Compensation for the Class: Ascertaining and Distributing Damages in a Competition Class Action

• Author: James Sullivan and Amelia Staunton
• Pages: 371-400

371

COMPENSATION FOR THE CLASS:

ASCERTAINING AND DISTRIBUTING

DAMAGES IN A COMPETITION CLASS

AC TI ON

James Sullivan and Amelia Staunton*

A. INTRODUCTION

Class action legislation is procedural in nature and provides no new causes

of action to the plaintiff class. The challenge facing both lawyers and the

courts is how to bring together the flexible procedures in Canadian class

action legislation and the relatively untested civil remedies provided in

the Competition Act.1 This article considers how the flexible procedures

established to distribute compensation to class members pursuant to

class action legislation may be used in Competition Act cases. In doing

so, two key principles articulated by the courts should be borne in mind.

The first is that class action legislation “was adopted to ensure that the

courts had a procedural tool sufficiently refined to allow them to deal

efficiently, and on a principled rather than ad hoc basis, with the increas-

ingly complicated cases of the modern era.”2 The second is that the object

of the legislation “is not to provide perfect justice, but to provide a ‘fair

and efficient resolution’ of the common issues. It is a remedial, procedural

statute that should be interpreted liberally to give effect to its purpose. It

sets out very flexible procedures and clothes the court with broad discre-

tion to ensure that justice is done to all parties.”3

When a class is able to bring a class action to a successful resolu-

tion, either through a trial on a common issue or by settlement, the court

* Both of Blake, Cassels & Graydon LLP, Vancouver, British Columbia. The

authors are grateful for the assistance provided by Gloria Chao, Paul Cassidy,

and David Neave in the preparation of this article.

1 R.S.C. 1985, c. C-34.

2 Hollick v. Toronto (City), [2001] 3 S.C.R. 158, McLachlin C.J.C. at para. 14

[Hollick].

3 Endean v. Canadian Red Cross Society (1997), 36 B.C.L.R. (3d) 350, Smith J.

(S.C.) at para. 58, rev’d on other grounds (1998), 48 B.C.L.R. (3d) 90 (C.A.).

372 LITIGATING CONSPIRACY: AN ANALYSIS OF COMPETITION CLASS ACTIONS

must consider the method of resolving any individual issues that remain

and how to distribute any damages that may be available to the class.

The court has significant discretion to implement creative, practical, and

efficient methods to bring the class action to a conclusion for the class

members, but in doing so, the court must consider the purposes of class

action legislation.

The Ontario Law Reform Commission identified three purposes of

class action legislation:

1) the goal of permitting the advancement of meritorious claims which

have henceforth been uneconomical to pursue because the damages

for each individual plaintiff would be too small for each claimant to

recover through usual court procedures. Consequently, the Act permits

an economy of scale, by permitting a representative plaintiff to sue for

damages for an entire class, which may be substantial and thus justify

the expense of litigation [litigation efficiency];

2) the goal of resolving a large number of disputes in which there are

common issues of fact or law within a single proceeding, to avoid

inconsistent results, and prevent the court’s resources from being

overwhelmed by a multiplicity of proceedings …. The Act permits the

determination of the common issues, and where individual issues arise,

permits them to be dealt with individually to the extent that they are

different [judicial economy]; and

3) the goal or principle of modification of the behaviour of the defen-

dants to class proceedings, by modifying wrongful behaviour on the part

of actual or potential defendants [behaviour modification].4

The courts have confirmed that these goals capture the purposes of class

action legislation. The Court of Appeal for Ontario commented in Carom

v. Bre-X Minerals Ltd.5 that judicial economy and litigation efficiency

were the fundamental procedural goals of class action legislation. The

British Columbia Supreme Court observed that behaviour modification

was the primary goal of the class action in Scott v. TD Waterhouse Investor

Services.6 The Supreme Court of Canada, in its 2001 trilogy of decisions

dealing with class action certification, approved the lower courts’ inter-

4 As summarized from the OLRC report in Abdool v. Anaheim Management Ltd.

(1993), 15 O.R. (3d) 39 (Gen. Div.) at 45–46.

5 (2000), 51 O.R. (3d) 236, 196 D.L.R. (4th) 344, 1 C.P.C. (5th) 62 (C.A.).

6 (2001), 94 B.C.L.R. (3d) 320 (S.C.) [Scott].