CANADA Trends and Developments Contributed by: David Gadsden, John Pirie, Brendan O’Grady and Anton Rizor, Baker McKenzie
contracts of adhesion in the employment context remains for another day”. The scope of the appeal was therefore limited to the certification analysis for the DA group who had not signed arbitration agreements or who benefited from a Section 7 (6) waiver in their arbitration agreements. The central issue on appeal was whether Amazon could be considered a “common employer” of the DAs, who were formally employed by 126 separate DSPs. The appellant argued that Amazon exercised significant control over the DAs through its Flex App, which directed delivery routes, tracked performance and monitored compliance, and accordingly that there was a common employment relationship. The Ontario Court of Appeal rejected this argu- ment, affirming the motion judge’s conclusion that the common employer doctrine could not apply and that accordingly the appellant’s claim was “doomed to fail”. Relying on O’Reilly v ClearMRI Solutions Ltd , 2021 ONCA 385, the Court of Appeal upheld the lower court’s finding that the appellant failed to plead facts showing a sufficient degree of interrelationship or shared control between Amazon and the DSPs, or that the drivers could have reasonably believed that Amazon was a party to their employment contracts. The DSPs operated independently, and Amazon’s role was limited to setting performance standards as a cli- ent of the logistics companies. The Ontario Court of Appeal also confirmed that the absence of the DSPs as co-defendants was fatal to the claim. The motion judge had found that the DSPs were necessary parties, given their direct employ- ment relationships with the DAs and their role in any alleged breaches. While the appellant argued that documentary production could be obtained from the DSPs without naming them as defendants, the Court of Appeal held that the outcome of the litigation would affect their rights and liabilities, making their joinder essential. The appellant further argued that the use of the Flex App constituted a common issue. The Court of Appeal also rejected this argument, finding that the DSPs did not use or manage the App uniformly, and that the drivers’ interactions with the App varied significantly.
As a result, there was no basis in fact to support com- monality. The Court of Appeal upheld the motion judge’s finding that the proposed class action was not the preferable procedure. The judge had characterised the DA claims as effectively 126 discrete class actions joined togeth- er, rendering the proceeding unmanageable. Even if the common employer doctrine had been viable, the lack of commonality and the complexity of the rela- tionships undermined the efficiency and fairness of a class proceeding. Ultimately, the Court found no reversible error in the lower court’s certification analysis and dismissed the appeal. Product liability class actions Canadian Courts regularly hear product liability class actions. These claims often allege that products were negligently designed or manufactured, and/or that the manufacturer failed to warn a consumer of the risks associated with the product. A significant point of contention in product liability class actions concerns whether the claims seek legally compensable harm. If they do not, courts can decline to certify the class action. For example, in North v Bayerische Motoren Werke AG , 2025 ONCA 340, the Ontario Court of Appeal overturned an order to certify a proposed class action, concluding that the claim was for pure economic loss and not recoverable. The case highlights the distinc- tion between a pure economic loss claim and a tradi- tional negligence claim. In this case, the plaintiffs commenced a proposed class action in negligence against several BMW enti- ties. The plaintiffs alleged that BMW vehicles contain- ing N20 engines lost power because the chain assem- bly system failed, resulting in catastrophic damage to the vehicles’ engines. The plaintiffs sold their vehicles “as is” instead of repairing them. The plaintiffs alleged that the defendants’ negligence in designing, engi- neering, testing and manufacturing the N20 engine resulted in damage to the plaintiffs and the proposed class, including the costs of averting the real, sub- stantial and imminent danger of personal injury by
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