Competition Class Actions: The New Normal?

Competition class actions, an increasingly frequent occurrence, involve an alleged violation of the Competition Act’s criminal provisions related to conspiracies to fix prices, restrict output, allocate markets or practise deceptive marketing. A number of recent decisions have addressed the validity of the claims and their viability as class actions.

Recent trends in competition law class actions in the Federal Court, Ontario, British Columbia and Quebec include:

1. Federal and Ontario courts have dismissed claims and narrowed their focus, suggesting that judges are prepared to more rigorously assess cases at the preliminary stages or plaintiffs are advancing novel legal theories or claims based on speculation.

2. In October 2020, the Ontario Class Proceedings Act came into effect. One important feature of the act is that the preferable procedure criteria has become stricter. Plaintiffs will now have to demonstrate that a class action is superior to alternative procedures and that the questions of law not only are common to class members but will predominate over individual issues.

3. Recent competition class actions in B.C. also offer some hope that courts may be willing to shut down competition class actions at a preliminary stage. In particular, in Latifi v. The TDL Group Corp., the B.C. Supreme Court dismissed the plaintiff’s claim that a no-poaching clause in a franchise agreement violated section 45 of the Competition Act. The same court also granted summary judgment dismissing a claim alleging a section 45 violation in Pantusa v. Parkland Fuel Corporation.

4. In Quebec, the authorization (certification) threshold is particularly low for competition class actions. However, to authorize a national class that includes residents from other provinces, the defendant’s head office must be in Quebec or the dispute must have originated there, and neither is usually the case.

5. Also in Quebec, plaintiffs often rely on civil law claims in competition class actions pursuant to article 1457 of the Civil Code of Quebec. However, for traditional price-fixing claims, those civil law causes of action do not have much bearing ― they may become relevant when another type of anti-competitive conduct is alleged.

 
Have more than five minutes? Contact any member of our Competition Litigation group to learn more, or view our recent webinar on these topics.