Waiver of Tort: Remedy without a Right?

The law of remedies has often been approached as an afterthought: “Once the question of

liability was established, it was assumed that the appropriate remedy automatically presented

itself as a reflexive outcome of the substantive law.”1 But remedies are guided not simply by

quantification of damages, but by examining the types of interests the law seeks to protect. In

contract law, for example, the interest protected is the parties’ legitimate expectation that a

contract, once concluded, will be performed. Thus damages for breach of contract are measured

by a party’s expectation interest in the performance of the contract, often an amount the party

would have realized if the contract had been performed.

In tort law, restitution is guided by the principle of restitutio in integrum, restoring the plaintiff to

the position he or she would have been in but for the wrong committed by the defendant.

Restitution damages protect the party’s reliance on the actions of others. Reliance damages, as

the term suggests, imply a relationship between the parties, and thus a finding of negligence

depends on an analysis of the standard categories of duty of care, proximity, forseeability and

loss. It must be kept in mind that remedies that flow from breaches of contract or duties must be

fair to both plaintiffs and defendants. Plaintiffs are entitled to compensation or to expectation

damages; they are not entitled to speculative or remote damages or windfall gains.

The recent debate surrounding the doctrine of waiver of tort has attracted the attention of legal

scholars, practitioners and the courts as it raises fundamental questions about the purpose of tort

law itself, what interests are being protected, and the limits of compensation. The ancient

doctrine is receiving a new lease on life in the class action context. Canadian courts have
1
Cassels, J., and Adjin-Tetty, E., “Remedies: The Law of Damages”, University of Victoria Press, 2008 at p. 2
 2

regularly been certifying class actions containing waiver of tort claims, leaving for trial the

questions surrounding the content of and precise conditions for application of the doctrine.

This paper will begin by introducing the doctrine and examining its evolution; some recent case

law, and the approach of the courts to treating waiver of tort claims at the certification stage will

be discussed. The paper will then situate the debate over waiver of tort within the broader

context of the development of class action litigation in Canada and will consider policy

arguments for and against the expansion of waiver of tort. Finally, the paper will discuss

Anderson v. St. Jude Medical,2 the first trial level decision considering waiver of tort, wherein

Madam Justice Lax questioned whether determining the application of waiver of tort in a

particular case required a full evidentiary record at trial. The paper will conclude by arguing that

the courts’ accommodating approach to waiver of tort claims unmoors these claims from the

traditional basis of compensation in tort, introducing the possibility of indeterminate liability and

windfall gains.

History of Waiver of Tort

Historically, the doctrine of waiver of tort operated to allow a plaintiff to elect disgorgement of

gains arising from the defendant’s wrongful conduct, as opposed to restitutionary damages. In

cases where, for example, a plaintiff’s property was wrongfully interfered with by the defendant,

resulting in little or no damage, but a gain to the defendant, the plaintiff could elect not to pursue,

or waive, the tort claim, and seek a disgorgement of the defendant’s profit from the wrongful use

of the plaintiff’s property.

2
Anderson v. St. Jude Medical, (2012) ONSC 3660 (“Anderson”)
 3

The underlying theory of the doctrine was that the plaintiff treated the defendant as his agent,

ratified the use of the property, and elected receipt of the profit gained from the use thereof.

Thus a plaintiff would have to elect to waive the tort, in effect approving the conduct of the

‘agent’, and giving up the right to pursue a tort claim. In United Australia Ltd. v. Barclays Bank

Ltd., [1941] A.C. 1 (H.L), the House of Lords rejected both the “implied contract” theory of

restitution and the need to elect between alternative remedies. In United Australia, United

Australia brought an action for conversion against Barclay’s Bank on account of a cheque the

bank had wrongfully endorsed to another customer. The action was only brought against

Barclay’s after United Australia discovered it was unable to pursue the recipient of the funds in a

proprietary claim for money had and received. The Court of Appeal upheld the trial level

decision, holding that United Australia had given up the right commence an action in tort since it

had earlier elected to proceed by way of waiving the tort and seeking money had and received.

The House of Lords reversed the Court of Appeal, rejecting both the need to elect and the

implied contract theory, holding that: “…in the ordinary case, the plaintiff never has the slightest

intention of waiving, excusing or in any kind of way palliating the tort…These fantastic

resemblances of contracts invented in order to meet the requirements of the law as to forms of

actions which have now disappeared should not in these days be allowed to affect actual rights.”3

As to the election issue, Lord Atkin held:

Concurrently with the decision as to waiver of tort there is to be found a

supposed application of election: and the allegation is sometimes to be found
that the plaintiff elected to waive the tort. It seems to me that in this respect it
is essential to bear in mind the distinction between choosing one of two
alternative remedies, and choosing one of two inconsistent rights. As far as
3
United Australia Ltd. v. Barclays Bank Ltd., [1941] A.C. 1 (H.L) at p.6
 4

remedies were concerned, from the oldest time the only restriction was on the
choice between real and personal actions. If you chose one you could not
claim the other. Real actions have long disappeared: and, subject to the
difficulty of including two causes of action in one writ which has also now
disappeared, there has not been and there certainly is not now any compulsion
to chose between alternative remedies.4

Thus, following United Australia, waiver of tort was available as an alternative remedy without

the need for election. However, there was no suggestion that waiver of tort was a cause of action

in itself or that it was available in pleadings of negligence as opposed to intentional torts or

proprietary torts.

In Canada, the general principles regarding waiver of tort had received little attention by the

courts prior to Serhan v. Johnson & Johnson (2006), 269 D.L.R. (4th) 279 (“Serhan”)5, which

will be discussed in more detail below. Waiver of tort was generally treated as a form of a plea

for unjust enrichment, with the elements of unjust enrichment needing to be made out.6

An example is Zidaric v. Toshiba of Canada Ltd., a case which involved a claim that Toshiba

had avoided paying certain license fees to replace defective computer code and continued to sell

computers containing the defective code to the public. The plaintiffs sought a disgorgement

remedy based on waiver of tort of profits Toshiba earned by having avoided paying the license

fees. Cummings J., stated that:

The plaintiff seeks the alleged profits of TCL…The plaintiff submits that such
profits should be disgorged “as a waiver of tort or unjust enrichment.”
However, the so-called “waiver of tort doctrine” is inapplicable unless the
defendant has committed a tort which gives rise to a cause of action to the

4
Ibid at p.8
5
See the coments of Cullity J., in Heward v. Eli Lilly & Co., [2007] O.J. No.404 (S.C.J.) at para.25
6
Namely: deprivation of the plaintiff corresponding to the defendant’s enrichment, and no juridical reason for same.
Pettkus v. Becker, [1980] 2 S.R.R. 834
 5

plaintiff. I find there is no reasonable cause of action in tort disclosed by the

pleadings. Further, the waiver of tort doctrine is inapplicable unless the
defendant is unjustly enriched. Where the claim is in negligence, as here, the
defendant does not acquire a benefit. There is no unjust enrichment to the
defendant. See G.H.L. Friedman, Restitution 2nd ed. (Toronto: Carswell,
1992) at 355-59; United Australia Ltd. v. Barclays Bank Ltd., [1941] A.C. 1
(U.K. H.L) at 11-19 per Viscount Simon.7

Thus the position in Canada appeared to be that invoking waiver of tort required proof of the

underlying tort, and perhaps as well establishing the elements of unjust enrichment: deprivation

of the plaintiff, a corresponding benefit to the defendant, and no juridical reason for same.

Canadian Developments: Serhan v. Johnson & Johnson and Heward v. Elli Lilly

If waiver of tort was to operate as an alternative restitutionary remedy, it is understandable that

the courts would seek to remove the anachronistic strictures from the doctrine, such as the

implied contract theory and the need for election. However, in Canada, the recent trend,

introduced since Serhan, appears to be to broaden the doctrine into not simply a restitutionary

remedy, grounded on proof of an underlying tort, but a cause of action in itself, in which the

underlying element of the tort, including loss, do not have to be established. Such an approach

carries broad implications for tort law and class action law.

The recently settled case of Serhan, which settlement will be discussed in more detail below, was

the first class action in Canada to certify waiver of tort as a common issue. Serhan involved

claims of negligence, negligent misrepresentation, conspiracy, and breach of the Competition Act

R.S.C., 1985, c. C-34 in relation to Johnson & Johnson’s manufacture, distribution and sale of

diabetic blood testing kits for home use. There was evidence that the blood testing kits contained

7
Zidaric v. Toshiba of Canada Ltd., [2000] O.J. No.4590 (Sup.Ct.) at para.14
 6

certain design flaws that led to errors in reporting blood glucose levels to their users. According

to the court, the error rate was less than 1.5% and the defendants corrected the design error and

instituted a voluntary recall of the blood testing kits. In addition, there was no evidence that

anyone had been injured as a result of the design error in the product.

Cullity J. certified waiver of tort as a common issue in the action. It is notable that none of the

tort claims were certified. Regarding the negligence and conspiracy claims, Cullity J. held that

these issues required individual proof of causation and loss, and were not suitable for

certification as a result.8 The motion judge also held that the issue of the plaintiffs’ reliance on

the representations made by the defendant was an individual issue that could not be dealt with on

a class-wide basis and was therefore unsuitable for certification.9

Regarding waiver of tort, Cullity J. held that it might be the case that if “no proof of loss

is required for restitutionay remedies available in cases of waiver of tort, the defedants

may be found liable to disgorge all or part of the benefits they received from marketing

the products.”10 The court went on to state:

It has been held more than once that a motions judge should be slow to
strike novel causes of action or those in an area of the law that is unsettled,
8
Serhan at para.56
9
The leading case on negligent misrepresentation, which articulated the test requiring proof of reliance on the
misrepresentation by the plaintiff, was Queen v. Cognos Inc., [1993] 1 S.C.R. 87. Interestingly, class actions in
which individual reliance was not pleaded or could not be established have been certified. See, for example, Dobbie
v. Arctic Glacier Income Fund et al., [2011] ONSC 25; Silver v. Imax [2009], 66 B.L.R. (4th) 222; see also, Lascaris,
Dimitri, A., and O’Brien, Anthony, Certification of Reliance-Based Claims in Class Action, Siskinds LLP, April 30,
2010. The certification of negligent misrepresentation claims without establishing reliance, and the certification of
waiver of tort claims without proof of loss or an underlying tort, raise interesting policy questions about the courts’
approach to class action litigation as a whole.
10
Serhan at para.65
 7

or undergoing significant change or development. In my opinion, the law

relating to waiver of tort falls within each of these categories. In particular,
although there are many cases in which remedies have been granted on the
basis of the “doctrine” of waiver of tort, its scope, and the extent to which it
reflects general principles, have not, as far as I am aware, received
authoritative analysis in Canadian appellate courts.11

The defendants appealed to the Divisional Court. The court undertook an extensive analysis of

the history of the waiver of tort doctrine and the conflicting authorities and academic treatment

of the issue. The “much debated question” was whether “it it is necessary to establish all of the

constituent elements of an actionable tort as a prerequisite to invoking the doctrine.”12 If so, a

claim based on waiver of tort would have to establish all of the constituent elements of the

underlying tort, including loss, before a disgorgement remedy could be sought.

On the other hand, if waiver of tort can be asserted as an independent cause of action,

disgorgement could be a possible remedy based only on proof of wrongful conduct, without

necessarily establishing that the plaintiff had suffered a loss, as was the case in Serhan.

According to Epstein J., writing for the majority: “the importance of the issue of whether or not

waiver of tort is an independent cause of action is that the court below concluded that this action

may be grounded in wrongful conduct of the defendants in the form of conspiracy, without need

to make out all the elements of a conspiracy, and notably proof of loss.”13

Citing the uncertain state of the law regarding waiver of tort, the court dismissed the appeal,

holding that:

11
Serhan at para.38
12
Serhan Estate v. Johnson & Johnson, (2006) 269 DLR (4th) (Div. Crt.) at para.49 (“Serhan appeal”)
13
Ibid at para. 53
 8

In all of these circumstances, I agree with Cullity J. that it cannot be said, in

this case, that it is plain and obvious that this claim will fail. The plaintiffs
may well face an uphill battle, but they should not be deprived of the
opportunity to prove their case at trial. On the assumption that a legal
obligation may exist, this class proceeding is suited for certification based
on the common issues identified by Cullity J.14

Justice Chapnick dissented from the result, holding that it was plain and obvious that a waiver of

tort claim would fail on the facts of the case.

Cullity J., had opportunity to once again consider the application of waiver of tort in Heward v.

Eli Lilly & Company15, an action claiming damages for negligence, or disgorgement of revenues

based on unjust enrichment or waiver of tort as a result of the defendants failure to warn of

certain side effects associated with the use of their anti-psychotic medication. The court certified

the negligence claim, as all of the material elements of the claim had been made out.

Regarding waiver of tort, the court held that the questions to be answered were: “One is whether

all the elements of an actionable tort must be proven - including a loss or injury; the other relates

to the torts - or the tortious circumstances - in which the election between the remedies will be

available.”16 As to the second issue of which type of tortious circumstances waiver of tort

applied to, the court stated the question as whether election between compensatory damages and

disgorgement “is permitted only in the case of certain torts - such as, for example, intentional

torts or those that affect a plaintiff's proprietary interests - or whether it will be available, at least

prima facie, whenever a defendant was enriched as a result of its tortious conduct.”17

14
Ibid at para.159
15
Heward v. Eli Lilly & Company, (2007) CanLII 2651 (ON SC) (“Eli Lilly”)
16
Ibid at para.28
17
Ibid at para.30
 9

On the first question of requirement to prove all elements of the underlying tort, the court held

that it was bound by the decision of the Divisional Court in Serhan¸ and that it was unnecessary

on the present state of the authorities to plead that a loss occurred to ground a pleading of waiver

of tort. The court then considered the question of whether waiver of tort is available in cases of

negligence, as opposed to its traditional use in cases of intentional torts, such as the proprietary

torts of conversion, detinue, and trespass to land and goods. The court cited Epstein J.’s

comments in Serhan, wherin the court noted that “Restitutionary claims are not made in

negligenec and nusiance because they are in the main anti-harm wrongs in relation to which it is

impossible, even if they lead to an enrichment of the wrongdoer, to elevate the prevention of

enrichment to the level of a primary purpose.”18

In the Serhan appeal, the question of whether waiver of tort applied to so-called anti-harm

wrongs such as negligence was not addressed, as the pleading of waiver of tort in that case did

not exclude its use for the torts of fraud and conspiracy. In Eli Lilly, however, the only pleading

was one of negligence, hence the issue of invoking waiver of tort in the context of a non-

proprietary, unintentional tort was squarely before the court.

Cullity J. questioned whether the distinction between anti-harm and anti-enrichment wrongs

described in academic commentaries was sound or supportable.

I am also far from satisfied that, for the purposes of this motion, I should
conclude that the proposed classification is sound. My principal difficulty is
that it is by no means clear to me how one is to determine whether the
primary purpose of a tort that has resulted in the enrichment of a defendant
requires it to be placed within one category or the other. If circularity is to
be avoided - and the terms "anti-enrichment" and "anti-harm" are not merely
labels that indicate that a disgorgement remedy will, or will not, be available

18
Serhan appeal at para.66
 10

- there must be some good reason of principle or policy that will enable torts
to be classified one way or the other.19

The court went on to consider whether a pleading of waiver of tort had to be grounded in unjust

enrichment and satisfy the three part test articulated in Pettkus v. Becker. The court concluded

that:

In the first place, I am not aware of any decisions that are binding on this
court in which the three-pronged test for unjust enrichment has been held to
apply to remedies based on waiver of tort; cf., Lewis v. Cantertrot
Investments Ltd., [2006] O.J. No. 1061 (S.C.J.); Pro-Sys Consultants Ltd. v.
Microsoft Corporation, [2006] B.C.J. No. 1504 (B.C.S.C) (in which Reid
was distinguished). Nor do I see why the test should necessarily be
considered to be any more appropriate than, for example, where a person is
held to account in equity for profits obtained through a breach of contract
(as in Attorney-General v. Blake), or an equitable wrong consisting of a
breach of a fiduciary duty of loyalty. [emphasis added]

In my opinion, it is not plain and obvious that a claim based on waiver of

tort must satisfy the three-part test for unjust enrichment. Whether it must do
so is a question that should be left to the trial.20

The motion judge concluded that the pleading of waiver of tort should be certified in the

circumstances and that it was not “sufficiently clear that a deliberate breach of a duty

of care must be regarded as a precondition for such a remedy.”21

Thus the position after Serhan and Eli Lilly is that waiver of tort can be pleaded as a cause of

action and does not require proof of all elements of the tort, including loss. In addition, waiver

of tort is not restricted to proprietary or intentional torts, and does not need to meet the three part

test for unjust enrichment. What has emerged from the case law is a disgorgement remedy for

wrongful conduct that does not require proof of loss or deprivation of the plaintiff.

19
Eli Lilly at para.39
20
Ibid at paras.37-38
21
Ibid at para.47
 11

Class Actions

The evolution of the doctrine of waiver of tort has to a great extent been the result of its

enthusiastic use in the class action context. Class action litigation has been expanding rapidly in

Canada, with 9 of 10 provinces having adopted class action legislation to regulate class action

proceedings before their courts.22 The arguments in favour of class action litigation are well

known: In a modern economy, where products, services and securities are often available to

consumers across a province, across the country or around the world, aggregating the claims of a

large number of plaintiffs who may have suffered common damages or losses provides benefits

in terms of cost and efficiency. Class actions provide access to justice by allowing plaintiffs to

aggregate what may be small claims that are not cost effective to litigate individually, thus

reducing costs and maximizing recovery. In addition, class actions can prevent a proliferation of

inconsistent judgments and preserve judicial resources by obviating the need for plaintiffs to

commence multiple litigation arising out of the same circumstances.

As a result of such policy arguments in favour of class action litigation, and perhaps a larger

social shift toward a preference for private enforcement, class action litigation has received a

generally receptive treatment by the courts and legislatures. Examples include legislative

changes that have prevented companies from imposing mandatory opt-outs from consumer

participation in class actions.23 Or the debate over multi jurisdictional classes, where the

22
The various provincial class action statutes are substantially similar; see for example the Ontario Class
Proceedings Act 1992, S.O. 1992 c.6
23
Ontario Consumer Protection Act 2002, Chapter 30 Schedule A s. 8: 8. (1) A consumer may commence a
proceeding on behalf of members of a class under the Class Proceedings Act, 1992 or may become a member of a
class in such a proceeding in respect of a dispute arising out of a consumer agreement despite any term or
acknowledgment in the consumer agreement or a related agreement that purports to prevent or has the effect of
preventing the consumer from commencing or becoming a member of a class proceeding. See also, Seidel v. Telus
 12

traditional bases of jurisdiction have been attenuated to accommodate multi-jurisdictional

classes.24 The expansive treatment of waiver of tort appears to be part of a broader tendency

toward the judicial and policy accommodation of class action litigation. In the case of waiver of

tort in particular, the question raised in this paper is whether the accommodating approach to

pleading of waiver tort has in fact been counterproductive, increasing the costs and inefficiencies

of litigation of such claims.

Policy Issues

In the Serhan appeal, Epstein J. recognized the potential inefficiencies of recognizing a free-

standing claim based on waiver of tort. An extended excerpt from that decision summarizes the

challenge before the court:

However, connecting these plaintiffs with these gains in a legally coherent

fashion is the problem that lies at the root of the challenge to the
certification of this class proceeding. The remedy the plaintiffs seek may
leave them better off than if the events had never occurred. The possibility
of a windfall gain bothers some. The possibility of leaving the defendants
with their ill-gotten gains, bothers many.

The potential problem with a free-standing waiver of tort centers on the

difficulties in creating sound rules that can be developed to define
circumstances where it would and where it would not apply…

The policy debate that has been identified in these reasons demonstrates the
need to think through carefully why a plaintiff is given a remedy, what it
should be based on and the limits on what the courts can do to respond to
misconduct such as that pleaded here…

Communications Inc. [2011] 1 S.C.R. 531 upholding the applicability of the Business Practices and Consumer
Protection Act, S.B.C. 2004, c.2 to oust application of a mandatory arbitration clause.

24
The test for jurisdiction based on a real and substantial connection articulated in Morguard v. De Savoye, [1990] 3
S.C.R. 1077, and refined through to Club Resorts Ltd. v. Van Breda, 2012 SCC 17, has been grounded on
commonality of interests of class members without further ties to the jurisdiction in cases such as McCutcheon v.
The Cash Store, [2006] 80 O.R. (3d) 644 and Baxter v. Canada (Attorney General), [2005] O.J. No.2165
 13

The response may lie in the concept of gain-based compensation, a notion

that requires a different form of justification since the plaintiff cannot
connect himself to the property being claimed by pointing to his or her loss.
This engages the controversial notion of corrective justice, something that
challenges the parameters of tort law.

Given the uncertain state of the law concerning both waiver of tort and the
potential of disgorgement liability and the circumstances under which the
remedy of a constructive trust may be recognized, it is not appropriate that
the court should embark upon an analysis of this nature and significance at
this early stage without a complete factual foundation. This is particularly
so given the policy implications of the issues raised in this proceeding,
implications for which the class proceedings regime in this province is
specifically designed in that it is intended to provide a mechanism for
correcting the behaviour of wrongdoers who would, absent its specialized
procedures, be immune from legal consequences for their behaviour.25

In both Serhan and Eli Lilly, the court concluded that the difficult policy issues facing the court

in recognizing waiver of tort required a full factual record at trial. According to the court in

Serhan “the resolution of the questions the defendants raise about the consequences of

identifying waiver of tort as an independent cause of action in circumstances such as exist here,

involves matters of policy that should not be determined at the pleadings stage”.26 The question

of “whether waiver of tort is an independent cause of action should be resolved in the context of

a factual background of a more fully developed record”.27 Similarly, in Eli Lilly, consideration of

whether and when waiver of tort should be an available remedy involves “important issues of

policy… that must surely be confronted on the basis of a full factual record”.28

25
Serhan appeal at para.150-55
26
Serhan appeal para.68
27
Serhan appeal para.69
28
Eli Lilly at para. 48
 14

Anderson v. St.Jude Medical

In Anderson , the first trial level decision in which waiver of tort was pleaded in the class action

context, it appeared that the doctrine would finally receive consideration based on a full

evidentiary record at trial. The decision was awaited with great interest by those following

develpments of the law in this area. However, given the court’s finding that there was no

wrongdoing by the defendant, the applicability of waiver of tort to the case did not need to be

considered in detail by the court.

Nevertheless, Lax J., recognizing the importance of the issue, made a number of significant

comments about the doctrine. The court noted the expert evidence from the defendants that

recognition of a free standing cause of action based on waiver of tort in product liability

negligence cases could have a deleterious effect on product development and could deter

innovation of important health care products. The court cited comments by the defendant’s

expert that “Law and economics policy considerations strongly support the idea that damages

for negligence should be calculated based on the injury suffered by the plaintiff, rather than the

gain realized by the defendant.”29 In addition, the defence expert

…noted there is considerable risk that overcompensating a plaintiff through

waiver of tort in a negligence case would destabilize the deterrence and
insurance functions of tort law. He testified that such a regime has the
potential to deter socially productive activities. For example, allowing waiver
of tort in negligence cases may: cause sellers to take socially excessive
precautions on the market; cause sellers to take products off the market; cause
sellers to under-invest in product innovation; cause sellers to charge higher
prices for their products; and, cause consumers to have to pay more for
products than they would prefer to pay.”30

29
Anderson at para.589
30
Anderson at para.591
 15

The defendants cited a number of studies indicating that price increases in certain products, as

well as beneficial products being discontinued, could result from the recognition of “super-

compensatory liability” under a disgorgement remedy not based on proof of loss. The court

recognized that class actions based on waiver of tort were potentially inefficient, and could lead

to suboptimal outcomes, contrary to the common view of the benefits of class action litigation.

The court commented on the challenging policy issues raised by waiver of tort. Compensation

for negligence not tied to proof of loss, the court noted, could result in punishing defendants for

conduct that has never before been considered wrongful. Quite simply, punishing defendants for

actions that have not caused damages raises fundamental philosophical questions concerning the

interests tort law is meant to protect. According to the court “the discussion surrounding the

waiver of tort debate touches on questions as fundamental as what exactly it is that directs the

law to deem certain conduct wrongful.”31 Is it damages, or simply the breach of a duty of care

that makes a defendat’s actions wrongful?

Of particular interest were the court’s comments regarding the need for a full evidentiary record

at trial to address the applicability of waiver of tort in a given action. It will be recalled that in

Serhan and Eli Lilly, as well as in the majority of decisions certifting waiver of tort, the courts

have declined to rule on the doctrine at the certification or pleadings stage, holding that the

applicability of the doctrine was a matter best left for trial. In Anderson, the court expressed its

doubt that a full evidentiary record was necessary to answer the question of applicability of the

doctrine. In fact, the plaintiffs in Anderson themselves submitted no policy evidence at trial and

argued that the issue of waiver of tort was a legal question that could be answered on a

certification motion under the Class Proceedings Act. Lax J. agreed with this position and

31
Ibid at para.593
 16

expressed doubt that a full evidentiary record was required to address the issue. In fact, the court

noted that:

The extensive factual record that was developed during a 138 day trial did not
illuminate for me the important issues of policy that were meant to arise from
the trial record. The written submissions of the parties did not rely on any
evidence from the factual record in advancing arguments to support or oppose
extending the waiver of tort doctrine to a negligence case.

On the basis of my experience, the answer to this and the other questions
surrounding the waiver of tort doctrine is not dependent on a trial with a full
factual record and may require no evidence at all.32

Conclusion

It may well be that Anderson represents a high-water mark for waiver of tort. It may be hoped

that courts will now feel emboldened to address the applicability of waiver of tort in a particular

case on certification and pleadings motions. There is no reason in principle why the issues

surrounding waiver of tort cannot be adressed in the context of pre-trial motions. There is

certainly ample precedent for the court addressing difficult policy issues on pleadings motions.

Recent examples in the class action context include claims of regulatory negligence against the

Crown,33 where the courts have not shied away from the task of adressing difficult policy issues

32
Ibid at para.585

33
See for example Attis v. Canada (Health), 2008 ONCA 660 (CanLII) and Drady v. Canada (Health), 2008 ONCA
659 (CanLII)
 17

and striking on policy grounds causes of action that did not meet the Anns Anns v. Merton

London Borough Council 34 test of duty, forseeability and proximity.

Failure of the courts to take a similar approach to waiver of tort claims has led to a proliferation

of such claims, with little evidence that a full evidentary record at trial would dispose of the

issue. Arguably, some of the settlements that have resulted from pleading waiver of tort have

been less than optimal. Serhan itself was recently settled for $4 million. In the motion for

approval of the settlment, Horkins J., noted that the likelihood of success was the critical factor

in approving the settlement, holding that “the fact that this action was certified with waiver of

tort being the cause of action created significant risk and challenges for the class…”35 The court

noted that there was “considerable risk” that a trial court would find that waiver of tort was not

an independent cause of action. In addition, there was a risk that a disgorgement remedy could

be extremely difficult to calculate, and could in fact result in a negligible award.

In Anderson, the court observed that the challenging philosophical and policy issues raised by

waiver of tort may be too far-reaching for a court to resolve, and the issue might best be left to

the legislature. Respectfully, such an approach would once again remove the debate from the

venue in which is most properly dealt with. Waiver of tort is not an “almost mystical” doctrine36

that the courts are not competent to deal with on motion. The argument of this paper has been

that there must be a principled basis for awarding remedies that are fair to both plaintiffs and

defendants. Waiver of tort in cases of proprietary torts or wrongful conduct is a reasonable

extension of restitutionary remedies. Or, as the court noted in Eli Lilly, waiver of tort may be

appropriate to hold a person “to account in equity for profits obtained through a breach of

34
Anns v. Merton London Borough Council, [1978] A.C.
35
Serhan v. Johnson & Johnson, [2011] ONSC 128 (CanLII) at para.66
36
Serhan appeal at para. 51
 18

contract, or an equitable wrong consisting of a breach of a fiduciary duty of loyalty.” In these

examples, the prospect of indeterminate liability is limited by the property interest of the

plaintiff, or by the contractual or fiduciary relationship between the parties. However,

recognition of a free standing action based on waiver of tort that would force defendants to

disgorge profits to large plaintiff classes who have not suffered losses themselves would raise a

significant risk of indetreminate liability and windfall gains for which no principled legal

justification exists in the present state of the law of torts. The courts should not be shy to enforce

these limits of tort law and uphold the policy reasons behind them.
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Cases Cited

Anderson v. St. Jude Medical, (2012) ONSC 3660

Anns v. Merton London Borough Council, [1978] A.C.

Baxter v. Canada (Attorney General), [2005] O.J. No.2165

Club Resorts Ltd. v. Van Breda, 2012 SCC 17

Dobbie v. Arctic Glacier Income Fund et al., [2011] ONSC 25

Heward v. Eli Lilly & Company, (2007) CanLII 2651 (ON SC)

McCutcheon v. The Cash Store, [2006] 80 O.R. (3d) 644

Morguard v. De Savoye, [1990] 3 S.C.R. 1077

Pettkus v. Becker, [1980] 2 S.R.R. 834

Queen v. Cognos Inc., [1993] 1 S.C.R. 87

Seidel v. Telus Communications Inc. [2011] 1 S.C.R. 531

Serhan Estate v. Johnson & Johnson, (2006) 269 DLR (4th) (Div. Crt.)

Serhan v. Johnson & Johnson, [2011] ONSC 128 (CanLII)

Silver v. Imax [2009], 66 B.L.R. (4th) 222

United Australia Ltd. v. Barclays Bank Ltd., [1941] A.C. 1 (H.L)

Zidaric v. Toshiba of Canada Ltd., [2000] O.J. No.4590 (Sup.Ct.)

Statutes and Regulations

Ontario Class Proceedings Act 1992, S.O. 1992 c.6

Ontario Consumer Protection Act 2002, Chapter 30 Schedule A

Consumer Protection Act, S.B.C. 2004, c.2

Authors Cited

Cassels, J., and Adjin-Tetty, E., “Remedies: The Law of Damages”, University of Victoria Press, 2008

Lascaris, Dimitri, A., and O’Brien, Anthony, Certification of Reliance-Based Claims in Class Action,
Siskinds LLP, April 30, 2010.
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