Background
Aviva offered “Triple Guard” business-interruption policies to dentists and dental corporations through CDSPI Advisory Services Inc. Policyholders alleged that Aviva unlawfully cancelled their right to increase pandemic-outbreak coverage in March 2020 and that CDSPI failed to inform them promptly of that option. The dispute generated individual actions against CDSPI, separate actions against Aviva, and a class action against both companies.
CDSPI separately settled with the individual plaintiffs and reached a proposed class settlement under which it would provide documents, evidence, and other cooperation in exchange for a full release. Aviva received the class settlement when it was signed and later received the individual settlements. It opposed approval and sought permanent stays, arguing that delayed disclosure constituted an abuse of process under the former partial-settlement rule. The Superior Court approved the class settlement, denied the stays, and awarded costs against Aviva.
The Court’s Holding
The Court of Appeal dismissed Aviva’s appeal. It held that Ontario’s Class Proceedings Act supplies the applicable disclosure and approval regime for class settlements, displacing both the former rule in Handley Estate and the general partial-settlement provisions of Rule 49.14. Because a class settlement is not binding before court approval, notice and disclosure through the approval process protect non-settling parties. Aviva received timely disclosure and a full opportunity to oppose the proposed settlement.
Aviva had no right to disclosure of CDSPI’s settlements in actions to which Aviva was not a party. In any event, Aviva knew of both sets of settlements before the approval hearing and addressed them there, so no abuse of process, deceit, or concealment was established. The court also upheld the settlement’s bar order because CDSPI’s $10 million insurance fund would be exhausted by the individual settlements, leaving Aviva’s theoretical contribution rights with no practical economic value. It declined leave to appeal the motion judge’s discretionary costs order.
Key Takeaways
- Class-action settlement disclosure is governed by the Class Proceedings Act’s court-approval process, rather than Ontario’s general partial-settlement rule.
- A litigant ordinarily has no right to disclosure of a settlement reached in a separate action to which it is not a party, even when the proceedings are factually connected.
- Neither abuse of process nor a stay is automatic for delayed settlement disclosure; courts apply a flexible, proportionate analysis after the overruling of Handley Estate.
- A bar order may be approved despite limiting contribution claims where those claims have no realistic economic value and the settlement remains within the zone of reasonableness.
Why It Matters
The decision clarifies how Ontario’s revised law on partial-settlement disclosure operates in class proceedings. Non-settling defendants receive protection through the statutory approval process, but cannot invoke general disclosure rules to demand an automatic stay or reach into settlements from separate cases.
It also confirms that courts will assess practical prejudice when reviewing bar orders and alleged abuses of process. Theoretical limits on litigation rights will not necessarily defeat a class settlement where the affected rights have little or no realizable value.