A "defective medical devices" class action with a "regrettable history" has come to an end as the Court of Appeal for Ontario dismissed the appeal of the representative plaintiff as well as a cross-appeal on costs from the Attorney General of Canada.

In dismissing the cross-appeal, the court stressed that the "concept of public interest should be construed liberally through the lens of the goals of the Class Proceedings Act, 1992."

"It was open to the trial judge to determine that the public interest was engaged. Cases addressing liability for government regulation of consumer devices may be determined to be in the public interest," the court explained.

Paul-Erik Veel, a partner at Lenczner Slaght and counsel for the Law Foundation of Ontario, which had indemnified the representative plaintiff against any award of costs through the Class Proceedings Fund, said the "Court of Appeal's decision on the cross-appeal confirms the important role that public interest considerations should play in deciding on costs at the end of a class action."

"Here, the trial judge found that the case engaged matters of public interest, and he therefore awarded only a small proportion of the costs sought by the Attorney General. The Court of Appeal decision confirms a broad interpretation as to what kinds of class actions count as public interest cases," he explained, noting that the decision "also confirms that where a class action does have public interest elements, there may be a very substantial reduction in costs awarded against an unsuccessful representative plaintiff."

"The Court of Appeal's decision furthers access to justice by signalling that crippling costs awards should not be made against plaintiffs who are ultimately unsuccessful in class actions that engage the public interest," he added.

In Taylor v. Canada (Attorney General), 2022 ONCA 892 the appellant, Kathryn Anne Taylor, was the representative plaintiff in the class action certified by order of the Superior Court of Justice in Taylor v. Canada (Minister of Health), [2007] O.J. No. 3312.

According to court documents, the action was launched in "1999 and came to trial more than 20 years later."

"Along the way, there were developments in the law and numerous attendances before this court, one of which was a stated case before a five-judge panel of this court in 2012: Taylor v. Canada (Attorney General), 2012 ONCA 479," the court explained, noting that the class action involved "certain temporomandibular joint ('TMJ') implant devices made of a material known as Proplast manufactured by Vitek Inc. in the United States."

Taylor asserted that the "Canadian Government (and more particularly Health and Welfare Canada ('HWC')) owed a duty of care to members of the class to regulate and control the entry of those devices into Canada, and to warn of any dangers posed by those devices."

According to court documents, Vitek "issued a safety alert to physicians with respect to certain Vitek implants (TMJ interpositional)" in March 1990. When HWC was aware of the alert it "sent an Information on Potential Recall to the Medical Devices Unit of HWC in the Central Region on May 17, 1990."

The recall, the court noted, "was completed by October 3, 1990" and HWC "could only identify 162 implants which may have been used in Canada."

The action was certified after Drady v. Canada (Health), 2008 ONCA 659 and Attis v. Canada (Health), 2008 ONCA 660 "were decided," the court explained, noting the Attorney General "moved to have it decertified."

In both Drady and Attis the Court of Appeal "held that the legislative scheme did not demonstrate any intention to impose a private law duty of care."

According to court documents, a "five-judge panel was established to hear a stated case" on the action. Since Attis and Drady had "already held that the legislative scheme applicable in this case did not establish a duty of care," Justice David Doherty determined that a "duty of care could only be found based on interactions between HWC and class members."

He also found that it was "arguable that the combination of misrepresentations and the failure to correct the record in the face of the risk to specific patients could create proximity." However, the "possible duty of care owed" was a "narrow one."

The case proceeded before the trial judge, Justice Thomas Lederer of the Superior Court of Justice, with the Attorney General conceding that "the harm from negligently regulating TMJ implants would be reasonably foreseeable."

"As such," the court noted, "the duty of care analysis turned on proximity."

Justice Lederer "followed the reasoning in Attis, Drady, and the five-judge panel decision and concluded that no duty of care was imposed by the legislation."

Justice Lederer found that there were "no direct communications between the plaintiff and HWC" and there was "no prima facie duty of care, but if there were, he would have found that it was negated by residual policy considerations."

The trial judge also determined that "HWC's actions did not breach the standard of care."

Taylor raised two grounds on appeal. First, she submitted that Justice Lederer made a "palpable and overriding error in finding that the government had not approved the Vitek 'VK' type of Proplast TMJ prostheses."

"Quite apart from any issue of unfairness associated with raising this theory so late in these protracted proceedings, there was considerable evidence to support the trial judge's finding that the devices in issue never received NOCs [Notice of Compliance]," determined Justices Sarah Pepall, Katherine van Rensburg and Mary Lou Benotto for the Court of Appeal.

"Moreover," they added, "the trial judge observed that there was no evidence that anyone had relied on the Information Letter listing the devices as having received NOCs."

Therefore, the judges saw "no palpable and overriding error in the trial judge's conclusion that HWC had not issued NOCs or approved the Vitek devices in issue."

On the second ground of appeal, Taylor submitted that Justice Lederer "erred in his assessment of the evidence relating to Proplast Block and Sheeting for which NOCs had been issued."

The Court of Appeal noted that this argument was "readily addressed by two findings of the trial judge, both of which were supported by the evidentiary record."

"First, there was no evidence that any member of the class was implanted with Block or Sheeting as a TMJ implant at any time after Vitek received a NOC. Second, there was no evidence that anyone was misled by the product monograph, which described the products, uses, and protocols governing the devices," the judges explained, dismissing the appeal.

The Attorney General sought "leave to cross-appeal the costs award as against OHIP and the Law Foundation of Ontario." According to court documents, the Attorney General "sought costs of the proceedings on a partial indemnity scale amounting to $6,306,388.79."

However, Justice Lederer "awarded $385,000, which represented costs of two senior counsel working 10 hours a day for the 55-day trial" and "apportioned 10% of the costs to OHIP and the remainder to the Law Foundation of Ontario."

On the cross-appeal, the Attorney General made three arguments: first it submitted that Justice Lederer "erred in finding that the case involved a matter of public interest;" second, it submitted that Justice Lederer "erred in considering the effect the costs award would have on the Class Proceedings Fund;" and third it submitted that the "costs award was plainly wrong given the quantum."

The Court of Appeal, in a decision released Dec. 22, would "not give effect to these submissions."

"The trial judge was properly alert to the public interest and the effect that costs would have on access to justice in class proceedings and considered the Fund in that context. Even absent consideration of the Fund, we are nonetheless satisfied that the costs award was fair and reasonable in the circumstances," the judges wrote.

James Newland, senior counsel at Gluckstein Lawyers and counsel for the Ontario Health Insurance Plan, said "the most significant issue highlighted by the court was the reaffirmation of the principle that class actions are in the public interest, and particularly so in cases like Taylor, where the core of the action related to the issue of accountability of a public regulator when a defective medical product capable of causing serious injury to patients is released into the market on the regulator's watch."

He noted that "for this specific defective product, there is a very interesting litigation history, which highlights the importance of a rigorous regulatory body gatekeeper to scrutinize the safety and efficacy of new medical products coming onto the market, and the importance of all stakeholders (patients, doctors, hospitals, manufacturers, distributors and the regulator) in ensuring patient safety."

In an interview with The Lawyer's Daily, Newland said this was the "perfect case to demonstrate the concept of protection of patient safety."

"In patient safety, you've got a number of stakeholders: the manufacturer, the distributor, doctors and hospitals using the product, patients and the regulatory body. It's an interdependent circle, everyone relies on everyone else to do their job properly," he said, noting that if the "device is safe to begin with, it doesn't really matter."

"But, in a situation where the product is not safe, you have cascading effects and impacts," he explained, noting that the manufacturer in this case "went bankrupt" before it could "pick up the pieces."

Newland noted that the Court of Appeal "affirmed that class actions like this against the regulator are in the public interest," which he thought was "a very important pronouncement."

Counsel for the appellant and the Attorney General did not respond to request for comment before press time.

Originally Published by The Lawyer's Daily

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