The Certification of Competition-related Class Actions in Canada

• Author: John B. Laskin, Linda M. Plumpton, and Amanda M. Kemshaw
• Pages: 219-244

219

TH E CERT IF IC ATION OF

COMPETITION-RELATED CLASS

ACTIONS IN CANADA

John B. Laskin, Linda M. Plumpton, and Amanda M.

Kemshaw*

A. INTRODUCTION

Although the first class action legislation was enacted in Canada more

than twenty-five years ago1 and class proceedings are now a national

phenomenon, Canadian courts still have not stated clearly the manner in

which certification principles will be applied to class proceedings alleg-

ing antitrust violations. As the Court of Appeal for Ontario has stated,

“the question of whether and how consumers will be able to use class

actions to obtain relief from price fixing ... remains an open one in this

jurisdiction.”2

The primary reason for the continuing uncertainty appears to be the

limited opportunity the courts have had to develop this area of the law. To

date, certification has been contested in only one intended Canadian class

proceeding alleging an antitrust conspiracy3 and in one action based on

allegations of price maintenance.4 In both cases certification was refused.

* All of Torys LLP, Toronto.

1 An Act Respecting the Class Action, S.Q. 1978, c. 8, now Art. 1003, Code of Civil

Procedure. See also Class Proceedings Act, R.S.B.C. 1996, c. 50; The Class Actions

Act, S.S. 2001, c. C-12.01; Class Actions Act, S.N.L. 2001, c. C-18.1; The Class

Proceedings Act, C.C.S.M. c. C130; Federal Court Rules, 1998, SOR/1998-106

(as am. SOR/2002-417), Rules 299.1-299.42; Class Proceedings Act, S.A. 2003,

c. C-16.5.

2 Chadha v. Bayer Inc. (2003), 63 O.R. (3d) 22 (C.A.) at para. 65, aff’g (2001), 54

O.R. (3d) 520 (Div. Ct.), rev’g (1999), 45 O.R. (3d) 29 (S.C.J.), leave to appeal

refused, [2003] 2 S.C.R. vi [Chadha].

3 Ibid.

4 Price v. Panasonic Canada Inc. (2002), 22 C.P.C. (5th) 379 (Ont. S.C.J.) [Price].

Certification has also been contested in proceedings involving allegations of

misleading advertising contrary to s. 52(1) of the Competition Act: Carom v.

220 LITIGATING CONSPIRACY: AN ANALYSIS OF COMPETITION CLASS ACTIONS

Several antitrust class actions have been certified for settlement purposes

in recent years, but the decisions in these cases do little to illuminate the

courts’ approach in cases where defendants resist certification. While the

judicial approach to certification of class proceedings generally continues

to evolve, until the courts have had a further opportunity to explore the

unique issues that arise when certification of an antitrust conspiracy class

action is sought, it will remain unclear whether and under what circum-

stances claims arising out of alleged antitrust violations will be certified.

In this article we examine the Canadian experience with antitrust

class proceedings to date and highlight some of the areas requiring addi-

tional judicial guidance. We explore the following issues:

(1) the private right of action under section 36 of the Competition Act,5

including the elements that must be proven to establish this cause of

action, the evidentiary problems that frequently arise and the American

“solutions” to these problems;

(2) the developing Canadian approach to the unique challenges pre-

sented by antitrust class proceedings, analyzed through the framework of

the certification criteria; and

(3) the different standards that are applied and issues that arise when

antitrust class actions are certified for settlement purposes.

B. SECTION 36 — THE PRIVATE RIGHT OF

AC TIO N

Section 36(1) of the Competition Act confers a private right of action on

victims of anti-competitive conduct. Under this section, any person who

has suffered loss or damage as a result of the commission of one of the

criminal offences in Part VI of the statute (or a failure to comply with an

order of a court or the Competition Tribunal) may sue for and recover

the actual loss suffered and the costs of investigating the misconduct and

bringing the action.

Section 36 does not authorize claims for punitive damages or injunc-

tive relief.6 As a result, claims under this section frequently are combined

Bre-X Minerals Ltd. (1998), 20 C.P.C. (4th) 163 (Ont. Gen. Div.). Developments

under the misleading advertising provisions are beyond the scope of this arti-

cle.

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

6 See Wong v. Sony of Canada Ltd. (2001), 9 C.P.C. (5th) 122 (Ont. S.C.J.) at para.