Product Liability Comparative Guide

1 Product liability regimes

1.1 What are the legal regimes under which consumers who are injured by a defective product can bring a claim for compensation? What is the most common way in which such product liability claims are brought?

Canadian product liability law operates under a mix of common law and statutory law, and falls within the jurisdiction of both the federal and provincial governments. The federal government regulates a number of areas related to product liability, including:

• food and drugs;
• medical devices; and
• many consumer products and hazardous products.

The federal government also oversees safety standards for motor vehicles and the aviation industry.

The provinces and territories across Canada also have their own specific legislation and rules pertaining to:

• the sale of goods;
• consumer warranties; and
• some product regulation.

However, common law principles in both tort and contract also have application in all provinces and territories except Quebec, which is governed by civil law under the Civil Code of Quebec and, in certain circumstances, the Québec Consumer Protection Act.

Consumers suffering damages due to a defective product may be able to bring a claim for compensation under various legal regimes, including the following:

• Common law negligence: In Canadian tort law, strict liability for claims of negligence does not exist. Rather, manufacturers owe a duty to consumers of their product to see that there are no defects in manufacturing which are likely to give rise to injury in the ordinary course of use including components produced by others and installed in the manufacturer's product. Products must also be adequately designed and come with sufficient warnings and instructions. Other entities involved in the supply and distribution chain of a product also owe a duty of care to the end customer.
• Contract: Independent and concurrent liability in tort law may exist. If a contractual relationship exists, different remedies may be awarded for breach of conditions or warranties. There are substantive differences between whether a term is a warranty versus a condition, with the latter giving rise to a wider range of remedies. In certain situations, a manufacturer may be found to have provided a collateral warranty about its products due to representations about the product even though no direct contractual relationship exists between it and the consumer.
• Legislation: Federal and provincial consumer protection legislation provides statutory warranties concerning product quality and also aims to protect consumers from unfair business practices, such as false advertising, deceptive pricing and unfair contract terms. Provincial sale of goods legislation may also be applicable in some circumstances allowing remedies for breach of statutory warranties or conditions regarding fitness for purpose or merchantable quality.

1.2 Do any special regimes apply in specific sectors?

No answer submitted for this question.

1.3 Are the courts in your jurisdiction generally considered sympathetic to claimants in product liability suits?

No answer submitted for this question.

2 Parties

2.1 Can representative bodies bring product liability suits in your jurisdiction on behalf of groups of consumers? If so, which bodies may do so and what is the applicable procedure?

Class action lawsuits allow a representative plaintiff to pursue actions on behalf of classes comprised of a group of individuals with similar claims either in one jurisdiction or from across the country. In most Canadian provinces, representative bodies, such as consumer advocacy groups, may bring a class action lawsuit on behalf of a group of consumers who have been harmed by a defective product. This is achieved through legislation that provides that standing to pursue a class proceeding may be granted to a representative body if a substantial injustice would result to the class unless standing was granted.

Ontario's legislation does not address the potential role of representative bodies. Therefore, class proceedings in Ontario are typically pursued exclusively by a representative plaintiff on behalf of the class.

In Quebec, representative bodies are expressly permitted to represent a class of plaintiffs as long as:

• one of its members – the designee – is a member of the class; and
• the designee's interest is related to the purpose for which the body was constituted.

Provincial consumer protection legislation in some provinces allows the head or director of the provincial consumer protection agency to commence and maintain actions on behalf of individuals where it is in the public interest to do so.

2.2 Are class actions or other forms of collective action available in your jurisdiction? If so, what restrictions and requirements apply in this regard? Are they commonly used?

All provinces in Canada have legislation permitting class action proceedings. Class actions are also permitted in the Federal Court of Canada pursuant to the Federal Rules of Court. Class actions are widely pursued in Canada across a number of subject areas. In particular, numerous product liability claims have been pursued as class claims in Canada.

Until a proposed class action is certified by the courts as a class action, its scope generally remains restricted to the individual(s) who commenced it. Excluding Quebec, a broadly similar five-part certification test is used in all other Canadian jurisdictions:

• The pleading discloses a cause of action;
• There is an identifiable class of two or more persons;
• The claims or defences of the class members raise one or more issues that are common among all the class members;
• There is no other procedure preferable to a class proceeding to resolve the common issues; and
• The representative claimant will fairly represent the interests of the class.

Despite the overall similarity, some nuanced differences exist among the provinces – for example, the test for certification in Ontario also requires common issues to predominate over individual issues.

In Quebec, the requirements for authorisation (the civil law term equivalent to certification) of a class action are as follows:

• The claims of the members raise identical, similar or related questions of law or fact;
• The facts alleged seem to justify the conclusions sought;
• A class proceeding is the preferable procedure to resolve the common issues; and
• There is a representative who can represent the members adequately.

2.3 Which parties may potentially be held liable for defective products in your jurisdiction?

Manufacturers are most commonly sued. However, Canadian courts have held that the duty of care extends to almost all participants in the product supply and distribution chain, including designers and manufacturers of the product and its component parts. Additionally, material suppliers and importers, wholesalers, distributors and retailers may also be sued. Claims may also be advanced against repairers, installers, inspectors and certifiers.

Parties may be held liable in negligence only if their conduct falls below the standard of care owed to the injured party. The standard of care used to assess a defendant's action is the use of reasonable care in the circumstances. Reasonableness will be influenced by and commensurate with the defendant's position in the supply and distribution chain. For example, a distributor would not likely be found to have exercised an unreasonable level of care if it failed to ensure that a food product complied with the allergy certification on the product's label during shipping.

In contract, purchasers are generally entitled to sue only the party from which they directly purchased the goods. Common law courts have long since established that 'privity of contract' is a prerequisite to successfully claiming damages in breach of contract – that is, the plaintiff must have a contractual relationship with the defendant in order to successfully bring a claim. Because of this distinction, in common law provinces, while a purchaser may sue the retailer with which they have a contractual relationship, the manufacturer is generally exempt from contractual liability.

2.4 Can parties outside the jurisdiction be the target of a product liability suit? What requirements and restrictions apply in this regard?

In Canada, plaintiffs are not subject to restrictions on who they name as defendants in actions. However, courts must have jurisdiction over an action in order to rule on its merits. Under the common law, Canadian courts may exert jurisdiction over foreign defendants in certain circumstances, including when the harm caused by a defective product occurred in Canada and a 'real and substantial connection' to the foreign entity exists. The core of the real and substantial connection test is expressed as:

• a connection between the plaintiff's claim and the forum;
• a connection between the legal situation or subject matter of the litigation and the forum;
• a connection between the circumstances giving rise to the claim and the forum; or
• a connection between the action and the forum.

A broad range of circumstances may create a presumptive real and substantial connection. This may include where a foreign defendant manufactures or designs a product in a foreign jurisdiction which the defendant either knows or should have reasonable foreseen would enter into the normal channels of trade in Canada. In such a scenario, the forum within Canada in which the plaintiff suffered damage would likely be entitled to exercise judicial jurisdiction over that foreign defendant.

3 Basis for liability

3.1 What are the most common grounds for action in your jurisdiction where a consumer is claiming damages for injuries caused by a defective product?

No answer submitted for this question.

3.2 Can criminal penalties be imposed for the manufacture or sale of defective products?

While there are no provisions in the Canadian Criminal Code directly noting defective products, the provisions pertaining to fraud and criminal negligence could potentially apply to manufacturers, sellers, employees and any agents of the same.

Fraud is established when a person by deceit, falsehood or other fraudulent means defrauds the public or any person of any property, money or valuable security or any service. Knowingly misleading purchasers as to the quality or characteristics of a product could result in criminal liability.

The criminal offence known as criminal negligence causing bodily harm could be established by selling or offering for sale any product that is likely to cause bodily harm to any person. Furthermore, if a person's actions in relation to the manufacture or sale of a defective product are found to demonstrate a wanton or reckless disregard for the lives or safety of others, that person may be charged with the offence of criminal negligence causing death.

4 Defective products

4.1 How is a 'defective product' defined in your jurisdiction?

In Canadian product liability law, a 'defective product' is generally defined as a product that is unreasonably dangerous or unsafe for its intended use due to a defect. This defect can arise from the product's design, manufacturing or marketing (also known as failure to warn):

• Negligent design: A design is negligent if:
• • it creates a substantial risk of foreseeable harm; and
  • an alternative design exists that is both safer and economically feasible to manufacture.
• In determining whether the chosen design is reasonable, the court will weigh the utility and risk of the chosen design against the risk and loss of utility of the proposed safer design. A manufacturer does not have the right to manufacture an inherently dangerous article when such a reasonable alternative design exists. However, where no such reasonable alternative design exists, dangerous products may be sold with adequate warnings.
• Negligent manufacture: A manufacturing defect occurs when a product is not manufactured according to its design specifications, rendering it unsafe or dangerous. This type of defect usually results from errors or mistakes during the manufacturing process. Shoddy or poorly made products which are not dangerous are not defective for the purpose of establishing tort liability; therefore, the law of negligence does not compensate purchasers for the cost of repairing or replacing a defective but non-dangerous product.
• Negligent failure to warn: While dangerous products may be sold, they must be sold with adequate warnings, instructions and/or labelling that provides sufficient information to enable consumers to use the product in a reasonably safe manner. The principles governing the duty to warn include the following:
• • There is a duty to warn of dangers inherent in the use of a product;
  • In situations where previously unknown risks with the product materialise, the duty is ongoing and continues after the product is delivered;
  • Warnings must be clear and specific to the dangers that arise from ordinary use; and
  • The duty varies with the level of danger associated with ordinary use of the product.

Plaintiffs may also choose to ground a product liability claim in breach of contract. A breach of contract occurs when one party does not live up to its end of the bargain. One of the ways in which a party can breach a contract is by breaching one of the contract's conditions. This type of breach entitles the non-breaching party to sue for rejection of the contract and any injuries or damages that follow.

In all provinces except Quebec, provincial Sale of Goods Acts stipulate that two implied conditions exist in every contract for the sale of goods.

First, there is an implied condition that the product sold would be fit for the purposes for which it was purchased. This implied condition is imposed only where:

• the buyer either expressly or implicitly informs the seller of those particular purposes; and
• the seller normally sells those types of goods.

If these two requirements are met, the implied condition will require sellers to ensure that the goods were fit for whatever purpose was stipulated, failing which a claim for a breach of a condition would arise. A defective product would be one which is not fit for the purpose for which it was purchased, given the above considerations.

Second, the Sale of Goods Acts impose an implied condition that all goods sold by a seller which deals in goods of that description must be of a 'merchantable quality'. This means that the goods must be commercially saleable under the contract description. If the product has multiple purposes, 'merchantability' simply means that the goods would be suitable for the lowest purpose for which such goods are normally used. Under this implied condition, a defective product is one that is not of merchantable quality.

4.2 What are the standards for proving that a product is defective? Who bears the burden of proof? Is it possible to shift the burden of proof?

The plaintiff carries the burden of proof to demonstrate that a product is defective. Broadly speaking, the onus is on the claimant to prove, on the balance of probabilities (ie, more likely than not), that the product, as designed, manufactured or labelled, fell below reasonable standards considering all of the circumstances.

The nature and manner of proof as it relates to proving a specific defect will depend on the theory of negligence being pursued. Proving a design defect versus a manufacturing defect or a defective warning all entail different considerations.

A design defect requires proof that the product was manufactured as intended but the design results in an unreasonable risk of harm that could have been avoided or mitigated by a reasonable alternative design. Expert evidence as to what constitutes a reasonable alternative will typically be required.

With respect to a manufacturing defect, if such a defect can be demonstrated by physical or scientific proof, a court will generally require expert evidence establishing such a defect. Where such physical or scientific proof may be impossible to adduce, circumstantial evidence establishing the absence of any other reasonable explanation may be accepted as proof of a defect. If an injured claimant can prove that a defect originated during the manufacturing process, a presumption of negligence arises in his or her favour. The burden then shifts to the manufacturer to disprove that it was responsible for the defect.

Addressing the sufficiency of a warning may require expert evidence particularly where the warning is technical in nature and provided to learned intermediaries. However, the nature of the product, its risks and its accompanying warning may be such that no special assistance is required by the court to conduct the necessary analysis.

Defective products are not expressly defined in Quebec but Article 1726 of the Quebec Civil Code describes the notion of 'latent defects' as something that renders the product unfit for the use for which it was intended, or which so diminishes its usefulness that the buyer would not have bought it or paid so high a price if they had been aware of it.

4.3 What are the standards for proving the causal link between the product defect and the damage suffered established? Who bears the burden of proof? Is it possible to shift the burden of proof?

The plaintiff must prove it was more probable than not that the breach of contract or negligent conduct of the defendant caused the plaintiff's injuries. Causation is a question of fact to be determined on the basis of the 'but for' test. A plaintiff must establish, on the balance of probabilities, that the plaintiff would not have suffered damages 'but for' the defendant's breach of contract or negligence.

In the rare circumstances where it is impossible to use the 'but for' test, Canadian common law courts use a 'material contribution' test. This test asks whether the defendant's negligence materially contributed to the risk of the plaintiff's injuries occurring.

In Quebec, the standard of proof is the preponderance of evidence. In extra-contractual cases relating to an alleged safety defect, once the plaintiff proves the existence of the safety defect, the injury and the causal link, the burden shifts to the defendant to rebut the presumption that it knew of the safety defect. In contractual cases under the regime relating to the guarantee of quality of a sold property, the plaintiff benefits from the presumption that the alleged defect existed at the time of the sale and the presumption the seller knew of the defect.

4.4 What else must be proven to succeed in a product liability action? What specific concerns and considerations should be borne in mind in this regard?

With physical injury claims arising from product defects, the plaintiff must provide the necessary evidentiary support to allow the court to assess and determine the extent of the injury and its impact.

Psychological injuries may be compensable where a claimant proves that he or she suffered a mental disturbance as a result of the defendant's negligence that is serious, prolonged and rises above the ordinary annoyances, anxieties and fears that come with living in civil society.

5 Defences and limitations

5.1 What is the limitation period for bringing a product liability suit in your jurisdiction? What requirements and restrictions apply in this regard?

Limitation periods may vary by province. However, the typical limitation period for product liability injuries is two years from the date of discovery. The date of discovery depends on a number of fact-specific factors, some of which may be stated somewhat differently across different provincial statutes. However, broadly stated, the underlying consideration is when a plaintiff had actual or constructive knowledge of material facts sufficient to make a plausible inference of the defendant's liability.

In Quebec, a product liability action must be initiated within three years.

5.2 What defences to product liability suits are available in your jurisdiction?

In addition to limitation periods, other potential defences include:

• compliance with requisite standards;
• contributory negligence;
• assumption of risk;
• intervening causes;
• misuse of products;
• learned intermediaries; and
• contractual waiver, exclusion and limitation clause.

Compliance with standards: Compliance with a statutory or regulatory standard is not a complete defence. It is one factor among many to be considered in any assessment of negligence. Even when a manufacturer abides by all regulatory standards or issues a warning that complies with regulatory standards, there may still be a viable claim for negligence. However, compliance with regulatory reporting requirements in certain circumstances may be very helpful evidence for a defendant and has been found to meet the duty to warn in some instances.

Contributory negligence: Negligence on the part of the plaintiff, called contributory negligence, does not typically provide a complete defence. However, it could theoretically do so in a situation where the plaintiff's misuse or unreasonable modification of a product can be demonstrated to be the sole causal factor as it relates to the plaintiff's damages.

In most cases, negligence on the part of the plaintiff will reduce the award of damages in proportion to their degree of fault. To establish contributorily negligence, the defendant must prove on a balance of probabilities that the plaintiff breached the standard of care required of him or her. This analysis essentially considers whether the plaintiff acted reasonably in all the circumstances of the case.

In Quebec, a similar principle of 'common fault' limits the liability of negligent defendants when the plaintiff has also been negligent.

Assumption of risk: A defence that the plaintiff voluntarily assumed the risk of loss or damage is difficult to establish. The courts have been more willing to find contributory negligence and apportion the loss between the plaintiff and defendant rather than absolve the defendant of liability through this defence.

Intervening act: Defendants may avoid liability when a separate and intervening act of negligence breaks the chain of causation between the initial negligence and the injured plaintiff. The intervening act must have been responsible, at least in part, for the damages claimed. Similar to the voluntary assumption of risk, this defence is rarely successful. However, it can result in an apportionment of negligence to another negligent party.

Learned intermediary: This defence is an exception to the general rule requiring manufacturers to directly provide a warning to the ultimate consumers of their product. It will generally apply only either where:

• the product is highly technical or complex and is to be used with expert advice or supervision; or
• the nature of the product is such that it is unrealistic for the consumer to receive a warning directly from the manufacturer.

When a skilled person or professional learned intermediary is involved in advising consumers about a product before the product is used or consumed, the manufacturer may be able to avoid liability if the learned intermediary:

• misrepresents the product; or
• fails to determine whether the product is appropriate for the consumer.

A manufacturer remains obligated to provide sufficient information to the intermediary of the nature and risk associated with the use of the product. This defence is most commonly used by manufacturers of prescription drugs or medical devices.

Contractual waiver, exclusion and limitation clause: Courts generally allow parties to contract out of their right to recover via contractual wavier, exclusion and limitations clauses.

5.3 Can a party exclude or limit its liability for defective products in your jurisdiction? If so, how? What specific concerns and considerations should be borne in mind in this regard?

Excluding tort or contract liability by way of exclusion or limitation of liability provisions within a contract is possible but challenging to achieve in the context of widespread sales using standard form contracts. While such clauses are generally enforceable in commercial contracts and can limit or fully avoid responsibility in contract or tort, the courts strictly and narrowly construe them against the party seeking to enforce. To be enforceable, the wording must be clear, direct, unambiguous and free of inconsistency with other provisions in the contract.

The court will also consider whether certain exclusion clauses should be specifically brought to the attention of the consumer before contracting. Further, the courts will assess whether the specific clause is unconscionable or otherwise against public policy.

An adequate description and warning of the use and risks associated with the product is a further mechanism to help protect against liability.

A hallmark of most consumer protection legislation is the inability to exclude the operation of the legislation through consumer contracts. Typically, the statutory warranties and protections offered in such legislation prevail regardless of attempts to contract out of them. Commercial contracts under sale of goods legislation are subject to statutory warranties and conditions regarding, among other things, product quality. These cannot typically be waived.

6 Forum

6.1 In what forum(s) are product liability suits heard in your jurisdiction?

No answer submitted for this question.

6.2 Who hears product liability suits in your jurisdiction (eg, judges or juries)?

Jury trials are available, but the vast majority of civil trials in Canada proceed by judge alone. In Quebec, all civil trials are tried before a judge alone.

6.3 Is there any opportunity for forum shopping in your jurisdiction? If so, what are the implications?

The real and substantial connection test used to determine jurisdiction over foreign defendants also applies to resolve interjurisdictional issues within Canada. Jurisdiction typically exists both in the location in which the injuries or damage occurred (typically where the plaintiff resides) and also where the defendant is located.

Forum issues may arise in the context of competing multi-jurisdictional class actions. While the court in one province can determine which competing representative plaintiff can assume carriage of the action within that province, this does not prevent a different representative plaintiff in another province from pursuing a similarly constituted class action. Defendants have been faced with multiple class actions by different representative plaintiffs in different provinces advancing claims involving the same product each seeking to certify a nation-wide class of persons.

7 Filing a product liability suit

7.1 What are the formal, procedural and substantive requirements for filing a product liability suit? How does this process typically unfold and what is the timeframe?

No answer submitted for this question.

7.2 Do any pre-filing requirements apply before commencement of the suit?

No answer submitted for this question.

7.3 How is jurisdiction over the product liability suit determined?

No answer submitted for this question.

7.4 How is the applicable law determined?

No answer submitted for this question.

7.5 Under what circumstances (if any) must security for costs be provided?

No answer submitted for this question.

8 Disclosure and privilege

8.1 What rules apply to disclosure/discovery in your jurisdiction? Do any exceptions apply?

No answer submitted for this question.

8.2 What rules on privilege apply in your jurisdiction? Do any exceptions apply?

No answer submitted for this question.

8.3 What are the specific implications of the rules on discovery/disclosure and privilege in product liability suits?

No answer submitted for this question.

9 Evidence

9.1 What types of evidence are permissible in your jurisdiction? How is this typically presented during the proceedings?

The rules of evidence vary according to the province in which the proceedings are being heard and the type of proceeding. In the common law provinces, the evidentiary burden of proof in civil cases is the balance of probabilities; the court evaluates all the evidence to determine whether, in all the circumstances, it is more probable than not that the fact occurred as alleged.

For interlocutory (or non-final) matters, including applications for summary judgment, the parties file affidavit evidence and transcripts of the cross examinations on those affidavits. In summary judgment hearings, the courts also have discretion to hear viva voce evidence (that is, evidence by way of oral testimony) motions in limited circumstances.

If the matter proceeds to trial, viva voce evidence and relevant documents will be tendered once proved by agreement or through witnesses.

9.2 Is expert evidence accepted in your jurisdiction? If so, how are the experts typically appointed and what input or influence (if any) do the parties have in this regard?

Expert evidence is often crucial in product liability cases, as it can speak to:

• whether a reasonable alternative design exists;
• whether a defect exists;
• whether it caused the injury in question;
• the nature and extent of risk associated with a product; and
• whether the warnings in question were adequate in light of that risk.

In matters calling for special knowledge or skill, judges and jurors are not necessarily equipped to deal with such issues. Each litigant puts forth the experts they intend to rely on to assist the court in this respect. The experts are then questioned on their qualifications and whether they meet the threshold requirements to provide expert testimony.

A witness is only allowed to state his or her opinion about relevant matters that the court requires special assistance with if he or she is qualified as an expert in that domain. This expertise may be obtained through experience, training or study, or some combination thereof. Failing this threshold requirement, the evidence will not be admitted and thus not considered.

Further, expert witnesses have a duty to the court to give fair, objective and non-partisan opinion evidence. If they do not meet this threshold requirement, their evidence will not be admitted. If threshold admissibility is achieved, the court still has the ability to weigh expert evidence in light of the degree of the witnesses' expertise and impartiality.

In Quebec, expert reports are commonly relied upon in product liability cases. Although uncommon, experts are sometimes authorised by the court to provide testimony where the evidence is particularly complex or the court would benefit from further explanation. In Quebec, the use of joint experts is encouraged.

9.3 What are the specific implications of the rules on evidence in product liability suits?

No answer submitted for this question.

10 Court proceedings

10.1 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Canadian courts operate on the open court principle, which generally requires that such proceedings, the materials in the record before the court and the resulting decision must be open and accessible to the public, unless the court otherwise orders. Every court has a supervisory and protecting power over its own records. Access can be denied when the ends of justice would be subverted by disclosure or the documents might be used for an improper purpose. Stated another way, the court must balance the benefits and harms of limiting the open court principle in each case. The presumption, however, is in favour of public access and the burden of contrary proof lies upon the person who would deny the exercise of the right.

10.2 How do product liability suits typically unfold in your jurisdiction?

No answer submitted for this question.

10.3 What is the typical timeframe for product liability suits in your jurisdiction?

No answer submitted for this question.

10.4 Are alternative dispute resolution procedures (eg, mediation, arbitration) often used in product liability cases in your jurisdiction? Are these encouraged/mandated by the courts?

Some provinces require the parties to attend mediation as one step of the litigation process. Where it is not mandated, parties can agree to attend private mediation to facilitate settlement discussions at any time in the course of litigation.

In addition to mediation, arbitration provisions can sometimes be enforced to compel parties to resolve their disputes through binding arbitration. The enforceability of arbitration provisions is influenced by provincial and territorial legislation, which differs somewhat across jurisdictions. However, there are some common principles in common law jurisdictions regarding when arbitration provisions can be enforced.

• Voluntary agreement: The parties must have voluntarily agreed to the arbitration provision. This can be in the form of a written contract or a separate arbitration agreement.
• Scope of the provision: The dispute or issue must fall within the scope of the arbitration provision. If the dispute is unrelated to the matters covered by the provision, the court may decline to enforce it and allow the parties to pursue litigation instead.
• Validity: The arbitration provision must be valid. The court will assess whether the provision is unconscionable or void and inoperative. For example, if the provision is deemed to be the result of a significant power imbalance between the parties and/or is prohibitively complicated and expensive, a court may refuse to enforce it.
• Compliance with formal requirements: The arbitration provision must meet any formal requirements specified by the applicable legislation. This can include the provision:
• • being in writing;
  • signed by the parties; and
  • containing the necessary information required by the legislation.
• Limited exceptions: There may be limited exceptions under provincial or territorial legislation where certain disputes are not arbitrable. Provincial consumer protection legislation typically gives consumers a right to go to court, even if their consumer contract contains an arbitration agreement.

In Quebec, parties to an eventual litigation are obligated to consider alternative dispute resolution methods before bringing an action.

11 Remedies

11.1 What remedies are available in product liability suits in your jurisdiction?

The remedies available to plaintiffs in product liability suits can vary depending on the specific jurisdiction and the type of claim being pursued. However, generally speaking, the most common remedies available in product liability suits in Canada include the following:

• Compensatory damages: These are monetary awards meant to compensate the plaintiff for any losses or injuries suffered as a result of the defective product. Compensatory damages may include:
• • medical expenses;
  • lost income;
  • the cost of future care;
  • loss of earning capacity; and
  • pain and suffering.
• Aggravated damages: These are a specific branch of compensatory damages and take account of intangible injuries. Aggravated damages are compensatory in nature and address additional harm caused to the plaintiff's feelings by high-handed, reprehensible or outrageous conduct on the part of the defendant. The types of additional harm for which aggravated damages are typically awarded include:
• • loss of dignity;
  • humiliation;
  • additional psychological injury; and
  • harm to the plaintiff's feelings.
• Punitive damages: In some cases, a plaintiff may be entitled to punitive damages if the defendant's conduct was particularly egregious. Punitive damages are meant to punish the defendant and deter similar conduct in the future.
• Injunctions: In some cases, a plaintiff may seek an injunction to stop the defendant from continuing to produce or distribute a defective product.
• Product recall: If a product is found to be defective or dangerous, the manufacturer may be required to issue a recall to notify consumers of the danger and remove the product from the market.
• Rescission or cancellation of contract: If a plaintiff has entered into a contract for the purchase of a defective product, he or she may be entitled to cancel or rescind the contract and seek a refund.

11.2 What categories of damages are recoverable?

No answer submitted for this question.

11.3 Are punitive damages awarded in your jurisdiction?

No answer submitted for this question.

11.4 What factors will the courts consider in deciding on the quantum of damages when liability is established?

In 1978, the Supreme Court of Canada instituted a ceiling of C$100,000 on the available damages for non-pecuniary general damages (pain and suffering). However, the ceiling is adjusted to reflect the impact of inflation. Currently, the general damages ceiling in Canada is approximately C$415,000. The purpose of general damages is to compensate the plaintiff for:

• loss of amenities of life;
• pain and suffering;
• disfigurement; and
• loss of expectation of life.

The quantum of damages is determined according to factors such as:

• age;
• the nature of the injuries;
• the severity and duration of pain;
• disability;
• emotional suffering;
• loss of enjoyment of life; and
• impairment of family.

Special damages such as loss of earnings, medical expenses, lost housekeeping ability and related assistance are dependent on:

• causally connecting the expenses to an injury caused by the defendant's negligence; and
• the ability of the plaintiff to compile and present evidence of such damages.

There is neither a ceiling nor a formulaic or fixed approach to awarding punitive damages in any given case. The foundational rule for assessing the quantum of a punitive award is proportionality. Compensatory damages plus punitive damages and any other punishment related to the same misconduct should be rationally related to the objectives of awarding punitive damages – namely retribution, deterrence and denunciation.

12 Appeals

12.1 Can the court's decision in in the product liability suit be appealed? If so, on what grounds and what is the process for doing so?

All Canadian jurisdictions provide for an appellate court to review decisions made on the merits either at trial or by summary judgment at the provincial superior court level. From the appellate court, parties may seek leave to appeal at the Supreme Court of Canada, Canada's court of last resort. To the extent that the appeal involves a question of law arising from the decision, the standard of review is 'correctness'. Under this standard, the appellate court owes no deference to the lower court; it engages in a fresh analysis of the legal issue and will substitute its own decision if it disagrees with the lower court.

Questions of fact or mixed fact and law that do not raise an extricable question of law are to be reviewed on a standard of 'palpable and overriding error'. This standard provides for deference to the lower court's findings of fact, recognising that the trial judge has an advantage in assessing witness credibility and observing the evidence. The appellate court will intervene only if it finds that the lower court made an error that is obvious and has had a significant impact on the outcome of the case. The appellate court will not simply substitute its own findings of fact unless there is a clear error.

However, where an error of mixed fact and law can be attributed to the application of an incorrect standard, a mischaracterisation of a legal test or a similar error in principle, that is an error of law, reviewable on a correctness standard of review.

There are numerous potential grounds of appeal in product liability actions, including:

• whether the correct legal test was applied;
• whether an expert had sufficient expertise; and
• whether there was sufficient evidence of the necessary causal connection.

13 Costs and fees

13.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?

No answer submitted for this question.

13.2 How are the costs and fees allocated among the parties?

No answer submitted for this question.

13.3 What happens if the claim is withdrawn before the proceedings have finished?

No answer submitted for this question.

13.4 Do the courts manage costs during the proceedings?

No answer submitted for this question.

13.5 How do the courts assess the costs and fees at the end of the proceedings?

No answer submitted for this question.

14 Funding for product liability suits

14.1 Is legal aid available for product liability cases in your jurisdiction? If so, what requirements and restrictions apply in this regard?

Public legal aid programmes are limited to criminal matters.

14.2 Are contingency fees and similar arrangements permitted in your jurisdiction in product liability cases? If so, what requirements and restrictions apply in this regard?

Contingency fee agreements are now expressly permitted by the law societies of most provinces and are permitted, with some limitation, in many civil claims, including most class actions, personal injury and product liability actions. However, these arrangements must comply with the rules of the legal profession in each province, and their enforcement remains subject to court supervision.

14.3 Is third-party funding permitted in your jurisdiction in product liability cases? If so, what requirements and restrictions apply in this regard?

The Supreme Court of Canada has ruled that third-party litigation funding is not inherently unlawful and may be suitable in some, albeit limited, situations.

In some provinces, Canadian courts have recognised the role of third-party litigation funders, especially in insolvency and class actions, where alternative funding sources are likely to be inaccessible. Parties wishing to engage in litigation funding must first seek approval from the court. Additionally, such funding arrangements must be disclosed to the defendant.

15 Product safety regimes

15.1 What rules and regulations govern product safety in your jurisdiction?

The federal and provincial governments share jurisdiction over product regulation. While there is no single governmental entity that regulates all products in Canada, most consumer products are now subject to a relatively small handful of product-specific regulators in different industries.

Federal departments regulate areas such as:

• food and consumer products;
• hazardous products;
• pest control products;
• drugs and medical devices;
• health products;
• motor vehicles;
• maritime; and
• aviation.

Provincial regulatory bodies oversee various products and areas that are regulated provincially, such as:

• consumer protection;
• electrical systems;
• certain machinery and equipment; and
• buildings and construction.

The legislation that creates these regulatory bodies also defines their scope and authority. Most regulators act as law enforcement agencies and can:

• enforce regulations;
• prohibit transactions;
• order mandatory steps, such as recalls and consumer notices;
• search and seize to verify compliance; and
• seek criminal or quasi-criminal fines and punishment for non-compliance.

Primary federal regulators include:

• the Canadian Food Inspection Agency;
• Health Canada; and
• Transport Canada.

15.2 Do any special regimes apply in specific sectors?

See question 15.1.

15.3 Which bodies are responsible for enforcing these rules and regulations? What is their general approach in doing so?

See question 15.1.

15.4 What are the penalties for failing to comply with applicable product safety rules?

No answer submitted for this question.

16 Product safety issues and product recalls

16.1 Under what circumstances must a product be recalled in your jurisdiction?

Most Canadian regulators have power to order a supplier to stop selling a product in Canada. In addition, an increasing number of product regulators have statutory power to order suppliers of products to recall products which they believe pose a risk to health and safety. For example:

• Health Canada (on behalf of the minister of health) has the power to order a recall of drugs and medical devices if it determines that the product presents a serious or imminent risk of injury to health;
• the Canadian Food Inspection Agency (on behalf of the minister of agriculture) has the power to order a 'recall of food products'. This consists of a five-step process, including:
• • a trigger;
  • an investigation;
  • a risk assessment
  • the recall; and
  • a follow-up;
• the Consumer and Hazardous Products Safety Directorate of Health Canada (on behalf of the minister of health) has the power to recall various consumer products if it believes on reasonable grounds that the product is a danger to human health or safety; and
• Transport Canada (on behalf of the minister of transport) has the power to order recalls of motor vehicles and certain motor vehicle components.

16.2 Are there obligations to report product safety issues or product recalls to the regulatory authorities? Who bears those responsibilities? What are the details of the requirements? What penalties apply for failure to comply?

Many product statutes and regulations have mandatory reporting obligations, including statutes governing aircraft, ships, motor vehicles, consumer products, drugs, medical devices, and food, among other products.

The specific trigger, timing and manner of reporting depend on the product and the statute. There is a general requirement for manufacturers and in some cases other parties to report incidents and other problems which may reasonably pose a risk to human health or safety.

If a party that is required to report fails to do so, the regulator can seek to prosecute the non-compliant party or take other remedial steps available to the regulator under its statute.

In addition to statutory monetary penalties for non-compliance, failure to follow statutorily mandated reporting procedures could result in unfavourable treatment by a judge or arbitrator at the standard of care stage in a negligence action.

16.3 What other rules and requirements apply to product recalls? Do these vary between voluntary and mandatory recalls?

No answer submitted for this question.

16.4 What other types of corrective action are typically taken in your jurisdiction where a product is found to be defective?

No answer submitted for this question.

16.5 What best practices should be borne in mind in relation to product safety in your jurisdiction?

No answer submitted for this question.

17 Criminal liability

17.1 Can parties be found to be liable under criminal law for defective products in your jurisdiction? (a) Which parties can be held responsible? (b) Can individual officers or employees be held responsible? (c) What is the basis for liability? (d) What penalties can be imposed?

No answer submitted for this question.

17.2 Are there any examples of the criminal law being used in your country in cases involving defective products?

No answer submitted for this question.

18 Trends and predictions

18.1 Have any significant product liability and/or product safety cases been reported in your jurisdiction in the past five years? What were the details and why are they significant?

In recent years, the Canadian courts have pushed back against claims relating to risk of future harm arising from exposure to alleged defective products. The courts have affirmed that seeking damages for harms arising from an increased risk or the possibility of future adverse effects is fatally flawed. The creation of a risk without a manifested causally connected injury does not amount to compensable wrongful conduct except in cases where there is an imminent danger or threat to an individual's personal safety or property.

Therefore, anxiety arising from an increased risk or a possible future adverse effect does not rise to the level of compensable psychological injury. Compensable psychological injuries are those which reach the level of serious trauma or illness as opposed to the ordinary annoyances, anxieties and fears that people living in civil society must routinely accept.

This is illustrated in Palmer v Teva Canada Ltd, 2022 ONSC 4690 and Dussiaume v Sandoz Canada Inc, 2023 BCSC 795. The representative plaintiffs claimed that two medicines contained a compound that allegedly increased the risk of cancer. The courts determined that this was insufficient to support claims seeking costs for medical monitoring and psychological damages when the class did not claim that any member had actually been diagnosed with cancer.

Pure economic loss claims, which are based in the law of negligence, remain viable where defective products carry an imminent danger to an individual's personal safety or property. Recoverable losses are restricted to:

• the expense or having a dangerous product removed from use and repaired; or
• the expense of having to discard the dangerous product from use.

Because manufacturers and distributors may be liable for these expenses under a pure economic loss claim, it may be becoming increasingly more cost-effective to issue a recall in these situations as opposed to facing litigation.

In Coles v FCA Canada, 2022 ONSC 5575, recalls were issued for defective air bags that had caused death in other countries. Although no such incidents had been recorded in Canada, the court accepted that the air bags still carried an imminent and dangerous risk sufficient to support a viable cause of action and common issues.

However, the defendant had instituted a recall programme with oversight from Transport Canada which offered free replacement of the air bags. The court found this programme to be preferable to proceeding by way of class action and therefore denied class certification. The court also noted that previous settlements from vehicle manufacturers that provided compensation over and above recall programmes were likely "overachievements", noting that without a claim for sustained personal injury, a claimant could not expect to obtain more than free replacement of the defective component by the manufacturer.

Some of these settlements occurred prior to the Supreme Court clarifying and solidifying the law of pure economic loss in 2020, with the decisions in 1688782 Ontario Inc v Maple Leaf Foods Inc, 2020 SCC 35 and Atlantic Lottery Corp Inc v Babstock, 2020 SCC 19. In reliance on those decisions, the court in Coles concluded that recall programmes which provide free repairs would appear to cover off responsibility to pay compensatory damages for liability for manufacturing and distributing vehicles with a dangerous automotive part where no personal injuries had been sustained.

Following Coles, plaintiffs in two proposed class actions involving defective automotive parts obtained court approval to discontinue their claims. In Baggio v General Motors of Canada Limited, 2023 ONSC 3019 and Piccolo v General Motors of Canada Limited, 2023 ONSC 3018, the court noted in both cases: "In light of the recent changes to the law and the diminished prospects for economic value in this proposed class action, the Plaintiffs and their counsel decided that they were no longer prepared to take on the risks of prosecuting this proposed class action."

The importance of regulatory requirements was also recently highlighted in Burr v Tecumseh Products of Canada, 2022 ONSC 412 [Burr], aff'd 2023 ONCA 135 in relation to the determination of the reasonableness of warnings following detection of the potential for engine fire in a heat recovery ventilator. The court found that the defendant had met its obligations under the Electrical Safety Authority's reporting requirements; and due in part to this compliance, it had properly warned consumers of the potential failure as required by the law of negligence.

While meeting regulatory requirements has never been considered to qualify as an automatic complete defence, it may be highly influential in certain circumstances. Burr also demonstrates that meeting applicable safety regulations can also assist in defending the reasonableness of a product design.

18.2 How would you describe the current product liability and product safety landscapes and prevailing trends in your jurisdiction?

See question 18.1.

18.3 What new developments are anticipated in the next 12 months, including any proposed legislative reforms to the product liability and/or product safety regimes?

No answer submitted for this question.

19 Tips and traps

19.1 What are your top tips for avoiding product liability and product safety issues in your jurisdiction, and what potential sticking points would you highlight?

No answer submitted for this question.

Ethan Howitt contributed to this Guide.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.