Misrepresentation claims brought pursuant to section 52 of the Competition Act are frequently raised in class actions across Canada. After the British Columbia Court of Appeal’s (BCCA) late-2022 decision in Valeant Canada LP/Valeant Canada S.E.C. v. British Columbia, 2022 BCCA 366, it seemed resolved that the common law did not require a plaintiff to rely, to their detriment, on a specific misrepresentation to ground this cause of action. However, 2023 brought new challenges, and with them a revisit to the criteria required to establish this cause of action.
Section 52 of the Act designates an offence for knowingly making a materially false or misleading representation to the public. To be entitled to damages, a plaintiff must establish loss or damage “as a result of” the offensive conduct (section 36). There has been debate in recent years whether the nexus between these two provisions in the Competition Act must focus on reliance by the plaintiff, or whether an alternative means of establishing a misrepresentation on a class-wide basis is sufficient. Two BCCA decisions affirmed and elaborated on the approach in Valeant by holding that alternative means are reasonable and detrimental reliance is not required. However, the Ontario Superior Court questioned the earlier Ontario jurisprudence that would have followed this same approach, and would have dismissed the cause of action for the plaintiff’s failure to plead reliance.
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