Five Rulings Shaping Ontario Class Actions in Q1 2026

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Ontario’s class actions continued to evolve in Q1 2026, with five key rulings addressing certification standards for causation, preferability between overlapping proceedings and the limits of cross-border evidence, among other topics.

The rulings held as follows:

• Causation can be certified without a perfect comparator for a risk-ratio analysis.
• Preferability is not determined by first to certify.
• Compliance with franchisor‑mandated terms is insufficient to ground a conspiracy claim among franchisees.
• Pierringer protection is not automatic in insolvency claims settlements.
• U.S. settlements and rulings on non-Canadian conduct are not probative of certification issues.

This article summarizes these decisions and their implications for future cases.

Certifying Causation as a Common Issue

To certify causation as a common issue, a plaintiff must demonstrate a workable methodology for establishing causation on a class-wide basis. The Ontario Court of Appeal has previously held that a rebuttable inference of causation may be established through statistical evidence such as a risk ratio showing an increased risk associated with a defendant’s conduct.

But what about where there is no direct comparator or “norm” against which the defendant’s conduct can be measured?

In Head v. 859530 Ontario Inc., 2026 ONCA 231, the Court of Appeal addressed this issue when dismissing an appeal from a certification order involving COVID‑19 infections and deaths at a long‑term care facility.

The defendant facility argued that no suitable comparative data existed because the outbreak occurred at a unique time: vaccines were just becoming available, and the spread involved the U.K. variant of COVID‑19. In the facility’s submission, these factors made a risk‑ratio comparison impossible and undermined the existence of a workable methodology for proving class‑wide causation.

Both the motion judge and the Court of Appeal rejected this argument. The court held that requiring definitive proof of a specific comparator at the certification stage would improperly transform the certification motion into a determination on the merits. The significance of the U.K. variant and the early vaccine rollout were issues properly left for trial. This conclusion was reinforced by the defendant’s own expert, who acknowledged that an existing database could permit comparisons between long‑term care facilities, subject to appropriate controls to ensure valid “apples‑to‑apples” comparisons.

The Court of Appeal agreed that whether and how the increased transmissibility of the variant could be accommodated within a risk‑ratio analysis went to the merits of the claim and did not preclude certification.

First to Certify Not a Basis to Stay Overlapping Class Action

In Strathdee v. Johnson & Johnson Inc., 2026 ONSC 1186, the Ontario Superior Court considered whether to stay a proposed class action in Ontario in light of parallel proceedings in British Columbia and Quebec relating to alleged inadequate warnings on baby powder.

Although the B.C. action had been certified first, the court declined to stay the Ontario proceeding. The Ontario action was found not to be a placeholder and was brought for a legitimate purpose. Importantly, the action defined a broader class and raised broader claims, potentially allowing more people to recover damages. As such, given the scope of the Ontario action and the range of issues and remedies available, the court found that allowing it to proceed could provide greater access to justice. It would not amount to abuse of process or undermine the administration of justice.

On preferability, the court considered not only the other class actions but also 89 individual actions across Canada. While the defendants argued that comity warranted deference to the B.C. certified action and that individual actions provided an alternative means of relief, the motion judge was not persuaded. Judicial economy was held not to be served by hundreds of similar or identical claims, and individual plaintiffs will have to bear significant costs to establish their claim. As to comity, the benefits achieved were held by the judge not to outweigh access to justice concerns for the broader class defined for certification in the Ontario action. The defendants’ position on comity amounted to a first to be certified rule without regard to the differences in the actions and the broader class. The judge reasoned that comity is achieved by paying attention to decisions in parallel proceedings and respecting those findings, while recognizing that differences in evidence may yield a different outcome that must be factored into the preferability analysis.

As an alternative, the defendants raised a carve-out of class members in the B.C. and Quebec actions. The court viewed this as introducing a layer of complexity for class members given the class definition in the B.C. proceedings around the extent of use, histologic sub-type of epithelial ovarian cancer and the date of diagnosis. The court reasoned it could unnecessarily confuse case management, communications and disputes over class membership in advance of the common issues trials. While the motion judge noted it is preferable that courts attempt to reduce overlapping claims, where duplicates exist and cannot be avoided after a reasoned analysis, the court and litigants must manage those cases appropriately with a view to achieving the Class Proceedings Act’s policy objectives.

Franchisees Not Common Employers or Co-Conspirators

In Cervantes v. Pizza Nova Take Out Ltd., 2026 ONSC 713, the Ontario Divisional Court considered an appeal arising from a certification motion concerning whether pizza delivery drivers were employees or independent contractors.

The Divisional Court upheld the motion judge’s refusal to certify a novel claim that all Pizza Nova franchisees were common employers of delivery drivers, regardless of location. While each franchisee maintained a business relationship with the franchisor, there was no relationship between franchisees themselves. The existence of a shared trade name, logo or customer base was insufficient to establish that one franchisee exercised control or management over another.

The court also rejected an expansive conspiracy claim against all franchisees. It overturned the certification of that claim, finding that franchisees’ compliance with franchisor‑mandated terms – such as requirements that drivers be engaged as independent contractors or that a standard form delivery agreement be used – did not amount to a conspiracy.

Relying on established authority, the Divisional Court emphasized that mere acquiescence is insufficient to ground a conspiracy claim. Similarly, conduct that merely furthers another party’s alleged wrongdoing does not constitute an independent tort. The use of a standard form contract imposed by the franchisor, without more, could not support an allegation that franchisees acted in combination with one another by agreement to conspire to commit the unlawful act.

Pierringer Protection Denied in Bankruptcy Recognition Order

All federal, provincial and territorial governments and agencies commenced a proposed class action against numerous Purdue Pharma and unrelated companies to recover the health-care, pharmaceutical and treatment costs related to the use and abuse of opioids. The Canadian government plaintiffs seek to hold the defendants jointly and severally liable for health-care costs and other damages. In Purdue Pharma (Re), 2026 ONSC 902, the Ontario Commercial List was asked to limit the liability of non-settling defendants following settlements with Purdue entities as part of recognition of approved restructuring plans in the U.S.

The Canadian provinces had filed claims in U.S. Chapter 11 proceedings relative to the U.S. Purdue companies. As part of a Chapter 11 plan, the Canadian provinces entered into an agreement by stipulation with the Chapter 11 debtors and the Sackler family (owners of Purdue Pharma). The stipulation narrowed the scope of plan releases, preserving the Canadian governments’ claims against parties other than the Chapter 11 debtors arising from the conduct of Canadian entities affiliated with them, provided those claims are not based on any conduct of the debtors.

The U.S. Bankruptcy Court approved the stipulation and, shortly thereafter, the Chapter 11 debtors filed a revised plan that included a carve-out based on the conduct of Canadian entities. The carve-out preserved the right of all creditors of Chapter 11 debtors to pursue the Purdue Canadian entities and the Sacklers with respect to their Canadian conduct.

Following approval of the stipulation, the Canadian governments settled the class action against the Canadian Purdue entities and the Sacklers. The settlement required the Canadian governments to obtain a bar order precluding claims for contribution and indemnity against the released parties and provides that the Canadian governments will not seek to recover the settling parties’ proportionate share of liability from the third-party co-defendants.

Those third-party co-defendants sought a bar order as part of a motion brought by the Chapter 11 debtors for recognition of the U.S. bankruptcy court’s confirmation of a Chapter 11 plan. Specifically, they sought an order precluding the Canadian governments from seeking recovery from them for the settling defendants’ proportionate share of liability. The third-party co-defendants argued that where there is a settlement in multi-defendant litigation, the settlement affords non-settling defendants protection against liability for the settling defendant’s proportionate share, consistent with Pierringer-type principles, under which a settling defendant is removed from the action and non-settling defendants are only liable for their own proportionate share of damages.

The court declined to grant the requested bar order sought by the third-party co-defendants, noting that, under Canadian law, the insolvency of one defendant in multi-defendant litigation is a risk borne by the other defendants, not the plaintiff. If a defendant is found jointly and severally liable for the plaintiff’s damages and cannot recover on its claim for contribution and indemnity from the insolvent defendant, the plaintiff’s recovery from the non-insolvent defendant is not impacted. The court rejected the argument that any deal made by a plaintiff that files a proof of claim in an insolvency gives rise to Pierringer protection and severs joint liability. The court reasoned that recognizing such protections could discourage plaintiffs from negotiating resolutions of their claim within the insolvency.

U.S. Settlement and Proceedings Irrelevant

Two recent decisions underscore that Canadian class actions turn on conduct occurring in Canada and the application of Canadian law.

In Rodd v. Intuit Canada ULC, 2026 ONSC 1212, a proposed class action alleging that TurboTax software was falsely advertised as being “free,” the statement of claim referred to a U.S. settlement in which Intuit agreed to end its “free” advertising campaign and pay US$141 million in restitution to American consumers. It also pleaded a ruling by the U.S. Federal Trade Commission finding deceptive advertising in respect of the same campaign. Materials relating to the U.S. litigation were also included in the certification record.

The motion judge struck both the pleading and the evidence. With respect to the pleading, the Ontario Superior Court noted that the U.S. settlement involved no admission of fault and arose under a different legal regime. Allowing the pleading risked a prolonged inquiry into the relevance of the U.S. settlement to Canadian findings of liability or damages, including punitive damages.

As for the certification record, the court held that evidence concerning advertising to U.S. consumers had little to no probative value in a Canadian proceeding and could needlessly expand the certification inquiry into questions about the similarity of facts and legal frameworks. As the motion judge summarized, “The Canadian action should rise and fall on the Canadian legal framework and the facts relative to the advertising to Canadian consumers.”

A similar conclusion was reached by the Federal Court in Eaton v. Teva Canada Limited et al., 2026 FC 239. There, the plaintiff alleged an industry‑wide conspiracy to inflate generic drug prices across Canada but relied on evidence from U.S. proceedings. In finding the plaintiff failed to establish some basis in fact, the Federal Court held that none of the U.S. materials suggested the alleged conspiracy extended into Canada, nor could admissions by U.S. affiliates establish that Canadian subsidiaries or affiliates engaged in similar conduct.

The Class Actions Group at Aird & Berlis LLP offers a full range of services, including defending class actions, appellate advocacy, risk mitigation strategies, insurance coverage advice, representation at insolvency-related proceedings and settlement administration advice. Our team of lawyers brings decades of class action experience across a wide range of industries and subject matters. For more information, please contact Co-Leaders Kate Findlay or Steve Tenai.