Trends in Canadian class actions following Cheung v NHK Spring Co Ltd

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This is an insight article whose content has not been written by the GCR editorial team, but which has been proofed and edited to run in accordance with the GCR style guide.

Cases mentionedCheung v NHK Spring Co Ltd (2022 BCSC 1738)
Name of law (as applicable)The Competition Act

The Supreme Court of British Columbia’s certification decision in Cheung v NHK Spring Co Ltd (2022 BCSC 1738) was previously summarised on GCR. The decision is worth delving into further as it is representative of some key higher-level trends in Canadian class actions.

Parallel class proceedings structure

Parallel actions in Quebec and Ontario were brought together in British Columbia and the Supreme Court of British Columbia certified a national class. It is common for a consortium of plaintiffs’ counsel to cooperate across provinces to preserve the plaintiffs’ rights in different provincial courts while choosing to pursue certification in one province – in this case, British Columbia.

Sequencing of certification with dispositive motions

In Cheung v NHK Spring Co Ltd, certification was heard concurrently with a potentially dispositive jurisdiction motion. Sometimes, a court will choose to hear a dispositive motion first (since it may render a certification motion unnecessary; indeed in Ontario, recent amendments encourage this). However, it can also be in the interest of judicial economy to hear a dispositive motion concurrently with certification if there is sufficient overlap in the issues to be litigated

Distinct causes of action for direct, indirect and umbrella purchasers in class actions brought under the Competition Act

Canadian courts have broadly certified classes that include:

  • direct purchasers of allegedly overcharged products;
  • indirect purchasers – who buy an allegedly overcharged product from another purchaser; and
  • umbrella purchasers – who are allegedly harmed by the distortionary effect of anti-competitive conduct on the market as a whole).

In Cheung, the court certified the class on behalf of indirect and umbrella purchasers, but not direct purchasers (all of whom were outside of Canada), declining to take a “fluid and flexible” approach to certifying the direct purchasers’ claims. Direct purchasers must specifically plead a cause of action even if the court otherwise certifies claims by indirect and umbrella purchasers.

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