Lexpert Magazine

October 2019

Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.

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32 LEXPERT MAGAZINE | OCTOBER 2019 of the Competition Act. While the majority acknowledged that the discoverability principle is not a universally applicable rule of limitation periods, it held that discoverability can only be dis- placed by clear legislative language. In this case, the majority held that the discoverability principle was implicit in s 36(4)(a)(i) of the Competition Act, such that the limitation period only began to run when the material facts on which the cause of action were or ought to have been discovered by the plaintiffs by the exercise of reasonable diligence. e majority also held that the doctrine of fraudulent concealment can delay the running of the limitation period under the Competition Act. ird, the majority held that s 36(1) of the Competition Act does not preclude plaintiffs from simultaneously advancing com- mon law or equitable claims relating to anti-competitive behav- iour such as claims for civil conspiracy. Section 36(1) does not provide an exclusive code regarding claims for anti-competitive conduct. Consequently, the majority held that it is tenable for a plaintiff to advance a claim for unlawful means conspiracy where a breach of s 45(1) of the Competition Act constitutes the alleged unlawful means. Finally, the majority held that in order for loss-related ques- tions pertaining to indirect purchasers to be certified as common issues, a plaintiff 's expert methodology need only show that loss reach the record of purchaser level. It is not necessary that the ex- pert establish that every member of the class at that level suffered a loss, nor must the methodology be able to identify those class members who suffered no loss and distinguish them from those who did suffer loss. According to the majority, showing that loss reaches the in- direct purchaser level satisfies the criteria for certifying a com- mon issue since it significantly advances the litigation. Impor- tantly, however, the Court also recognized that showing that loss reaches the indirect purchaser level would not automatically lead to aggregate damages. In order for any individual class member to be awarded damages, the trial judge must still be satisfied they each suffered a loss. However, the majority in Godey held that that is a more appropriate decision for the trial judge rather than the motions judge on certification. At certification, it is sufficient for the motions judge to be satisfied that loss reached the indirect purchaser level. Justice Côté wrote a separate decision, dissenting in part. She agreed with the majority that the existence of the statutory cause of action in s 36(1) of the Competition Act does not preclude a plaintiff from advancing claims in common law or equity and that the doctrine of fraudulent concealment may apply to toll a limitation period. However, she broke with the majority on the remaining issues, holding that it was plain and obvious that umbrella purchasers do not have a cause of action, that the limitation period in the Com- petition Act is not subject to discoverability, and that evidence showing that a loss was suffered at the indirect purchaser level is not sufficient to certify a class; rather, the plaintiff 's experts must be capable of establishing at trial that some identifiable indirect purchasers actually suffered a loss. The Implications of the Court's Decision: What Next? is decision is, in our view, unfortunate in a number of respects. We have previously commented on the concerns with extending liability to umbrella purchasers here, and we have raised concerns about the application of the discoverability principle to Compe- tition Act claims here. We will not repeat those concerns here, which were picked up on in Justice Côté's dissenting reasons. Going forward, the Supreme Court's decision raises a number of questions that parties and courts will have to grapple with. First, what will be the outer bounds of umbrella liability? Certainly, the majority's decision contemplates that purchas- ers of a homogeneous commodity-like product who purchased that product from a non-conspirator can advance claims as um- brella purchases. Would that extend to similar but not identical products? What about circumstances where the conspiracy has an impact on the prices of other products, such as complemen- tary products? Now that the door to umbrella liability has been opened, it may be difficult to set a principled limit. Second, what will cases with umbrella purchasers look like go- ing forward? Will non-conspirator manufacturers be dragged into those cases, as parties seek documentary discovery from them? Given that so many of these cases settle either before or shortly aer certification, that may not be a practical concern in many cases. However, if more cases go to a merits trial – a natural trend given the low bar for certification of such cases laid down in Pro-Sys and affirmed in Godey – the litigation landscape will no doubt become increasingly complicated. ird, can certification motions still play a meaningful screen- ing role in ensuring that only cases that should properly go to trial as class actions are certified? In Godey, the Supreme Court ex- plicitly recognized that class actions involving indirect purchasers can be certified without even a shred of evidence that all indirect purchasers suffered harm or that there is a methodology to show that any particular set of identifiable indirect purchasers suffered harm. Without such a requirement, parties and courts have no assurances that a common issues trial will actually be able to pro- vide an affirmative answer as to whether any identifiable set of class members actually suffered harm. If there is no confidence that a common issues trial can provide that answer, then the mas- sive efforts (and resources) that parties will have to expend post- certification may be entirely futile. In all likelihood, these questions will require further guidance from the Supreme Court in the coming years. Paul-Erik Veel is a partner at Lenczner Slaght LLP COLUMNS CHANGE AGENT

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