In 2038724 Ontario Ltd. v. Quizno’s Canada Restaurant Corporation, the Ontario Superior Court of Justice recently dismissed a motion to approve a Settlement Agreement between the Franchisor and the Representative Franchisees on the basis of an overbroad unfair release.
The allegations forming the basis of the class action included anti-competitive behaviour on the part of the Franchisor. The Franchisor was alleged to be maintaining the prices of goods offered by its Designated Suppliers to Franchisees at commercially unreasonable levels. It was further alleged that there persisted a conspiracy between the Franchisor and the Designated Suppliers to the present … Continue Reading
Canada’s Commissioner of Competition (Commissioner) announced today that it would not appeal the Competition Tribunal’s (Tribunal) decision to dismiss a case it brought against Visa Canada Corporation (Visa) and MasterCard International Incorporated (MasterCard).
Earlier this year, the Tribunal rejected the Commissioner’s complaint that credit card companies had engaged in price maintenance within the meaning of section 76 of the Competition Act; confirming that credit card networks do not engage in resale price maintenance in carrying on their business activities.
For additional information on the Tribunal’s reasons, please see http://www.mccarthy.ca/article_detail.aspx?id=6431.… Continue Reading
If one of your business’ consumer products is recalled, you don’t just need to worry about the recall itself and its implications for your business’ reputation with customers and suppliers. You should also consider class action risk.
There are many examples of Canadian class actions following the recall of a consumer product. The plaintiff can approach their case in a variety of ways, including:
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- Seeking personal injury damages due to the dangers posed by the product (e.g., drugs, medical equipment, baby equipment)
- Seeking restitution (including refunds or that your business pay back its income relating to the product) due to
One of the legal difficulties for plaintiffs in many class actions is showing they suffered harm. Where a disparate group of plaintiffs (possibly consumers) sues one or a small number of defendant businesses, there are inherent difficulties in the consumers proving they all suffered harm as a result of the defendants’ business practices, policies or agreements. Defendants try hard to exploit this difficulty in defending class actions.
In response, class action plaintiffs try to rely on legal theories that “turn the tables” on defendant businesses whenever possible. One example of such a legal theory is contained in provisions in British … Continue Reading
Canadian plaintiff class action lawyers often file copycat class actions to those filed in the United States, so Canadian retail businesses are well-served to pay attention to trends in US class actions.
One area of recent interest in the United States has been the travel and tourism industry, where two major travel-related class actions are now ongoing, both alleging that travel booking websites and hotels entered into agreements with each other to fix prices. This type of price-fixing class action has been seen in Canada in a variety of industries.
Canadian businesses should review their pricing policies and practices with … Continue Reading
In an increasingly online retail world, most businesses operate across provincial and international borders. This reality poses particular challenges to businesses if they are hit with a class action, including:
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- In the United States, there is a mechanism to combine together class actions filed in different states into a single action, so that a business will only have to fight on one front. In Canada, there is no such mechanism other than by the consent of the parties to the various cases, and so a business may have to defend very similar cases in more than one province. Your business’
One area that has been of considerable interest to class action plaintiffs in recent years is price-fixing.
If there has been any interest in your product or niche market, or that of your competitors, by any competition or anti-trust regulator in any jurisdiction in the world, you should consider your business to be at risk of a class action. Price-fixing class actions can take a variety of forms, but the most common form alleges a price-fixing conspiracy, either among competitors (a horizontal conspiracy) or within a supply chain (a vertical conspiracy).
Class action plaintiffs look to regulatory investigations all over … Continue Reading
Although Canadian provinces’ class action statutes were originally based on the US federal class action regime, there are important distinctions both in the various statutes and in how Canadian class action law has evolved.
A few distinctions:
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- US class action awards, including in respect of the equivalent of punitive damages, are generally higher than in Canada, but it is generally easier to get a case certified in Canada.
- In Canadian statutes, there is no requirement that the common issues “predominate” over individual issues – so class actions based on personal injury-type harm happen in Canada even though they generally do
Unfortunately, there is no way to immunize your business from a class action – not in the consumer retail sector and not in any sector. But there are steps you can take to reduce the risks, and to arm your business to respond quickly if the risk materializes.
Five steps your business can take to reduce risk and to be ready to respond if a class action is filed.
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- Establish an internal class actions response team now.
- Have your internal class actions response team take steps to make sure your business’ policies, procedures and agreements are compliant with the