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Canadian Class Actions Take A Step Forward

Posted  October 5, 2009

Canadian competition law litigation took a step forward last week with the decision in Irving Paper Ltd v. Atofina Chemicals Inc. et al., in which the Ontario Superior Court certified a consolidated class of direct and indirect purchasers in a horizontal price-fixing case involving the hydrogen peroxide industry.  The case has important precedential value as it represents the first time in Canada that an antitrust class action was certified in an international conspiracy/cartel case on a contested basis.

The Court had to determine whether a class of purchasers of hydrogen peroxide met the criteria for certification under the Class Proceedings Act, including: 1) whether the pleadings disclosed a cause of action; 2) whether there was an identifiable class of two or more persons that would be represented by the class representative; 3) whether the claims or defenses of the class members raise common issues; 4) whether the class proceeding was the preferable procedure for the resolution of the common issues; and 5) whether there was a representative plaintiff or defendant who would adequately represent the interests of the class.

The Court spent a considerable amount of time on the “common issues” criteria.  The Court concluded that there were many common issues relating to the conspiracy.  With respect to damages, the Court acknowledged that there are considerable impediments to certification in price-fixing cases involving indirect purchasers, including that the requirement of a methodology to establish damages on a classwide basis.  However, after reviewing the parties’ competing expert opinions on damages, the Court certified the class, finding that, at the certification stage, the Court only needs to be satisfied that “a methodology may exist for the calculation of damages.”

The decision is significant in that it seems to relax scrutiny at the certification stage and could lead to more competition class actions in Canada.

Tagged in: International Competition Issues,