More Class Action Trials in Canada?

Consumer class actions have been on the increase in Canada in recent years and that trend will likely continue in the wake of the Supreme Court of Canada’s decisions in the indirect purchaser trilogy [Supreme Court Releases the Indirect Purchaser Trilogy]. The next trend may well be an increase in the number of class actions defended through trial. Only a handful of class action trials have proceeded in Canada to date; virtually all actions which have passed the certification hurdle have been settled by defendants.

The trilogy sets out the framework for indirect purchaser actions in Canada.  The SCC decided to allow indirect purchaser actions, in addition to direct purchaser actions, against alleged overchargers.  As such, indirect purchaser actions may now be certified as class actions.

The SCC also confirmed that the Court will not assess the merits of a proposed class action at the certification stage and that in common law provinces, the class representative must simply show “some basis in fact” for each of the certification requirements but need not adduce any evidence that the acts alleged actually occurred.

However, although indirect purchaser actions may now be more easily certified, the trilogy does not ease the challenges that the plaintiffs will face in proving their loss on the merits.  The Court held that the remoteness and complexities associated with proving loss down the distribution chain are real and must be assumed by indirect purchasers: “[t]he multitude of variables in indirect purchaser actions may well present a significant challenge at the merits stage.”

There remain very significant evidentiary hurdles for indirect purchaser classes post-certification such that there will be cases certified that have little prospect of success at trial.  It is likely that more defendants will opt to defend through trial as the chasm widens between certification and the plaintiffs’ ultimate ability to successfully prosecute their action.

class action Supreme Court of Canada



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