relate only to matters of law or can they relate to issues of fact as well, and if there is trial by jury, by whom are preliminary issues decided?

Most jurisdictions in Canada have procedural rules that permit parties to bring motions for summary determination.  These procedures may narrow or resolve the issues entirely.  Depending upon the particular jurisdiction, the powers of the court on such preliminary motions can be quite broad including, as in Ontario and British Columbia, providing judges with the power to make factual determinations, to weigh matters of credibility and even to conduct “mini trials” with viva voce evidence.  In all cases, only a judge may hear a motion for summary judgment, even if the parties intend a trial by jury.

4.7        What appeal options are available?

All jurisdictions in Canada provide at least two levels of appeal from a trial court decision.  In some instances, as in Ontario, there is the possibility of three levels of appeal.  Leave of the court to which the appeal is to be brought may be required depending upon the nature of the issue decided, such as if the decision relates to interlocutory as opposed to final determinations.

4.8        Does the court appoint experts to assist it in considering technical issues and, if not, may the parties present expert evidence? Are there any restrictions on the nature or extent of that evidence?

See question 4.2 above.  Although a court has broad discretion to manage its own procedure, which could include the appointment of an independent expert to assist it, the ordinary practice is for the parties to retain experts to provide opinions to the court.

Such expert evidence must: i) be relevant; ii) be necessary in assisting the trier of fact; iii) not offend any exclusionary rule; and iv) be given by a properly qualified expert.  Expert opinions must relate to matters outside the ordinary expertise and understanding of the court, such as questions of causation relating to scientific or engineering issues.

4.9        Are factual or expert witnesses required to present themselves for pre-trial deposition and are witness statements/expert reports exchanged prior to trial?

Pre-trial discovery is required of the parties.  In general, a party must produce only one fact witness for oral examination prior to trial.  Discovery of further fact witnesses, or discovery of third party fact witnesses, may be obtained by court order or agreement among counsel.

Expert witnesses are required to deliver a report detailing their findings, opinions and conclusions prior to trial, and upon which they may be cross-examined.  Unless such a report is delivered to the opposing party, the expert’s evidence will be refused by the court.

4.10      What obligations to disclose documentary evidence arise either before court proceedings are commenced or as part of the pre-trial procedures?

Each party to a proceeding is required to disclose the existence of all documents in their possession, power, or control that are relevant to any matter in issue in the proceeding and to make such documents available to any other party.  Each party is also required to disclose the existence of any documents over which they claim privilege or that are relevant to the proceeding, but otherwise unavailable in the party’s hands.  Such documentary discovery ordinarily takes place prior to oral discovery of a witness; however, the obligation to disclose the existence of documents is ongoing through to the end of trial.

It is possible to obtain pre-proceeding discovery, but to do so requires obtaining a court order and is very rarely done.

4.11      Are alternative methods of dispute resolution required to be pursued first or available as an alternative to litigation e.g. mediation, arbitration?

Alternative methods of dispute resolution need not be pursued prior to commencing litigation, unless the parties have contractually agreed to do so.  Parties may agree to alternative dispute resolution prior to, or at any time during, the course of a legal claim.  There are no restrictions on the parties’ ability to choose and to craft the resolution process most suitable to them and the matters in issue, and to include both mediation and arbitration.  In certain provinces and in certain types of cases, mediation before a recognised/roster mediator is a mandatory part of the court process. 

The Supreme Court of Canada has held that the requirement for arbitration in consumer contracts of adhesion may be limited or curtailed by clear statutory language, notwithstanding that arbitration clauses are prima facie enforceable.

4.12      In what factual circumstances can persons who are not domiciled in your jurisdiction be brought within the jurisdiction of your courts either as a defendant or as a claimant?

In 2012, the Supreme Court of Canada delivered a trilogy of decisions that substantially revised and simplified the test for personal jurisdiction in tort cases in Canadian courts.  As a result, cases framed in product liability must fit within one of four categories with "presumptive connecting factors" to give rise to a court's jurisdiction over the matter:


(b)        the defendant carries on business in the province;

(c)        tort was committed in the province; or

(d)        a contract connected with the dispute was made in the province.

While the list of presumptive connecting factors is not closed, the Supreme Court of Canada has made it difficult to expand the categories above.  To qualify, a new category would have to be similar to the four presumptive categories, or find substantial support in case law, statute, or the law of other legal systems with a shared commitment to order, fairness, and comity.  The presumptive factors – whether existing or new – can be rebutted but with difficulty.  The Supreme Court emphasised that the presumptive connecting factors must be "objective".  Courts have been discouraged, in future, from considering jurisdictional findings to be an exercise of discretion.  Of significant change, the presence of a plaintiff in a province, or even a plaintiff who suffers injury in a province arising from a tort committed elsewhere, is no longer a sufficient connecting factor to ground jurisdiction.

Time Limits

5.1        Are there any time limits on bringing or issuing proceedings?

Limitation periods within which a legal proceeding must be brought are prescribed by statute.  Generally speaking, limitation periods in Canada range from two to six years from the time that the cause of action arises.  Usually limitation periods run from the date the claim was discovered or ought to have been discovered by a reasonable person.  “Tolling” agreements may be entered into by potential litigants to extend limitation periods where, for example, parties wish to negotiate or engage in other alternative dispute resolution methods, rather than commence proceedings immediately.  In addition, class proceedings legislation usually contains a statutory ‘tolling” of the limitation period for absent class members.

Many provinces have an “ultimate limitation period”, which provides that no action may be brought regardless of discoverability.  In Ontario, this arises on the fifteenth anniversary of the day on which the actionable act or omission occurs.  In the case of continuing acts or omissions, the ultimate limitation period occurs on the fifteenth anniversary of the day on which the actionable act or omissions cease(s).

5.2        If so, please explain what these are. Do they vary depending on whether the liability is fault based or strict? Does the age or condition of the claimant affect the calculation of any time limits and does the Court have a discretion to disapply time limits?

As strict liability does not exist in Canada for common-law product liability matters, limitation period issues apply equally regardless of the specific type of claim.

Limitation periods do not run during the period in which a potential claimant is incapable of commencing a proceeding because of his or her physical, mental or psychological condition, and during which time he or she is not represented by a litigation guardian.  A person is presumed to have capacity to commence a proceeding unless the contrary is proved.

Courts have considerable discretion to forgive a strict application of limitation periods.  That said, in most cases, an expired statutory limitation period will be a high bar for a potential claimant to overcome.

5.3        To what extent, if at all, do issues of concealment or fraud affect the running of any time limit?

As noted above, limitation periods do not begin to run unless and until the cause of action is discovered or ought to have been discovered by a reasonable person.  As such, where a claim is not discoverable due to concealment or fraud, the limitation period does not begin to run.  Similarly, “ultimate limitation periods” do not apply in cases of fraud and the court has broad discretion to extend the limitation period where fraud has occurred.


6.1        What remedies are available e.g. monetary compensation, injunctive/declaratory relief?

The statutory, common law, and equitable remedies that may be available in product liability actions include:

(1)   monetary damages;

(2)   disgorgement of revenue and/or profit (for unjust enrichment or waiver of tort);

(3)   rescission of the contract of purchase and sale;

(4)   monetary fines;

(5)   injunctions;

(6)   criminal sentencing;

(7)   punitive damages; and

(8)   interest and costs of the proceeding.

6.2        What types of damage are recoverable e.g. damage to the product itself, bodily injury, mental damage, damage to property?

Damages are recoverable for personal and property damage and for both cost and loss of use of the product when reasonably foreseeable as a result of the wrongdoing.  This includes non-pecuniary damages (for pain and suffering) and pecuniary damages (loss of income, of earning potential, business profits, dependency claims for the loss of care and companionship, out-of-pocket expense, etc.). Non-pecuniary damages are based on an annually adjusted, inflation-based amount, and as of February, 2015 the cap was approximately $357,000.  Damages for “nervous shock” or mental distress may be claimed for physical harm and/or recognisable psychiatric harm.

6.3        Can damages be recovered in respect of the cost of medical monitoring (e.g. covering the cost of investigations or tests) in circumstances where the product has not yet malfunctioned and caused injury, but it may do so in future?

Where a product is found to increase the risk of causing injury, some class actions have certified medical monitoring as common issues for adjudication.  Also, an award for medical monitoring has been ordered as part of a court-approved settlement of a product liability claim on consent of the parties.  The issue of entitlement to medical monitoring damages is, however, unsettled.  To date, there have been no reported decisions where a court has determined a plaintiff’s entitlement to funds for medical monitoring after a contested trial.  Canada’s healthcare system is fully state funded and beyond statutorily allowable subrogation claims, the courts have been reluctant to order an anticipated amount for monitoring that is already available through the publicly funded healthcare system.

6.4        Are punitive damages recoverable? If so, are there any restrictions?

Punitive damages may be recovered in rare cases where the conduct of the defendant was so egregious as to “shock the conscience” of the court.  Punitive damages, in addition to being rarely ordered, are usually for small amounts, typically being well less than $100,000.  The highest award of punitive damages in Canadian jurisprudence is a $4.5 million award ordered in 2013 where the court was particularly incensed by the defendant insurers’ intentional bad faith conduct toward a vulnerable insured.  Prior to that, the highest award had been $1.0 million.  The 2013 decision is likely an outlier rather than a harbinger of escalation in punitive damages.  There is no legislation governing awards of punitive damages; all authority with respect to such damages arises out of jurisprudence.

6.5        Is there a maximum limit on the damages recoverable from one manufacturer e.g. for a series of claims arising from one incident or accident?

Subject to the exception of non-pecuniary damages, described in question 6.2 above, there are no limits on damages recoverable for a series of claims arising out of a single incident.

6.6        Do special rules apply to the settlement of claims/proceedings e.g. is court approval required for the settlement of group/class actions, or claims by infants, or otherwise?

Court approval is required with respect to all settlements involving:

(1)        class actions; or

(2)        so-called “persons under a disability”, which include infant minors and persons who are otherwise legally incapable of managing their own affairs.

6.7        Can Government authorities concerned with health and social security matters claim from any damages awarded or settlements paid to the Claimant without admission of liability reimbursement of treatment costs, unemployment benefits or other costs paid by the authorities to the Claimant in respect of the injury allegedly caused by the product. If so, who has responsibility for the repayment of such sums?

Provincial governments are generally responsible for the payment of healthcare costs, and have statutory subrogated rights with respect to the recovery of past and future costs when paid to an injured party by a tortfeasor.  An injured party is under an obligation to protect the government health insurer when starting a claim and no settlement is binding on the government health insurer unless approved by it.  Where a full and final release has not been given to a defendant, it would also be open to the government to pursue a claim against the defendant for recovery of those medical costs; however, such a proceeding would be extraordinary.

Subrogation rights also arise in workers’ compensation schemes where benefits are paid to the workers.  The rights to recover such payments are transferred to the government agency by statute.

Costs / Funding

7.1        Can the successful party recover: (a) court fees or other incidental expenses; (b) their own legal costs of bringing the proceedings, from the losing party?

Generally speaking, a successful party is entitled to an award of costs in respect of the expenses incurred in prosecuting or defending a proceeding.  Recoverable expenses include all court filing fees, legal fees and disbursements.  Awards of costs are discretionary, and the typical recovery for a successful litigant is in the range of 30% to 50% of the expenses incurred, although depending upon the conduct of the litigation, that percentage amount may be higher or lower to reflect the court’s approval (or disapproval) of the steps taken by the party in the litigation.  See comments below regarding new developments in costs awards in class proceedings.

7.2        Is public funding e.g. legal aid, available?

Public funding is available; however, the system of public legal aid in Canada is generally regarded as being seriously underfunded.  It is extremely rare for a litigant to obtain legal aid funding to prosecute a civil claim, except in the case of class actions.

Funding has been established for the prosecution of class proceedings in exchange for a share in any proceeds of the litigation.  For example, the Class Proceedings Committee and the Class Proceedings Fund were established in Ontario to provide financial support to class action plaintiffs for disbursements, although the Fund typically agrees to indemnify any costs ordered against a representative plaintiff.

7.3        If so, are there any restrictions on the availability of public funding?

As stated above, there is a practical limitation on the availability of public funding due to the recognised underfunding in the legal aid system.

7.4        Is funding allowed through conditional or contingency fees and, if so, on what conditions?

Contingency fees are acceptable.  It has become normal practice for product liability class actions to be prosecuted by counsel working on a contingency fee basis for a percentage of the amount recovered in the action.  Such arrangements are significantly less common outside of the class action context.  Contingency fee arrangements in class proceedings are required to be in writing, and no such agreement is enforceable without court review and approval and, where appropriate, upon modification to the agreement with counsel.  The approval process for contingency fees, with minor modifications, also applies to such agreements in individual actions.

7.5        Is third party funding of claims permitted and, if so, on what basis may funding be provided?

Third party funding of claims was prohibited in Canada until recently, pursuant to the doctrines of champerty and maintenance.  However, recent decisions in the context of class actions have approved third party funding arrangements and called into question the continuing viability of these doctrines. 

The courts have identified the following principles to consider in approving a third party funding arrangement in a class action:

  • The arrangement must be promptly disclosed, court-approved and transparent.
  • The arrangement must not compromise or impair the lawyer and client relationship.
  • The arrangement must not diminish the representative plaintiff’s ability to instruct and control the litigation.
  • The court must be satisfied that the representative plaintiff will not become indifferent in giving instructions to class counsel in the best interests of class members due to the fact that the representative plaintiff will be insulated from adverse cost consequences.
  • The court must be satisfied that the arrangement is necessary to provide the class members access to justice.
  • The court must be satisfied that the arrangement is fair and reasonable to the class and does not over compensate the third party funder for assuming the risks. 
  • The third party funder must agree to be bound by the deemed undertaking rule, which means that the third party funder must not use any confidential or privileged information from specific litigation for any purpose other than that specific litigation.
  • The third party funding arrangement may require the third party funder to pay into court security for costs for the defendant’s costs.

7.6       In advance of the case proceeding to trial, does the Court exercise any control over the costs to be incurred by the parties so that they are proportionate to the value of the claim?

The proportionality of the costs incurred to the amounts in issue is one of the principles considered by courts in evaluating awards of costs.  Throughout a proceeding, courts typically award costs of each particular court attendance to the successful party as part of that court’s ruling on the matter in issue.


8.1        Please provide, in no more than 300 words, a summary of any new cases, trends and developments in Product Liability Law in your jurisdiction.

On July 8, 2015, Health Canada released important guidance regarding their views of the obligation of consumer product companies, including retailers, to report health or safety incidents involving one of its consumer products.  The guide states that reportable events include:

  • threats to breathing such as choking, strangling, suffocation, asphyxiation, aspiration, or other respiratory problems;
  • external physical harm, such as a serious burn or cut;
  • internal harm, such as internal bleeding, injury to an organ and broken bones;
  • poisoning;
  • allergic reactions (including anaphylaxis);
  • loss of consciousness;
  • convulsions; and
  • loss of sight or hearing.

Importantly, the guide makes clear a potential reporter is obligated to report incidents as soon they believe one may have occurred, on a precautionary basis.  A reporter need not be certain of the scope or details of the incident.

A recent appeal decision in a proposed product liability class action appears to continue the trend of courts taking a more rigorous approach to analysing the viability of such actions at early stages in the proceedings, which is to the benefit of defendants.  In Charlton v. Abbott Laboratories, Ltd.. the British Columbia Court of Appeal overturned certification of a class proceeding related to weight-loss drugs on the basis that the plaintiff had failed to establish “some basis in fact” that there existed a methodology to resolve the issue of causation on a class-wide basis.


The authors wish to thank their colleague, Rachel McMillan, for her kind assistance in the drafting of this chapter.