Oct 31, 2014 0
Class action plaintiffs lose at Nova Scotia’s highest court, ordered to pay costs to government defendants
The Nova Scotia Court of Appeal delivered its decision on costs in a major class action lawsuit last week. The class action, which was first initiated about a decade ago, sought redress for environmental contamination allegedly caused by the governments’ decades long operation of the Sydney Steel plant.
Last year, the provincial and federal governments successfully appealed the class action’s certification. The Nova Scotia Court of Appeal decertified the class action in December 2013. Just last week, the Court of Appeal released its decision respecting costs.
The Court ordered that the plaintiffs, who were unsuccessful on appeal, pay part of the federal and provincial governments’ costs. The costs order amounted to over $700,000.
When asked what the costs award meant for her, Neila MacQueen, a plaintiff in the case, explained “I thought it was intolerable for us to be charged $700,000. We can’t afford it. We would go bankrupt. We would lose our homes.”
Critics worry the award sets a troubling precedent. Significant cost awards against class action plaintiffs undermine access to justice, critics say. Those who might otherwise pursue a class action may feel deterred from doing so given the cost implications.
The Court explained at paragraph 56 of its decision that, while it considered access to justice concerns in rendering its decision, these factors must be weighed against others and, in this case, the Court believed that it “would not be fair and reasonable” to order no or nominal costs “given the complexity of the certification hearing, the amount at stake in the litigation and the success of Canada and Nova Scotia.”
Ultimately, Ray Wagner, who acted for the plaintiffs, explained that his law firm will pay the award. The firm had taken out the equivalent of an insurance policy that, in the event of a defeat, would cover a large portion of the costs.
Nonetheless, Wager explained that, “$733,000 would chill any plaintiff or any lawyer from participating in a class proceeding in this province.”