The Rising Tide Of Environmental Class Actions In Canada

Environmental class actions have become common for addressing environmental damages and seeking compensation through the courts. This trend is growing, particularly with respect to climate change and chemicals in products, posing significant legal, financial, operational and reputational business risks. Developing strategic responses is essential to minimize these risks effectively.

Below are key trends in environmental class actions and considerations for mitigating risks:

1. ESG Claims. Consumer and security-holder environmental class actions have increased in recent years, driven by stricter environmental, social and governance (ESG) disclosure requirements. In particular, greenwashing claims are rising, necessitating vigilant monitoring of corporate disclosure, communications and marketing practices.
2. Climate Change Litigation. Climate change class actions have grown globally, with significant cases in the U.S. and Europe against both government and corporations. These actions aim to reduce greenhouse gas emissions or seek compensation for climate-change-related harms. In Canada, such litigation has mainly targeted governments, but actions against corporations are expected to grow.
3. PFAS Litigation. PFAS (or perfluoroalkyl and polyfluoroalkyl substances), found in products like non-stick cookware and firefighting foam, have led to significant litigation due to their alleged health risks. Recent U.S. settlements highlight the potential for similar actions in Canada. Canadian cases have focused on drinking-water contamination, particularly near military and firefighting sites, with future claims likely coming from local governments and Indigenous bands.
4. Quebec Class Actions. Quebec has seen more conventional environmental class actions than other provinces, including noise complaints, dust and pollutant issues, and contamination. Quebec's permissive commonality criterion at the authorization stage has facilitated these actions. Historical decisions have set a precedent for successful environmental class actions in Quebec, and this trend is expected to continue.
5. Strategies for Businesses. Proactive planning is crucial for managing environmental litigation risks. Businesses should develop an emergency response plan, review internal policies and procedures, and ensure adequate record-keeping practices. Engaging external counsel, communications specialists and experts early on, as well as taking other steps such as reviewing insurance coverage, can be valuable for businesses facing these issues and help them minimize legal and financial repercussions.

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