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Developments in Class Action Law: Highlights From Q4 2025

By: Sara Romeih and Kate Findlay

To listen to an audio recording of this article, click here.

The final quarter of 2025 marked significant developments in Canadian class action law, with courts refining the boundaries of certification and leave across securities, consumer protection and privacy class actions. Recent decisions reflect a balanced approach: courts continue to advance class proceedings supported by coherent legal theories and admissible evidence, while enforcing firm constraints on speculative claims, procedural re-litigation and disproportionate results.

Key decisions from the Supreme Court of Canada, Ontario and British Columbia include:

Reconsidering the Scope of ‘Material Change’ Under Securities Legislation

The Supreme Court of Canada’s decision in Lundin Mining Corp. v. Markowich, 2025 SCC 39, reshapes the law governing secondary-market disclosure claims, providing clarification of the distinction between a “material fact” and “material change” under the Ontario Securities Act, and affirms the test for leave to commence secondary-market misrepresentation claims.

The Supreme Court majority rejected existing narrow interpretations of “material change” under securities legislation that constrain such claims at the leave stage and instead adopted a flexible and broad approach to the interpretation of “material change.” In particular, while acknowledging that there is no “bright line” test, the Supreme Court held that a “material change” must be comprised of:

  1. a “change” in any one of the company’s “business, operations or capital” based upon a qualitative assessment of the nature of the change; and
  2. a change that is “material” from the perspective of a “reasonable investor” and is expected to have a significant effect on the market price or the value of the issuer’s securities.

With respect to the leave test, the Supreme Court held that an investor may obtain leave to pursue a statutory secondary-market claim where the pleadings disclose a plausible application of the Ontario Securities Act (or comparable provincial legislation) and the record contains some credible evidence that an internal development may amount to a material change.

The case arose from operational issues at Lundin’s flagship Candelaria mine: pit wall instability was detected, a localized rockslide followed within days, and the company later revised production forecasts downward. Lundin did not disclose the instability or rockslide immediately; instead, it disclosed them roughly a month later in the course of a scheduled operational update. The market reaction was sharp, with a significant one-day share price decline. Leave was sought to commence a statutory secondary-market claim and to certify a proposed class proceeding alleging that the instability and rockslide constituted “material changes” requiring disclosure “forthwith” under Ontario’s Securities Act. The Supreme Court affirmed the Ontario Court of Appeal and overturned the motion judge’s refusal to grant leave.

The Supreme Court majority emphasized that securities legislation deliberately leaves the terms “change,” “business,” “operations” and “capital” undefined. Legislatures chose that structure to preserve flexibility and to allow courts to assess disclosure obligations contextually based upon a fact-specific analysis: whether, in the circumstances, the development altered the issuer’s business or operations in a way that can properly be characterized as a change, with the separate “materiality” component addressing whether that change could reasonably be expected to have a significant market impact. The Supreme Court confirmed that events external to a company, such as political or economic developments, will only trigger a material change if they result in an internal change to a company’s business, operations or capital.

Lundin reaffirmed that leave under s. 138.8(1) of the Securities Act is a preliminary merits assessment designed to deter opportunistic litigation, but not to require plaintiffs to prove their case before discovery. The plaintiff must show good faith and a “reasonable possibility” of success at trial to succeed. The Supreme Court held that statutory interpretation is not less stringent at the leave stage and that the plaintiff must demonstrate a plausible application of relevant statutory provisions to the facts based upon the limited evidentiary record available at the leave stage. The leave threshold is more stringent than for class action certification but requires only a reasonable or realistic chance of success and not proof of success.

Here, the uncontested evidence that the events affected mine phasing and guidance supported a realistic possibility of a change in operations, and no one seriously contested that the market impact component could be met. That combination was sufficient to cross the leave threshold.

The Supreme Court’s endorsement of a broader interpretation of “material change” expands the circumstances in which timely disclosure will be required to be made to investors. Following Lundin, disclosure decisions will require ongoing diligence as well as prompt decision-making and may result in companies and boards making early disclosure in a broader variety of circumstances. In making such disclosures, issuers and directors should exercise caution to avoid unintentionally providing disclosure that is incomplete or misleading.

Click here for further analysis of this decision and the meaning of a “material change,” provided by our Capital Markets Group.

Can Market Reaction Alone Establish Materiality?

The Ontario Superior Court of Justice says yes. Although Dziedziejko v. Canopy Growth, 2025 ONSC 6766, does not expressly cite Lundin, it offers a further pragmatic illustration of how courts consider a sharp and immediate market decline to be a significant factor in favour of the materiality component of the s. 138.3 leave test being fulfilled. Justice Morgan granted leave under s. 138.8 of the Securities Act and certified a proposed class action alleging secondary-market misrepresentations and oppression.

The plaintiff alleged that Canopy made misrepresentations concerning its financial reporting, disclosure controls and corporate governance practices. Canopy later issued corrective disclosures admitting material misstatements and ineffective internal controls, which were followed by sharp and immediate share-price declines on both the TSX and NASDAQ.

A key takeaway from the decision is how the court approached materiality at the leave stage. Justice Morgan held that expert disputes over accounting methodology were unnecessary at the leave stage and risked converting the motion into a mini-trial. Consistent with the Supreme Court of Canada’s analysis in Kerr v. Danier Leather Inc., 2007 SCC 44, where corrective disclosure is followed by a significant and immediate market reaction, materiality may be inferred from objective market data alone. In such circumstances, “the market speaks louder than the experts.”[1] Conflicting expert opinions confirm that there is a live issue for trial, not that the claim lacks a reasonable prospect of success.

The court also certified the oppression remedy claim, holding that shareholder expectations grounded in public disclosures, governance frameworks and statutory obligations are capable of objective, class-wide assessment. The proposed class definition, common issues and litigation plan were all approved. The court rejected arguments that oppression claims are inherently individualized, confirming that where expectations arise from uniform public statements and corporate practices, they can be resolved on a class basis.

Certification Upheld for Consumer Protection Claims Based on Fee Disclosure

In Robson v. Federal Express Canada Corporation, 2025 ONCA 831, the Court of Appeal for Ontario upheld certification of a proposed class action alleging misleading fee disclosure under Ontario’s Consumer Protection Act (“CPA”).

The proposed class action arose from the cross-border shipping practices of Federal Express Canada Corporation (“FedEx”). The plaintiff alleges that FedEx invoiced consumers for “Advancement Fees” and “Clearance Entry Fees” in a manner that represented that these charges were government-imposed duties or taxes, when in fact they were internally retained brokerage fees. The claim pleads breaches of ss. 13 (unsolicited services) and 14-15 (unfair practices) of the CPA, as well as unjust enrichment.

On the cause of action analysis, the court emphasized the limited scope of s. 5(1)(a) of the Class Proceedings Act, holding that when the pleaded facts are accepted as true, it was not “plain and obvious” that the CPA could not apply. The court rejected FedEx’s attempt to defeat the claim by relying on contractual and choice-of-law arguments, affirming that such arguments were better characterized as potential defences, rather than grounds for striking the claim at certification. The court declined to follow Quebec authorities, citing material differences between Ontario’s CPA and Quebec consumer protection legislation. Finally, the court treated as a persuasive authority the Ontario certification decision of Wright v. United Parcel Service Canada Ltd., 2011 ONSC 5044, aff’d 2015 ONSC 2220 (Div. Ct.), 336 O.A.C. 21, leave to appeal to Ont. C.A. refused, M45175 (September 18, 2015), leave to appeal refused, [2015] S.C.C.A. No. 466, which involved materially similar allegations against United Parcel Service Canada Ltd. and other related companies concerning undisclosed brokerage fees under ss. 13, 14 and 15 of the CPA.

On commonality, the court upheld certification of common issues under ss. 13, 14 and 15 of the CPA. The court accepted that the claims were directed at FedEx’s standardized invoicing practices and uniform cross-border procedures. Individual variations in communications between consumers, vendors and FedEx did not defeat commonality. Notably, the court reaffirmed that consumer knowledge or reliance is not an element of CPA unfair practice claims, distinguishing Ontario law from British Columbia’s consumer protection legislation.

The court also upheld the class definition, rejecting the appellants’ arguments that it was overbroad because it extended beyond the basic limitation period and included Quebec residents. The court again held that while there may be successful defences to exclude Quebec residents or narrow the class definition based upon the limitation period, such defences were not appropriate to deal with at the certification based upon a limited evidentiary record.

Robson underscores the difficulty of defeating CPA-based claims at certification where the pleadings allege systemic misrepresentation grounded in uniform documentation, even in a cross-border commercial context. Moreover, the court emphasized that choice-of-law arguments and attempts to narrow a class definition based upon  limitation arguments are defences best dealt with at the evidentiary stage of a proceeding and not a bar to certification.

No Second Attempt After Certification

In a prior quarterly update, we reported on the Ontario Superior Court of Justice’s decision in David v. Loblaw, 2024 ONSC 5818, which held that the Class Proceedings Act does not permit plaintiffs to revisit an unsuccessful certification decision through amended pleadings or “new” evidence where there was no appeal. In David v. Loblaw Companies Limited, 2025 ONCA 830, the Ontario Court of Appeal has affirmed this decision.

The appeal arose from the long-running packaged bread price-fixing litigation. In 2021, the action was certified against several retailers and producers, including Canada Bread, but certification was refused against others, including Maple Leaf Foods Inc. (“MLF”). The certification judge found that MLF neither produced nor sold bread and that the claim impermissibly sought to attribute the alleged conduct of subsidiaries to parent companies without particularized allegations or a basis to disregard corporate separateness. The certification decision was not appealed.

Instead, two years later, the plaintiffs sought to undo that outcome. Relying on an amended pleading and evidence alleged to be “new,” the plaintiffs moved to amend the certification order to add MLF back as a certified defendant. The motion judge dismissed the request, holding that the original no cause of action ruling gave rise to res judicata and could not be revisited.

In a unanimous decision, the Ontario Court of Appeal confirmed that a refusal to certify a claim under s. 5(1)(a) of the Class Proceedings Act is a final determination of substantive rights. Once a court concludes certification is refused against a defendant on the basis that a pleading discloses no viable cause of action, that determination is final and has preclusive effect. Delivering a clear and consequential statement on finality at class certification, the Court of Appeal held that absent a successful appeal, the claim cannot be revived through amended pleadings, additional particulars or amendments to the certification order. The Court of Appeal rejected the suggestion that certification is a “fluid” or iterative process. While the Class Proceedings Act permits limited procedural amendments, those powers cannot be used to circumvent res judicata or reopen matters that have been finally decided.

The Court of Appeal also endorsed the motion judge’s treatment of the purported “new” evidence. Discretion not to apply res judicata is extremely narrow. Evidence that was available before certification, inadmissible or directed only at showing that allegations were responsibly pleaded did not meet the strict standard required to reopen a final determination. There was no unfairness in holding the plaintiffs to the consequences of an unappealed certification ruling.

David v. Loblaw confirms the principle highlighted in our earlier update: certification is not a dress rehearsal. For plaintiffs, it underscores the importance of pleading discipline and strategic decision-making at certification, including the need to appeal adverse rulings promptly. For defendants, David v. Loblaw reinforces the durability of early certification victories and the importance of pressing no-cause-of-action arguments where appropriate, particularly in complex, multi-defendant class proceedings.

Unworkable Class Definitions

In Donegani v. Facebook Inc., 2025 ONSC 6020, the Ontario Superior Court of Justice refused to certify a proposed privacy class action, finding that the plaintiffs failed to establish a workable class definition, certifiable common issues or an evidentiary foundation for compensable loss. The certification refusal followed an earlier ruling covered in our prior bulletin that had already narrowed the scope of the action, leaving only Ontario-based claims to be assessed on their merits.

The action alleged that Facebook made users’ data available to certain third parties, including applications, device integrations and messaging partnerships, without user consent. After an earlier certification decision narrowed the claims and required a revised class definition, the plaintiffs proposed a class limited to Canadian Facebook users who were friends with an installing user of one of nine identified third-party programs.

Although narrower than the plaintiffs’ earlier proposal, the court held that the revised class definition remained fundamentally unworkable. The court emphasized that certification could not proceed where identifying class membership depended on individualized inquiries into historical relationships, timing and data mining, rather than objective criteria. Here, class membership could not be determined from the definition itself but depended on the creation of a post-certification “Master Class List” drawn from Facebook’s historical records. The court found that this approach improperly divorced the class definition from class membership and relied on data that was incomplete, time-limited and in some cases no longer available. The proposed class was both under-inclusive and overbroad in that individuals who may have had viable claims would be excluded where their relevant account or friendship data no longer existed, while others whose data could not have been shared during the relevant period would nonetheless be captured by the definition and bound by the proceeding. The court emphasized that a class definition that can only be refined through individualized inquiries, and that risks binding persons who should not be bound while excluding those who should be included, does not satisfy the identifiable class requirement under the Class Proceedings Act.

The court also held that the action failed the preferable procedure requirement. The plaintiffs acknowledged there was no evidence of pecuniary loss, and the record disclosed no compensable harm. Relying on Atlantic Lottery Corp. Inc. v. Babstock, the court rejected certification where the action sought nominal damages untethered from meaningful compensatory relief, particularly where regulatory proceedings were already addressing the impugned conduct.

Donegani stands for the proposition that a class proceeding is not the preferable procedure where there is no evidence of compensatory damages and emphasizes the importance of the plaintiff establishing a workable class definition to be successful on certification.

No Privacy Claim Without a Reasonable Expectation of Privacy

In RateMDs Inc. v. Bleuler, 2025 BCCA 329, the British Columbia Court of Appeal overturned the certification of a proposed privacy class action, finding that the plaintiff’s novel claims that the defendants’ use of health professionals’ names violated their privacy and amounted to commercial exploitation under provincial privacy statutes were bound to fail. The court dismissed the action in its entirety and held that the pleading had no reasonable prospect of success.

This proposed class action challenged the operation of RateMDs.com, a website that publishes profiles of health professionals containing their names, business contact information, patient reviews and comparative rankings. The plaintiff alleged that the defendants’ creation and monetization of these profiles violated statutory privacy rights and constituted an unauthorized commercial use of health professionals’ names under sections 1 and 3(2) of British Columbia’s Privacy Act and analogous provincial legislation. The Court of Appeal rejected both claims.

In applying the “plain and obvious” test under the Class Proceedings Act, the Court of Appeal held that the pleadings failed to establish a reasonable expectation of privacy, which is a necessary precondition to both alleged statutory torts.

The court rejected the plaintiff’s s. 1 privacy claim, which was premised on a broad assertion of control over personal information regardless of whether that information attracted a reasonable expectation of privacy. The court held that this approach inverted established privacy doctrine. Informational privacy, including any associated right of control, arises only where the information at issue is private in the first place. Health professionals who provide services to the public do not have a reasonable expectation of privacy in their professional identities, business contact details or the fact that patients may express opinions about their services. Objection to the aggregation, ranking or commercial presentation of such information does not transform public professional information into private information.

The court also rejected the plaintiff’s s. 3(2) claim for unauthorized use of name, confirming that this statutory tort targets the commercial exploitation of an individual’s identity for promotional purposes, not the use of a person’s name as the subject of informational content. Although RateMDs operated for profit, the health professionals’ names were used to convey information of public interest about professional services, not to suggest endorsement or to drive sales through the exploitation of personal identity.

Consistent with appellate guidance emphasizing the court’s gatekeeping role at certification, RateMDs emphasizes that novelty does not justify allowing claims to proceed where they are legally untenable.

When Courts Will Intervene in Contingency Fee Arrangements

Class counsel contingency-based fees serve to compensate litigation risk but are not immune to judicial oversight. In Nootchtai v. Nahwegahbow Corbiere Genoodmagejig Barristers and Solicitors, 2025 ONSC 6071, the Ontario Superior Court of Justice invalidated a $510-million contingency fee sought by counsel following the $10-billion Robinson Huron Treaty settlement, finding that the contingency fee was unreasonable under the Solicitors Act as it bore no reasonable relationship to the work performed or the result achieved.

The court recognized the exceptional quality of the legal work and the significance of the result; nonetheless, it held that a percentage‑based fee was inappropriate in a “mega‑fund” case where the lawyers assumed minimal financial risk and the clients bore the bulk of costs. The court also identified conflicts of interest in the lawyers’ involvement in negotiating and approving their own fees. It replaced the contingency fee with a quantum meruit award of approximately $40 million, reflecting double the lawyers’ billable time as a proportionate and reasonable valuation of services.

By contrast, the Ontario Superior Court of Justice recently approved a $909-million contingency fee in Imperial Tobacco Company Limited, 2025 ONSC 4497, where such fee was found to be justified by decades of unrewarded, high-risk advocacy and full assumption of litigation risk in litigation of more than two decades culminating in a $32.5-billion resolution under the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36.

Whether the fee is fair and reasonable is assessed in light of the risk undertaken, the work performed and the result achieved. The court in Imperial Tobacco held that the case was unique and the endorsement should not have any precedential value; this proved to be the case in Nootchtai where no such principled basis was found to justify what the court held to be a claim for an unreasonable fee.

Rules of Evidence Apply at Certification

In Syngenta AG v. Van Wijngaarden, 2025 BCCA 334, the British Columbia Court of Appeal reaffirmed that certification is not a formality. Plaintiffs must establish “some basis in fact” for each certification criterion with admissible evidence. The certification process exists to ensure that the significant costs and burdens of class proceedings are only imposed where the statutory requirements are met.

The proposed class action alleged that exposure to paraquat, contained in a herbicide, increased the risk of Parkinson’s disease. To support certification, the plaintiffs relied on affidavits sworn by counsel appending thousands of pages of materials drawn from online sources, including foreign court filings, scientific studies, news articles and advertisements. Counsel lacked knowledge of the truth or authenticity of the documents and, in many instances, did not retrieve them.

The Court of Appeal held that this evidentiary approach was improper. Certification does not relax the ordinary rules of evidence. Evidence must be relevant, authenticated and not barred by hearsay rules, even at this preliminary stage. Hearsay remains presumptively inadmissible. Affidavits sworn on information and belief must identify a human source and confirm the affiant’s belief in the information’s truth. Double hearsay remains inadmissible. Documents tendered as party admissions must be authenticated by the party relying on them. Public availability does not make a document a “public record,” and documents tendered for a non-truth purpose must still be relevant. When defendants object, plaintiffs must explain why specific documents are admissible. Certification judges are not required to sift through or rehabilitate a deficient evidentiary record. The court also rejected the argument that the Class Proceedings Act shifts the burden of authentication to defendants. The court confirmed that each party is required to authenticate the documents they tender.

Despite finding the plaintiff’s hearsay evidence to be inadmissible, the Court of Appeal upheld certification of the negligence common issues on the basis of admissible evidence establishing some basis in fact.

In a useful analysis in the context of product liability claims, the Court of Appeal held that the certification judge had erred in certifying the tort of battery – exposure (in this case, putting a herbicide containing paraquat into the stream of commerce) does not satisfy the requirement of directness between the plaintiff and defendant, a key element of the tort.

Syngenta confirms that evidentiary overreach is not justified by the limited evidentiary record admissible on a certification hearing and that certification will only be granted on the basis of properly admissible evidence.

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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. Please contact the authors or a member of the group for further information.

[1] See also the majority’s decision in Lundin Mining Corp. v. Markowich, 2025 SCC 39, para. 125.

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