Jean-Marc Leclerc and David Sterns
Published on April 26, 2012
Posted in: Blog
The Supreme Court of Canada denied leave to appeal in the Smith v. Inco class action today. The class action alleged that a nickel refinery operated by Inco for 66 years contaminated properties in the Port Colborne area and that disclosures about this contamination negatively affected property values. The Ontario Court of Appeal overturned a $36 million trial judgment, concluding the plaintiffs failed to establish liability in nuisance and failed to prove any damages.
Almost by their very nature, environmental class actions as a group are more complex to resolve on a class-wide basis, as compared to other kinds of class actions like ones based on contract. If hundreds of people have a cause of action in contract with identical language, one can easily see how that can be determined once and for all for everyone. That can be much different from a case involving environmental contamination, where the harm suffered by one person can be very different from the harm suffered from another. Proof of damages can be more complex.
The first case the Supreme Court ever heard relating to Ontario’s Class Proceedings Act was in 2001 in the Hollick v. Toronto (City) decision. That was an environmental class action the Supreme Court held should not be certified. Many thought that leave to appeal would be granted in Smith v. Inco simply because it offered a rare opportunity for the Supreme Court of Canada to revisit basic principles relating to environmental class actions against the background of a full trial record some 11 years after it first considered the issue in Hollick.
Although each environmental case is obviously different, the effect of the Smith v. Inco case may be that class action lawyers are less willing to bring these cases in the future. It took 10 years to take the case to trial. The trial itself took months. And the plaintiffs came out of the process with nothing. Against this background, there will undoubtedly be some who will prefer more low hanging fruit rather than take on the risk of an environmental class action and its unique challenges.