Law Times

Law Times • apriL 16, 2018 Page 11 www.lawtimesnews.com Rare to see divergence between provinces Viability of umbrella purchaser claims in question BY MICHAEL MCKIERNAN For Law Times C ompetition lawyers are calling on the Supreme Court of Canada to settle the intensifying debate over the viability of um- brella purchaser claims. A number of class actions launched across the country under s. 36 of the federal Com- petition Act, which provides for civil claims by consumers who paid inf lated prices as a result of conspiracies between competi- tors, include umbrella purchas- ers among their proposed class members. These are individuals who bought products from non- conspirators, but who allege they were still overcharged as an indirect result of price fixing in the broader marketplace for the goods or services. Last summer, in Godfrey v. Sony Corporation, the B.C. Court of Appeal confirmed the judgment of a lower court judge who ruled that umbrella claims are available under s. 36, putting jurisprudence from the province in direct opposition to the line emerging in Ontario. Just months before the deci- sion from B.C.'s top court, in Shah v LG Chem, Ltd., a unan- imous three-judge panel of On- tario's Divisional Court ruled that Superior Court Justice Paul Perell was right to deny certifi- cation to the claims of umbrella purchasers in an action con- cerning alleged global price fix- ing of lithium ion batteries. Ontario's Court of Appeal is scheduled to hear arguments in the same case on May 7, but Nikiforos Iatrou, head of the competition law practice group at Weir Foulds LLP, says he's already seen enough to justify a full hearing at the Supreme Court of Canada. "There are two divergent ap- proaches right now on what is an acceptable theory of damages," says Iatrou, a partner in the firm's Toronto office. "At this point, it seems clear that these cases need to head up so that we know de- finitively whether, for the pur- poses of certification, umbrella damages claims can proceed. "Without some direction from the Supreme Court and a unified set of ground rules, it makes bringing and defending these class actions far too com- plicated," he adds. But Iatrou says he's hoping for a more comprehensive judgment from the nation's top court than it delivered last time a competi- tion class action issue came be- fore it — a trilogy of decisions in late 2013 that related to the cer- tification of indirect purchaser claims. "The Supreme Court essen- tially allowed the indirect pur- chaser claims to go forward at certification and left it up to the trial judges to sort out which ones can be proven. My concern is that it will do the same with umbrella purchasers," he says. "I suspect that if one was litigated all the way through, plaintiffs would not ac- tually be able to prove all of these various types of damages, but the difficulty is that, from a practical point of view, we have never had a fully contested competition class action." In the meantime, Iatrou says, the status quo favours plaintiffs, because without certainty over the viability of umbrella pur- chaser claims, it's in their inter- ests to tag them on and hope for the best at certification. "By creating a real thicket of theoretical damages claims, all we're doing is giving plaintiff- side firms more leverage to nego- tiate bigger settlements," he says. But Bridget Moran, a lawyer with Siskinds LLP in London, Ont., says it would be unfair to exclude umbrella purchasers in cases of alleged price fixing. "The theory is that if the con- spiring defendants had enough control of the market to fix prices, then it allowed their com- petitors to raise prices as well. In those circumstances, class mem- bers who bought goods from non-defendant manufacturers should also be able to recover the amounts they were over- charged," she explains. Moran's firm is part of the consortium representing the plaintiffs in Shah, the lithium ion battery case, and is hop- ing Ontario's Court of Appeal follows the example of its B.C. counterpart once it has heard ar- guments in the case next month. In his original 2015 decision in the case, Perell certified the class action, but he excluded the claims of umbrella purchasers. The Divisional Court upheld the decision, agreeing that they had no reasonable cause of ac- tion due to the "indeterminate and uncircumscribed" lability to which their inclusion would expose the defendants. "Adding in the Umbrella Purchasers greatly expands the members of the class, and does so by adding persons with whom the respondents had no deal- ings," wrote Ontario Superior Court Justice Ian Nordheimer on behalf of his Divisional Court colleagues. "Indeed, if the Um- FOCUS Medico/Legal Your case is too important. You deserve the right EXPERT WITNESS. Unparalleled expertise from our award-winning national team of experts CONNECTMLX.COM EXPERTS@CONNECTMLX.COM TOLL FREE: 855-278-9273 ✔ More than 2,000 medical malpractice, personal injury and class action cases. ✔ More than 300 lawyer clients assisted. ✔ Direct access to hundreds of specialists from all areas of healthcare expertise. ✔ A top provider of cost of care reports for your most catastrophically injured clients. Since 2001, we've become a leader in Expert Witness Services in Canada. ntitled-4 1 2017-10-24 2:41 PM See SCC, page 12 Paul-Erik Veel would like to see umbrella claims blocked, but he would also appreci- ate a Supreme Court ruling on the issue. The Canadian Lawyer InHouse Innovatio Awards celebrate in-house counsel, both individuals and teams, who have found ways to show leadership by becoming more efficient, innovative and creative in meeting the needs of their organizations within the Canadian legal market. To book your seats or to inquire about sponsorship, contact us at 416-649-8841 or MediaSolutions.Sales@thomsonreuters.com Date: Sept. 20, 2018 Location: Arcadian Court, Toronto 5:30 p.m. Cocktail Reception 7 p.m. Gala Dinner and Awards Presentation Emcee: Jennifer Brown, Managing Editor, Canadian Lawyer InHouse/Law Times Dress: Business Attire FORGING A STRONGER FUTURE www.innovatio-awards.com Signature Sponsor Untitled-4 1 2018-03-15 3:20 PM The theory is that if the conspiring defendants had enough control of the market to fix prices, then it allowed their competitors to raise prices as well. Bridget Moran

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