The prominent business consultant Peter Drucker once observed that, “[t]rying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window.”[1] With that caveat in mind, what trends can we expect to see in class actions in Ontario in 2020? We set out our predictions below …
1. The Godfrey Effect
The most significant legal development in class actions in the past year was the Supreme Court of Canada’s landmark decision in Pioneer Corp. v. Godfrey.[2]
While competition class actions will feel the impact of Godfrey most directly, its effects will not be limited to such cases. We expect the ripples created by Godfrey to spread throughout class action jurisprudence in 2020. In particular, we expect that:
· Plaintiffs will advance more common law and equitable claims in parallel to statutory claims. This is because the Supreme Court expressly rejected the argument that section 36 of the Competition Act[3] - which creates a civil right of action for any person who has suffered loss or damage as a result of certain violations of the Act or a failure to comply with an order under the Act - is a “complete code” that bars common law or equitable claims for breach of the statute. Class counsel will likely argue that similar reasoning applies to other statutory causes of action. The availability of parallel claims for conspiracy or unjust enrichment in such circumstances is significant, in part because these non-statutory actions may be subject to different limitation periods and may entitle successful plaintiffs to different remedies, such as disgorgement of profits rather than compensation for damages.
· Counsel on opposing sides will continue to argue over the amount of evidence that the plaintiffs must present to establish a workable methodology for proving damages at a common issues trial. The Supreme Court held that, in price-fixing class actions, plaintiffs only need to present an expert methodology that is sufficiently credible or plausible to establish that one or more purchasers suffered a loss. This is a low bar. There will no doubt be debate as to whether, by analogy, the “some basis in fact” requirement for establishing common issues as to damages ought to be applied with equal leniency in other contexts.
· In the competition context, we are likely to see the expansion of class sizes and, consequently defendants’ exposure, for two reasons. First, in price-fixing class actions, classes will include “umbrella purchasers”, people who bought a product from a party not involved in the alleged conspiracy but who allege that the price-fixing arrangement artificially increased prices across the market, including those charged by non-participants in the conspiracy. Second, given the Supreme Court’s finding that the discoverability principle applies to the statutory right of action for damages created by section 36 of the Competition Act, classes may now be able to stretch further back in time, subject to the counter-argument that discoverability is an individual issue.[4]
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