Notice to Members: How to Distinguish Attempted Fraud?
You've probably already received an e-mail or text message about a class action.
When we think of class actions, we generally assume that only consumers are involved. However, businesses can also participate in class actions and receive financial compensation of up to several thousand dollars.
This misconception is likely due to the fact that this was not always the case. Initially, legal persons (businesses and other organizations) were all excluded from class actions. The law was amended for the first time in 2003 to include organizations that had fewer than 50 employees during the 12 months preceding the application for authorization. This restriction was subsequently eliminated when the new Code of Civil Procedure came into force on January 1, 2016. The Code now authorizes legal persons, corporations and associations of all sizes to become members of a class action.
As a result, a business can be a member of virtually any class action unless its nature is inherently incompatible, such as human rights cases involving solitary confinement, detention or strip searches.
Why should businesses pay attention to class actions?
A class action can allow a business to obtain compensation for losses that would otherwise be too costly to claim through legal proceedings in the company’s name. Such class actions could cover overpayments, defective products or contested business practices.
Several business owners may not even be aware that their business is eligible for compensation as part of a class action. In certain circumstances, a simple claim can allow a business owner to recover hundreds or even thousands of dollars.
Regularly monitoring class actions can help identify opportunities for compensation that your business might be entitled to. You may even receive a notice advising you of a class action. In such cases, read the notifications carefully since your organization may be a member of the class action in question.
Class action types to monitor
Class actions in which an organization may be a class member include the following.
- Neighbourhood disturbances and environmental impacts (flooding in Rosemont in 2009 and 2011, for example). The file was limited to companies with fewer than 50 employees in the 12 months prior to the appeal.
- Illegal price fixing and anti-competitive practices (beef price fixing since 2015, for example).
- Excessive credit card fees and payments.
- Defective products.
- Misrepresentations (appeal regarding the compliance of Perspectives Plus Term Savings and Alternative Term Savings investments managed by Desjardins Financial Services Firm, and what was communicated to investors).
- Data breaches and confidentiality incidents (Desjardins data breach in 2019, for example).
- Breaches of contract that impact a large number of organizations.
Instances where organizations received compensation
1. Canadian class action against DRAM manufacturers
Electronic component manufacturers were accused of conspiring to fix the prices of computer memory (DRAM).
Following the class action rulings in Canada, close to $80 million was collected on behalf of the purchasers[1], which included several organizations that bought computers, servers and other computer equipment containing DRAM components.
2. Class action against Visa, Mastercard and certain Canadian banks
Canadian retailers alleged that Visa, Mastercard and several other financial institutions levied excessive interchange fees and restricted merchants’ ability to refuse certain credit cards or charge additional fees.
The approved settlement provided for total compensation of approximately CAD188 million for businesses that accepted Visa and Mastercard cards between 2001 and 2021.[2]
Conclusion
Class actions are not restricted to consumers. Businesses can also receive significant compensation where their rights have been infringed.
Therefore, business leaders should be aware of ongoing class actions. A relatively simple process can allow them to recover money that would otherwise be left on the table.
Class Action: How Are Members Notified?
Class members are alerted to major developments in a class action by notices to members, in particular when a class action is authorized, a settlement agreement is reached between the parties or a class action is won in court.
Registration or claim: what's the difference?
A registration and a claim are two different things. It is essential to distinguish between the two, because you could lose your right to compensation if you do not file a claim within the prescribed period, even if you were registered in the class action!