Make me special: Government regulators and proximity 

publication 

July 2012

Litigation Bulletin

When we last updated you on Kathryn Anne Taylor's case, we focused on the rare procedure that the parties were utilizing to have a special case determined by the Ontario Court of Appeal.1 In this Bulletin, we bring you up to date on how the Court of Appeal used that procedure in Taylor v The Attorney General of Canada2 ("Taylor") to create a framework addressing whether a private law duty of care is owed by government regulators.

Health Canada and TMJ implants

The representative plaintiff in Taylor alleged negligence by Health Canada in relation to the import and sale of temporomandibular joint implants in Canada. These implants were available in Canada beginning in 1987. The issue which the five judge panel had to determine was whether Ms. Taylor had a reasonable prospect, on the facts as alleged, of establishing that Health Canada owed her (and other implant recipients) a private law duty of care.3

In her claim, Ms. Taylor outlined allegations about Health Canada's conduct in relation to the implants, being: the implants were sold in Canada without the necessary Notice of Compliance; Health Canada wrongly represented in its database that it issued a Notice of Compliance for the implants; after discovery of the fact that the implants had not received a Notice of Compliance, Health Canada took no steps to advise of the initial misrepresentation regarding the Notice of Compliance; Health Canada permitted the implants to be sold thereafter without the requisite Notice of Compliance; Health Canada received information that the implants were defective and resulted in serious health consequences and also was advised of various safety alerts, recalls, public health notices and import alerts issued by American authorities in relation to the implants and failed to take adequate steps in response to the information received; Health Canada represented to consumers that it monitored and assured the safety of medical devices; and that Ms. Taylor and other class members relied on Health Canada's representations.4

two components of proximity: legislative scheme and connection with the regulator

After discussing duty of care generally,5 the court focused on the role of the duty of care with respect to regulatory negligence. The focus in Taylor was, assuming that the harm alleged was reasonably foreseeable (the other component of finding a duty of care), whether proximity could be established between a putative plaintiff and a government regulator.

The court held that the proximity inquiry has two components: 1) the applicable legislative scheme; and 2) the interactions, if any, between the regulator or governmental authority and the putative plaintiff.6

The legislative scheme must be examined at the outset of the duty of care inquiry. If the scheme expressly or by implication forecloses or imposes a private law duty of care, the duty of care inquiry need go no further.7 Statutory schemes that provide immunity to the regulator, create remedies to injured parties other than tort remedies, or impose duties on the regulator that conflict with a private law duty of care to a individual have all been held to compel the conclusion that the legislative scheme implicitly forecloses a finding that the regulator owes a private law duty of care to an individual.8

Where the legislation is not determinative of private duty of care one way or the other, the courts explore the specific circumstances of the interactions between the regulator and the plaintiff to decide whether a sufficiently "close and direct" relationship exists to justify the imposition of a prima facie duty of care.

The court stated that there are two "important factual features" features where the court has found a prima facie duty of care. First, the facts demonstrate a relationship and connection between the regulator and the individual that is distinct from (and more direct than) the relationship between the regulator and that part of the public affected by the regulator's work generally.9 The court will more likely find proximity where the actions of the regulator directly impact on the plaintiff and cause physical harm.10 Second, the court held that the imposition of a public statutory duty is consistent with the existence of a private law duty of care owed to an individual plaintiff.11

A regulator's public acknowledgement of its public duties to those affected by its actions (even if relied upon) is likely insufficient to establish a private law duty of care without more.12 However, such representations may be included in a "factual matrix" of considering the relationship between the plaintiff and regulator and related proximity.13

application to Taylor

In applying its framework to determine whether the Amended Statement of Claim in Taylor pleaded a basis for a private law duty of care, the court held that Ms. Taylor's allegations related to Health Canada's relationship with the users of the implants differ from the relationship that exists between Health Canada and consumers of medical devices at large. The court held that although Ms. Taylor did not allege that she was aware of, much less relied on, any of Health Canada's representations concerning the safety of the implants, reliance was just part of the entirety of the circumstances to be considered. Ultimately, it was not plain and obvious that Ms. Taylor's claim was bound to fail for want of a private law duty of care.14

conclusion

In Taylor, the court appeared to place emphasis on Ms. Taylor's allegations respecting Health Canada's misrepresentations regarding the issuance of a Notice of Compliance for the implants and its other conduct when determining whether the parties were sufficiently proximate. The court's refusal to strike Ms. Taylor's private law duty of care pleading when she had not alleged reliance on any specific representation by Health Canada arguably endorses a broad application of proximity solely with respect to government regulators.

However, the court's conclusion was that "the requirements for proximity are diverse and depend on the facts of each particular case,"15 and it may be that the missteps alleged against Health Canada will not commonly exist in other government regulator negligence claims. It is these missteps which apparently pulled Ms. Taylor closer to Health Canada than she would otherwise have been, and were the basis for the court permitting the duty of care pleadings to stand.

by Adam Chisholm

1 See Adam DH Chisholm, "Special Case Hearings in Class Action Litigation: Taylor v Canada (Attorney General), 2011 ONCA 181" (Class Action Bulletin, March 2011).

Taylor v Canada (Attorney General), 2012 ONCA 479 [Taylor].

Ibid at para 22.

Ibid at para 109.

Ibid at paras 67-72.

Ibid at para. 75, citing R v Imperial Tobacco Canada Ltd, 2011 SCC 42.

Ibid at para. 77.

Ibid at para 78.

Ibid at para 80.

10 Ibid at para 87.

11 Ibid at para 88.

12 Ibid at para 95.

13 Ibid at para. 96.

14 Ibid at para 120.

15 Ibid at para 121.

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2012