A proposed class action against Canadian and U.S. banks and the two major credit card firms, MasterCard and Visa, over their interchange fees can go ahead, the Court of Appeal for British Columbia has decided.
The court largely dismissed an appeal by financial institutions that are defending a suit brought on behalf of merchants, alleging that the credit card companies impose excessive fees and restrictive rules on them, according to the court’s decision published on Wednesday.
The financial institutions involved in the suit include all of the big six Canadian banks (Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of Commerce, National Bank of Canada Inc., Royal Bank of Canada, and Toronto-Dominion Bank), Fédération des caisses Desjardins du Québec, and several large U.S. banks (Bank of America Corp., Capital One Bank, and Citigroup Inc.), along with MasterCard International Inc., Visa Canada Corp.
The Supreme Court of British Columbia (SCBC) ruled in March 2014 that the suit could proceed on a number of grounds, including claims based on breach of the Competition Act, common law conspiracy to injure, and unjust enrichment; but the SCBC struck down several other grounds. Both sides then appealed various aspects of that order. Now, the appeal court handed down its ruling, largely upholding the case and allowing it to proceed.
The banks’ appeals from the order identifying common issues and holding the claim suitable as a class action were largely dismissed, except that the appeal court struck out one of the grounds for the suit (alleging a violation of competition law); but, it also upheld an appeal by the merchants, ruling that their claim of “unlawful means conspiracy” is not destined to fail, and that it can be part of the suit.
The appeal court also allowed Desjardins’ appeal of the order certifying the class action against it. The lower court’s decision didn’t deal with Desjardins’ argument that common issues identified in the class action don’t apply in its case, the appeal court found.
As a result, the appeal court set aside the certification order against Desjardins, and ordered that the Supreme Court of B.C. reconsider that issue.