Canadian Courts Tighten Class Action Rules in Critical Q2 2025 Decisions
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The second quarter of 2025 saw several significant developments in Canadian class action jurisprudence, with courts across multiple provinces delivering important rulings that clarify key legal principles in product liability, employment, jurisdiction, certification amendments, misleading advertising and privacy law.
These decisions, from the Ontario Court of Appeal and superior courts in Ontario and British Columbia, highlight ongoing judicial scrutiny regarding the scope of recoverable damages, criteria for class certification, jurisdictional boundaries in cross-border disputes and the standards for pleadings in complex class actions.
Please see our summaries of key class action developments below.
- North v. Bayerische Motoren Werke AG, 2025 ONCA 340: The Ontario Court of Appeal overturned the certification order in a product liability case affirming that recovery for pure economic loss in a tort action is narrowly restricted and that a product’s components cannot be advantageously separated to support an allegation that “other property” was damaged allowing recovery.
- Davis v. Amazon Canada Fulfillment Services, 2025 ONCA 421: The Ontario Court of Appeal affirmed the dismissal of an employment class action confirming that operational similarity is insufficient to satisfy the common employer doctrine and ground a class proceeding.
- Shirodkar v. Coinbase Global Inc., 2025 ONCA 298: The Ontario Court of Appeal dismissed the appeal of a motion to dismiss and stay a cryptocurrency class action affirming that access to a foreign trading platform in Ontario is insufficient for the court to assume jurisdiction where trading takes place outside of Ontario.
- Wellman v. Telus Communications Co., 2025 ONSC 3257: The court confirmed that a certification order can only be amended where truly new or transformative issues of fact or law have arisen since certification.
- Siwocha v. Recochem Inc., 2025 BCSC 679: The court held in this misleading advertising class action that the pleading alleging fraudulent misrepresentation did not disclose a cause of action where it was alleged the defendant had priced the same product differently using different brand names, and there was no allegation in the pleading that the representations made were arguably false.
- Lam v. Flo Health Inc., 2025 BCSC 993: The court certified claims for breach of contract and breach of the duty of good faith and honest performance in a privacy class action following the plaintiff’s filing of an amended pleading.
North v. Bayerische Motoren Werke AG, 2025 ONCA 340
In North v. Bayerische Motoren Werke AG, 2025 ONCA 340 (“North”), the Ontario Court of Appeal declined to certify a class action highlighting the distinction between a “pure economic loss” and a traditional “negligence” claim.
In North, certification of a class action was sought against the defendants alleging negligent design and manufacture of the timing chain assembly system in BMW vehicles resulted in damage to the engine, together with a failure by BMW to warn customers about the safety risks associated with the class vehicles. The plaintiffs allege that several years after acquiring their BMWs, their vehicles suddenly lost power as a result of the failure of their vehicle’s timing chain assembly system, resulting in catastrophic damage to the vehicle’s engine. The plaintiffs sold their vehicles “as is” instead of repairing them, given the high repair costs quoted to them. The certification judge declined to certify the duty to warn claim and certified the causes of action of negligent design/manufacturing claim limited to losses reflected in the costs of repair to the engine.
The plaintiffs challenged the certification judge’s decision. BMW cross-appealed, asserting that the class action should be narrowed further or dismissed entirely.
The court dismissed the appeal and allowed the cross-appeal denying certification and holding that the certification judge erred in (a) certifying causes of action in negligent design/negligent manufacturing that resulted in a loss reflected in the cost of repairing damage incurred to an engine; and (b) defining the class to include persons who incurred such costs.
The court affirmed that there is no right in tort to be protected from negligent or intentional infliction of pure economic loss and that recovery for pure economic loss in tort is the exception and not the rule. While there is no liability for negligence “in the air,” a plaintiff may be entitled to damages where a design or construction defect poses a real and substantial danger of personal injury or damage to “other property” caused by a design defect.
The plaintiffs had sought to fit within this narrow exception to the rule that pure economic loss is not recoverable by relying upon the “complex structure theory” and arguing that where a complex structure exists (in this case, a vehicle), damage to one part (the engine) caused by a defect in another part (the timing chain system) resulted in property damage to “other property.”
The Court of Appeal upheld the certification judge’s conclusion that it was evident that neither the vehicle nor the engine were “other property.” While the court agreed with the certification judge that the appellants had not asserted a traditional negligence claim, but a claim of pure economic loss, it found that the certification judge had erred in certifying claims resulting in a loss reflected in the costs of repairing damages to the disputed vehicle’s engine. Where the appellants had pleaded that “once the Chain Assembly System fails, the engine is catastrophically damaged” and cannot be driven, the court found that repairing the engine was not necessary to avert real and substantial danger but was a repair to restore usage or functionality itself, a loss which is not recoverable in tort (but is instead a loss that should be addressed by parties via contract).
With respect to the duty to warn, the court upheld the certification judge’s finding that the plaintiffs had failed to plead a viable cause of action, as they had not pleaded that, had they been warned, they would have averted actual physical harm or property damage. Instead, they had alleged they would not have bought the defective vehicle, which was a claim of pure economic loss and not recoverable.
Finally, the court concluded that the certification judge had erred in concluding that the plaintiff had a cause of action and therefore was a suitable representative plaintiff, as they had not incurred costs to avert a real and substantial danger and therefore did not possess a recoverable loss. The absence of a suitable representative plaintiff was deemed fatal to certification.
The Court of Appeal’s decision confirms the limited scope and viability of product liability claims for pure economic loss in Ontario and the limited exposure manufacturers face in negligence for defects in a product. The ruling confirms that a product’s components cannot be advantageously separated to allow a claim for damage to “other property” to succeed.
Davis v. Amazon Canada Fulfillment Services, 2025 ONCA 421
In Davis v. Amazon Canada Fulfillment Services, 2025 ONCA 421 (“Davis”), the Ontario Court of Appeal affirmed the motion judge’s decision to deny certification.
In Davis, the plaintiff brought a class action on behalf of 73,000 delivery drivers in Canada, including both Delivery Partners (“DPs”) and Driver Associates (“DAs”). As a former DA, the plaintiff argued that Amazon was a “common employer” with 126 third-party Delivery Service Providers (“DSPs”) and misclassified drivers to avoid statutory obligations under employment law. The motion judge concluded that Amazon was not a common employer for class members and stayed the claims of the drivers bound by arbitration agreements, dismissing certification for the rest of the class.
A key issue in the certification motion was whether Amazon was a “common employer,” together with the DSPs, who owed duties as an employer to the class.
The motion judge applied the two-pronged test from O’Reilly v. IMAX Corp. to determine if multiple entities could be considered a common employer. The test requires the moving party to establish that: (a) there is a sufficient interrelationship and/or common control between the alleged common employers; and (b) the employee reasonably expects each employer to be part of the employment arrangement governing the employee.
The motion judge concluded that the test was not met because (a) Amazon and the DSPs were not carrying on business together; instead, Amazon was a client of the DSPs; and (b) Amazon was not a common employer for the DA group within the class, and the employment contracts between the DSPs and drivers expressly excluded Amazon as the employer. The court held that the motion judge’s conclusion on the common employer doctrine was rooted in the pleadings and entitled to deference.
The court also held that the motion judge’s conclusion that there were no common issues was entitled to deference, particularly the conclusion that the DSPs’ use of the Amazon Flex App did not create a common issue among the class members because its use was not uniform across the 57,000 drivers and varied based upon instructions from specific DSPs regarding usage, management, monitoring and administration of the app.
The court held that the motion judge’s conclusion on preferability, that the proposed class action was not preferable but was an attempt to join 126 discrete proposed class actions, was unassailable.
Davis demonstrates that without evidence of a shared employment relationship or contractual unity, operational similarity alone is insufficient to satisfy the common employer doctrine and ground a class proceeding.
Shirodkar v. Coinbase Global Inc., 2025 ONCA 298
In Shirodkar v. Coinbase Global Inc., 2025 ONCA 298 (“Shirodkar”), the Ontario Court of Appeal dismissed the appeal and affirmed the lower court’s decision that the choice of forum clause in Coinbase Canada’s user agreement did not retroactively confer on Ontario courts’ jurisdiction over the appellant’s claims against non-Canadian respondents. The court affirmed the motion judge’s analysis of both jurisdiction simpliciter based upon the principles set out in Club Resorts Ltd. v. Van Breda, 2012 SCC 17, and her decision to stay the action based on forum non conveniens.
In Shirodkar, the plaintiff sought to initiate a class action against Coinbase Global and its subsidiaries. He claimed that Coinbase’s failure to meet mandatory disclosure and registration requirements was a violation of Ontario's Securities Act and other provincial securities statutes. The plaintiff proposed to certify the class for all Canadians who entered into crypto contracts or transacted in tokens with Coinbase between October 8, 2019, and the certification date.
After the respondents moved to dismiss or stay the action on jurisdictional grounds, the appellant executed an updated version of the Coinbase user agreement (the “Canadian Agreement”) specific to Canadian users, which included a non-exclusive choice of forum clause in favour of the Ontario courts and a choice of law provision in favour of the laws of Ontario.
The motion judge nonetheless granted the respondents’ motion, finding that the Superior Court of Justice in Ontario has no jurisdiction over the claims asserted against the non-Canadian respondents and that the action against them should be dismissed. Although the court confirmed it had jurisdiction over Coinbase Canada, it found that Ireland was the preferable forum for the adjudication of the appellant’s claims. The motion judge accordingly stayed the remaining action against Coinbase Canada.
i. Interpretation of the Canadian Agreement
On appeal, the court upheld the motion judge’s decision and rejected the appellant’s argument that the Canadian Agreement conferred jurisdiction over all Coinbase entities, including non-Canadian entities. While the motion judge found that the Canadian Agreement applied retroactively, she found that it did not apply to prior disputes that a Canadian user might have against another Coinbase company.
ii. Ontario does not have jurisdiction
The court affirmed that the motion judge did not err in her application of the “real and substantial connection” test from Van Breda and her conclusion that the court only had jurisdiction over Coinbase Canada. The test requires the court to review factors that connect the subject matter of the litigation to the forum. Once these factors are established, they create a presumption of jurisdiction, which the defendant must rebut.
The appellant relied on two presumptive connecting factors: (1) the respondent carried on business in Ontario, and (2) the respondents had committed a statutory tort in Ontario by failing to comply with s. 71(1) of the Securities Act. In response, the motion judge found that none of the non-Canadian Coinbase companies carried on business in Ontario and that the only presumptive factor connecting the alleged tort to Ontario was that the appellant had accessed the Coinbase platform from Ontario as trades, contracts, servers and operations had all taken place outside Ontario. The motion judge found that damages in Ontario alone did not form a presumptive factor and that the non-Canadian respondents’ limited registration with Canadian securities regulators did not amount to consent to private litigation in Ontario courts. The court affirmed the motion judge’s conclusion that to assume jurisdiction the court had to find an unrebutted presumptive connecting factor linking each defendant who opposed the claim proceeding in Ontario, which did not exist based upon the evidence.
iii. Ontario is not the convenient forum
The court affirmed the discretionary decision of the motion judge that Ireland was the preferable forum and that a stay of the action against Coinbase Canada, the sole respondent over which the court had jurisdiction, was appropriate. While the appellant argued that a claim under the Securities Act would be better adjudicated by an Ontario court, the court confirmed that a plaintiff cannot compel an Ontario court to accept jurisdiction over a claim simply by alleging an Ontario statute, as this would encourage forum shopping. Moreover, as a matter of comity, securities litigation should take place in the forum where the transaction unfolded; in this case, the appellant’s trades were completed through Coinbase Europe with none of the activities associated with trading taking place in Canada, except for sometimes accessing the platform through the appellant’s home computer in Ontario. Finally, despite the absence of a class action regime in Ireland, the court affirmed the motion judge’s conclusion that the courts of Ireland were well-positioned to adjudicate the appellant’s claims and that that a perceived loss of juridical advantage was outweighed by the importance of comity in the forum non conveniens analysis.
Shirodkar provides a fulsome overview of the analysis to be completed when assessing jurisdiction and forum non conveniens, and clarifies that accessing a foreign trading platform within Canada is not sufficient for jurisdiction to be asserted over foreign defendants, including with respect to an alleged breach of the Securities Act.
Wellman v. Telus Communications Co., 2025 ONSC 3257
In Wellman v. Telus Communications Co., 2025 ONSC 3257 (“Wellman”), the Ontario Superior Court of Justice denied the motion by TELUS to amend a certification order. The decision highlights that class definitions should remain intact unless significant facts or changes in circumstances arise.
In Wellman, a class action alleging systematic overbilling of mobile phone subscribers was certified in 2014. The certification decision was appealed on a number of grounds through two separate procedural routes, one of which challenged the certification judge’s refusal to stay the proceeding against business subscribers in view of an arbitration clause contained in their contracts. That appeal culminated in the Supreme Court of Canada’s decision in 2019 to stay the claims of TELUS’ business subscribers.
The current motion pertains to TELUS’ allegation that individual/consumer subscribers of TELUS who remain class members in the certified class proceeding cannot be completely distinguished from business subscribers whose claims have been stayed. TELUS sought to amend the certification order to provide that the question of whether a class member’s use of their phone meets the definition of “consumer” is an individual issue and/or to amend the certification order to decertify aggregate damages as a common issue.
In dismissing TELUS’ motion, the court reiterated that certification is not a “fluid and flexible” step, but a complex and resource-intensive procedure in which parties are expected to present their full case up front. The court further clarified that certification orders can only be amended if there has been a new or transformative factual or legal development or, with respect to a certified common issue, where the conditions for certifying that common issue no longer exist.
Siwocha v. Recochem Inc., 2025 BCSC 679
In Siwocha v. Recochem Inc., 2025 BCSC 679 (“Siwocha”), the Supreme Court of British Columbia declined to certify the class action proceeding, concluding that the pleading did not disclose a cause of action.
The plaintiff, Siwocha, brought a proposed national class action against Recochem Inc., claiming that Recochem marketed the same product under different brand names and at different price points, citing distinct qualities of the product in the various marketing representations made. The plaintiff alleged that, inter alia, Recochem engaged in deceptive marketing, made false representations to consumers and breached the Consumer Protection Act, S.B.C. 2004, c. 2, together with similar legislation in other provinces, and the Competition Act R.S.C. 1985, c. C-34.
The court declined to certify the action based upon s. 4(1)(a) of the Class Proceedings Act RSBC 1996 c. 50, holding that the pleading did not disclose a cause of action.
Fraudulent misrepresentation claim: The court held that there did not appear to be any representation made by the plaintiff that was fundamentally, or even arguably, false. The court considered the language used on the various products marketed by the defendant, noting that while the actual chemical makeup of all impugned products was identical, none of the marketing statements emphasizing different contents or attributes of the product were alleged to be inherently false. While the plaintiff alleged in argument that the representations included false superiority claims, the court reiterated that the representations pleaded did not support this conclusion.
Various provincial Consumer Protections Act claims: The court held that the plaintiff’s failure to particularize its claim created an unfair burden on the court, and there was insufficient detail in the claim regarding the various provincial consumer protection statutes pleaded to establish a cause of action.
Competition Act claims: The court denied the existence of a reasonable cause of action pursuant to the Competition Act, noting that the act does not impose a general duty of disclosure or positive obligation on the defendant to highlight similarities or commonalities among its marketed products.
Siwocha serves as a reminder that, while legislation pertaining to marketing is increasingly stringent, some latitude remains such that marketing different attributes of the same product in a manner that is not comparative cannot ground a class proceeding for fraudulent misrepresentation absent those representations being arguably false. Moreover, when asserting claims under consumer protection legislation, particulars must be specifically pleaded.
Lam v. Flo Health Inc., 2025 BCSC 993
In Lam v. Flo Health Inc., 2025 BCSC 993 (“Lam”), the Supreme Court of British Columbia certified the plaintiff’s claims for breach of contract and breach of duty of good faith and honest performance, following service by the plaintiff of a further fresh as amended notice of civil claim.
In Lam, the plaintiff alleges that Flo violated the privacy of users of the app by intentionally disseminating highly sensitive personal information pertaining to the tracking of reproductive cycles that users of the app entrusted to Flo. Flo argued its privacy policy allowed such disclosures under certain conditions and that the data shared was anonymized.
The class action was certified in 2024, in part. The court concluded the cause of action for breach of contract, as pleaded, did not disclose a cause of action but ordered leave to the plaintiff to further amend their pleading for that specific claim. The plaintiff filed an amended claim and sought an order certifying the causes of action pleaded.
i. Breach of contract
The plaintiff’s contractual theories – the breach of express term, breach of implied term and breach due to lack of meaningful consent – were found to be sufficiently pleaded. The court held that: (a) whether Flo’s disclosures breached the contract is a matter for trial, not certification; (b) the plaintiff properly pleaded facts supporting an implied term – particularly the reasonable expectation that private data would not be shared; and (c) the plaintiff’s novel formulation of her breach of contract claim with reference to PIPEDA was not bound to fail. Distinct from Donegani v. Facebook, 2024 ONSC 7153, the plaintiff did not plead that PIPEDA formed an express or implied term of the contract, such that the breach of contract claim included a breach of PIPEDA. Instead, the plaintiff took the novel approach of asserting that PIPEDA, as mandatory legislation, governs whether Flo actually obtained proper consent to its data-sharing practices or whether its sharing of personal data was made without consent, as it was non-compliant with PIPEDA.
ii. Breach of the duty of good faith and honest performance
The plaintiff sought to amend its claim to include breach of the duty of good faith. The court found that the material facts underlying the breach of contract claim may be sufficient to support the causes of action of breach of the duty of good faith and honest performance, as the plaintiff alleged that Flo not only failed to protect users’ privacy but also misled class members about how it intended to use their personal information.
iii. Disgorgement of profits
In the amended pleading, the plaintiff seeks two remedies for breach of contract by Flo Health Inc.: (1) nominal damages for class members who may not have suffered quantifiable financial loss; and (2) disgorgement of profits allegedly earned by Flo through improper sharing of personal information. The court held that, to the extent class members establish a breach of contract at trial but do not establish loss giving rise to compensatory damages, they may be eligible for nominal damages. While acknowledging that disgorgement for breach of contract is an exceptional remedy, the court held that the allegations that Flo grew its business through use of class members’ personal information, which was shared with third parties for targeted advertising, commercial exploitation and external analytics was sufficient to properly plead a claim for disgorgement.
This privacy class action is unique as it is not a data-hacking or a data-stripping case but involves the intentional dissemination of users’ personal information. It serves as a reminder to businesses of the importance of obtaining meaningful consent, in accordance with PIPEDA, and maintaining clear privacy policies when sharing information with third parties.
The Class Actions Group at Aird & Berlis LLP has broad class action defence experience in securities law, financial services, mining, oil and gas, consumer products, product liability, pharmaceutical, natural health products, telecommunications, condominiums, competition, copyright, privacy and insurance defence. For more information on how we can assist, please contact the authors or a member of our team.
