Personal Jurisdiction over Non-Resident Class Members: Have We Gone Down the Wrong Road?
38 Pages Posted: 22 Nov 2009 Last revised: 24 Sep 2015
Date Written: April 30, 2010
Canadian courts have recently been struggling with the question of personal jurisdiction over non-resident class members in multi-jurisdictional class actions. On what basis can an Ontario court, for instance, purport to bind a class member resident in British Columbia or Quebec? The loose consensus appears to be that a court in one province has personal jurisdiction over a class member in another province where there is a "real and substantial connection" between the plaintiff class and the adjudicating forum. However, a lack of consensus in the application of the real and substantial connection test has proved problematic for parties seeking finality in litigation. In particular, defendants cannot be assured that a settlement or judgment rendered in one province will in fact be enforceable in another, since the enforcing court may conclude that the adjudicating court did not have jurisdiction over non-resident class members under its view of the real and substantial connection test. There is thus the possibility that a defendant who has proceeded on the assumption that a settlement or judgment will be res judicata, will nonetheless be required to re-litigate the claim. This ultimately undermines the "order" and "fairness" which are said to lie at the heart of the Canadian conflict of laws.
This paper suggests that it is necessary to re-think whether a real and substantial connection is needed to ground jurisdiction over a non-resident plaintiff class. The real and substantial connection test was originally developed to govern the question of when courts can assume jurisdiction over an individual out-of-province defendant. The test cannot be readily transposed outside this context. Instead of focusing on the issue of whether there is a real and substantial connection between a non-resident plaintiff class and the adjudicating forum to support the assumption of jurisdiction, courts should re-orient their analysis towards ensuring that procedural safeguards are afforded to non-resident plaintiffs. If a non-resident class member is provided with sufficient notice, an opportunity to opt out and adequate representation, an adjudicating court should be viewed as jurisdictionally competent and its judgment accorded preclusive effect. Re-conceptualizing jurisdiction in this way eliminates the possibility that an enforcing court will be able to second-guess the adjudicating court's view on whether the real and substantial connection test has been satisfied and gives defendants a measure of control over the ultimate enforceability of a class judgment or settlement.
Suggested Citation: Suggested Citation