In Ontario, class actions are a mechanism for groups of people to seek justice. In this article, Elizabeth deBoer looks at how the Consumer Protection Act plays a role in class actions and provides examples of situations where the public can use this legislation to access justice.
The Ontario Consumer Protection Act, 2002 [1. Consumer Protection Act, 2002 S.O. 2002, c. 30], (the “Act”), is comprehensive legislation governing most everyday consumer transactions in Ontario. In addition to outlining consumer rights, the Act provides procedures for cancelling consumer agreements, and provides rules by which suppliers of consumer goods and services must abide. The Act addresses everything from what information must be disclosed and provided to consumers in writing, to the types of conduct that will constitute business practices that are considered “unfair,” and the procedures and options for consumers when a supplier has violated the Act.
Imagine a scenario where, on reviewing your monthly bill, you realize that you have been charged a fee by Acme Co. that you don’t remember previously seeing. Going back over some earlier statements from Acme Co., you discover the fee has been recently added. Each time you call Acme Co. to inquire, you are given the same vague information about how the new fee is “mandatory,” is “basically a tax charged to all customers,” and will be included on your bill going forward. A little research reveals that there is no such tax, and other customers are just as outraged as you are. Furthermore, as far as you can tell, Acme Co. is in violation of the Consumer Protection Act, and is engaging in an unfair practice by misrepresenting the nature of the fee as a tax, and arbitrarily changing the terms of the contract for service. Going head-to-head against a corporate giant with substantial resources, however, is not a battle you can afford the time or resources to take on – especially over the increased charge of just a few dollars a month. On the other hand, what about Acme Co.? That “few dollars” a month can really add up when being charged to all of its customers.
Class proceedings are an effective way to resolve disputes between consumers and large corporations that would otherwise be cost-prohibitive to pursue individually. In order for there to be a “class,” there must be two or more persons with issues in common. Where several people have suffered damages as a result of a defendant’s wrongful conduct, the issues that they have will often be common to all of them. Going back to the scenario above, regardless of whether you, your neighbour and someone in another city have each paid a different amount to Acme Co., the questions you each have for the Court, are common, including: Is Acme Co. in violation of the Ontario Consumer Protection Act in charging this fee? Does Acme Co. misrepresent the nature of the fee as a tax? There must also be a representative plaintiff – someone who is willing to represent the class as the plaintiff in the litigation, and who does not have an interest in conflict with the other class members.
The Ontario Consumer Protection Act is clear that disputes arising out of the Act, may be dealt with through class action litigation [2. Consumer Protection Act, 2002 S.O. 2002, c. 30 s. 8]. This means that where individuals share common issues against a supplier of consumer goods or services, a class proceeding may be an effective means for resolving the dispute and for obtaining recovery for the class.
Consumer protection cases often involve small individual damages, making individual lawsuits uneconomical to pursue. Class actions, on the other hand, are generally pursued on a contingency fee basis where the lawyers’ fees and other costs of litigation are paid only if the litigation is successful or in the event of a settlement. In this way, litigation can be pursued without any up-front costs or out of pocket expenses to class members. By shifting the financial risk from class members to counsel, class actions can be pursued against defendants who might otherwise be immune from corporate responsibility simply because they have more money and resources than the everyday person.
Consumer protection class actions lend themselves well to achieving the goals of the Class Proceedings Act [3. Class proceedings Act, 1992, S.O. 1992, c.6]. The Supreme Court of Canada has emphasized the role of class proceedings in serving three principle objectives [4. Western Canadian Shopping Centres v. Dutton, 2000 S.C.J. No. 63, 2001 2 S.C.R. 534 (S.C.C.) Hollick v. Toronto (City), 2001 S.C.J. No. 67 2001 3 S.C.R. 158 (S.C.C.) and Rumley v. British Columbia, 2001 S.C.J. No. 39, 2001 3 S.C.R. 184 (S.C.C.).]. First, class actions provide access to justice for individuals for whom complex litigation would otherwise be too expensive to pursue in relation to the potential damage award if the plaintiff is successful. Second, class proceedings promote judicial economy, such that court resources are efficiently used to resolve claims that are otherwise similar and raise many of the same issues. Third, class proceedings serve a behaviour modification function that discourages defendants from wrongful conduct, because the risk of having to defend a class action lawsuit is a legitimate business and economical concern in a way that defending a small individual action is not.
If you find yourself questioning the appropriateness of a corporate business practice, contacting a class action lawyer may provide you with the tools you are looking for to determine whether the conduct violates the Consumer Protection Act, and if it does, whether a class action is a viable means for correcting the unfair practice and obtaining recovery.