Defending Consumer Protection Class Actions in Canada

Consumer protection class actions are increasing across Canada. These actions typically combine breach of consumer protection legislation claims with other potentially applicable causes of actions, such as contraventions of other statutes, breach of contract, negligence and unjust enrichment. Several recent decisions have addressed the certification issues raised by these actions, and some of these claims have been determined on the merits.

Below are key highlights of recent topics and trends in consumer class actions in Canada:

1. Consumer class actions remain the most common type of class action with nearly 200 cases filed across Canada since the beginning of 2020.

2. Some judges are increasingly prepared to meticulously examine a plaintiff’s claims at the certification stage in light of the differing statutory requirements between provincial and territorial consumer protection statutes. In some cases, judges have either narrowed the scope or refused to certify or authorize proposed consumer class actions where the national consumer protection claims are not properly pleaded to address the variable requirements or where some or all of the provincial and territorial statutes do not apply.

3. Two recent proposed industry-wide consumer protection class actions in Quebec were denied authorization because the underlying legal claim was ill-founded. The cases deal with overlimit credit-card transactions and mortgage-prepayment penalty clauses. The court found that the cases turned on pure issues of law that did not turn on the analysis of evidence and could therefore be decided at the authorization stage.

4. Courts have also recently refused to certify proposed class actions for failure to meet the preferable procedure criterion. For example, in some cases involving repair, replacement or reimbursement schemes, certification judges have found that the plaintiffs had not suffered any compensable loss and that a class action would not further the access to justice and behaviour modification goals of class proceedings.

5. Recent certification and merits decisions have provided additional clarification on issues and nuances that arise in consumer class actions and guidance on arguments that may assist in resisting or limiting certification of these claims.