Law Times

Page 10 September 18, 2017 • Law timeS www.lawtimesnews.com Counsel should caution clients Barriers to private actions deemed too high BY DALE SMITH For Law Times W hile the Competi- tion Act allows for private actions at the Competition Tribunal in limited circum- stances, it's a provision that has seen little take-up, in part be- cause of the high bar that was set in order for those actions to go ahead. Competition lawyers say it makes sense to make it easier to start more private actions. "You're dealing with a Com- petition Bureau that is resource- restrained — they're not going to bring every case that comes to them by way of a complaint," says Nikiforos Iatrou, partner with WeirFoulds LLP in Toronto. Iatrou says that while the Competition Tribunal has said that it wants to deal with com- petition issues, it doesn't see itself as a place for parties to air private grievances and has put in place a leave process to vet cases. Purely private cases are stopped, Iatrou says, while cases that would have a broader im- pact on competition are allowed to proceed. He says that while the thresh- old for leave under the act was meant to be low, the way it has been applied means that very few cases have made it through to the tribunal. "My suspicion is [that it is] because the tribunal really feels like the cases are really coming into it more from the aspect of a private dispute rather than a large-scale competition issue," says Iatrou. He says the problem is that, if the system relies on parties to bring cases forward, it won't do it for purely altruistic reasons and there will inevitably be an element of private dispute. Steven Szentesi, a lawyer in private practice in Toronto, says he would prefer the ability to make references to the Compe- tition Tribunal be made easier. The reference section in the act, s. 124.2, was added in 2002, but it states that private parties cannot bring a reference uni- laterally but need the commis- sioner's consent. "It's quite an important limi- tation on the section because there are many instances when private parties want to have guidance on the law without go- ing to a contested proceeding, and that may be for a variety of reasons — deciding whether or not to convince litigation, as- sessing the level of risk associ- ated with something they want to do or avoiding the litigation process, which can be very ex- pensive and very time consum- ing," says Szentesi. "There are all kinds of prac- tical reasons to have a reference provision that private parties can access unilaterally." Szentesi says the Commons standing committee on indus- try recommended such access in 2000, but it was never adopted. "There's compelling argu- ments to amend the act to allow private access provisions," he says. Iatrou has personally tried to get leave on two cases, and he managed to do so in one of them because it met the lower test found in s. 76 of the Compe- tition Act, whereas actions un- der ss. 75 and 77 have a higher bar because they necessitate that challenges be directly and sub- stantially affected by the behav- iour they are challenging. "These tests have been set up that effectively act as barriers to parties bringing a case," says Ia- trou. "It's a fine line between try- ing to filter out cases that are purely commercial disputes that don't have broader compe- tition-related issues while still nonetheless allowing access to justice for companies that can't convince the bureau to bring a case, but who have a legitimate case that does have a competi- tion aspect to it." Iatrou says that he doesn't feel that a proper balance has been struck and that responsible counsel should warn their cli- ents that it won't be easy to get leave. Szentesi says that, short of lit- igation, there are few other ways to get guidance on competition issues. While lawyers can ask the bureau for an advisory opinion, the process is both discretion- ary and the policy in recent years has been to limit the scope of opinions so that they offer no opinions on defences or com- petitive effects. "There's a lot of very old and under-considered sections of the Competition Act, some of which have never been consid- ered," says Szentesi. "Clients want to know what the law is, clients want to know what the level of risk is or whether they should proceed in a particular matter, and this is a significant limitation on them getting guidance in the law." Outside of access to the tri- bunal, the act does allow for private causes of action under s. 36, but again, it limits the types of wrongs under the act that can be grounds for action, expressly excluding abuse of dominance as a cause. "It would seem to us that there would be a number of policy reasons why it would be good to expand the private causes of ac- tion under s. 36 to include abuse of dominance violations," says Julie Rosenthal, partner with Goodmans LLP in Toronto. She says she can't find a rea- son why abuse of dominance would be less actionable than other types of conduct, such as conspiracy or misleading adver- tising. "Given the bureau's limited resources, there would seem to be some merit to allowing pri- vate litigants effectively to police those types of breaches of the act, which would presumably free the bureau up to pursue other conduct that isn't being policed," says Rosenthal. "It spreads the costs around, FOCUS Nikiforos Iatrou says that while the thresh- old for leave under the Competition Act was meant to be low, the way it has been applied means that very few cases have made it through to the tribunal. Integrated Legal Marketing Solutions LawyerMarketingCanada.com/solutions Put Your Digital Marketing Tactics into High Gear Untitled-4 1 2017-09-12 8:09 AM See Few, page 12 There's compelling arguments to amend the act to allow private access provisions. Steven Szentesi In-class and online programs recognized by Law Societies Executive Education to Navigate the Canadian Legal Landscape Visit Lexpert.ca to find out more

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