Ontario's Court of Appeal recently overturned the decisions of two lower courts to approve certification of an environmental class action against Inco Limited.  Members of the class in the Pearson v. Inco case will now be able to pursue their claims for alleged property damage caused by emissions from Inco's former nickel refinery in Port Colborne.  Specifically, the class action plaintiff alleges that property values in the area surrounding Inco's refinery have declined by as much as 45 percent since 2000, when the Ministry of the Environment released a report regarding environmental and health risks from Inco's emissions.

Before the Court of Appeal heard this matter, the plaintiff significantly reduced the scope of the claims by withdrawing health related claims.  In effect, the only remaining claim that the plaintiff sought to advance was a claim for property damage.  The narrowed scope of the claim was central to the Court of Appeal's decision to certify the class action.  Indeed, by narrowing the scope of the action to property damage, the members of the class were reduced from 20,000 to 8,000 and the remaining issues were viewed as manageable in a class action.  Although the Court of Appeal acknowledged that adjudication of individual claims would likely still be required to determine the amount of damages owing to each impacted property owner, this did not eliminate or override the existence of substantial common liability issues that were appropriate for resolution by way of class proceeding.

The Court of Appeal's decision is significant as it signals a more generous interpretation of class action legislation for environmental claims.  In particular, this decision may be viewed as a recharacterization of the law after a 2001 decision of the Supreme Court of Canada (Hollick v. Toronto) seemed to limit opportunities for class actions involving environmental impacts.  Still in question is the availability of a class action process for environmental claims regarding health effects from industrial operations.

We understand that Inco intends to seek leave to the Supreme Court of Canada to appeal this Court of Appeal decision.  A copy of the Court of Appeal decision in Pearson v. Inco can be obtained at: http://www.ontariocourts.on.ca/decisions/2005/november/C42414.htm.
 
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