A class action has been certified against Canadian Visa and MasterCard and all the Big Six Canadian banks.
The decision by the Supreme Court of British Columbia, handed down March 27, is a victory for Mary Watson, a B.C. furniture seller who alleges that the credit card companies and the banks conspired to fix the level of fees retail merchants must pay to card issuers when customers use their premium credit cards.
As the representative plaintiff in the class, Watson says that these alleged instances of price-fixing on these types of credit card fees cause damage to Canadian merchants, contrary to the federal Competition Act. The case alleges that merchants accepting such cards must raise their prices to cover the associated fees, which are estimated at about $5 billion annually. The period covered by the allegations begins March 28, 2001 and continues into the present.
The lawsuit was certified under B.C.’s Class Proceedings Act. Bank of America, which was also a defendant, has settled the case against it. Similar applications for certification in other provinces (Ontario, Quebec, Saskatchewan and Alberta) were awaiting the outcome of the B.C. case.
In a comment on the case, law firm Bennett Jones LLP noted that the decision provides “critical insight” into how Canadian courts may decide price-fixing class action applications for certification in the future.
It also noted that the defendants introduced arguments on the merits of the main claim, with little success. “Certification is procedural and concerned only with whether the case can proceed as a class, not whether the plaintiff will or will not succeed on the merits at trial,” the note says, referring to the conclusions reached in the decision. The note adds that: “[Chief Justice Bauman] reiterated that, at certification, the plaintiff’s pleading must be taken as true and need only disclose a reasonable claim. The plaintiff need not establish a ‘genuine controversy.'”
However, certification of a number of the plaintiff’s claims were dismissed, including claims for unlawful conspiracy, intentional interference with economic relations and breach of the statutory price maintenance provisions of the Competition Act.
The Bennett Jones note concludes that the decision — which, if successful, could ultimately lead to massive awards against the banks — “continues a trend in which the courts appear determined to lower the bar to certification.”