Canada Court Says Settlement Approval Orders Can’t Be Appealed

The Ontario Court of Appeal has determined that Canadian Class Members cannot appeal settlement approval orders.

This new ruling has implications for class action lawsuits going forward and marks a contrast to Canada’s Class Proceedings Act, which allowed Class Members to file an appeal.

The decision was made on Oct. 17, 2019, by a five-judge panel, in the class action lawsuit Bancroft-Snell v. Visa Canada Corporation.

In the Visa class action lawsuit, customers claimed that Visa Canada Corp. and Mastercard International Inc. had conspired to fix prices for merchant discount fees.

The Visa price-fixing class action lawsuit was resolved through an extended settlement process. A partial settlement deal was reached in November 2015 and June 2016, and further partial settlements in January 2018 and September 2018. Home Depot and Wal-mart Canada Corp., two Class Members in the Visa price-fixing class action lawsuit, who were allegedly negatively affected by the price-fixing scheme, appealed the settlement, objecting to being obligated to participate in it. 

Justice Perell approved the settlement despite the protests of Home Depot and Walmart, after defendants Visa and Mastercard said that Home Depot and Walmart did not have grounds to appeal the settlement approval.

Under Canada’s Class Proceedings Act, Class Members can object to a class action lawsuit during litigation, or can do so when a settlement comes to a court for approval. Chief Justice Strathy, in the five justice panel, wrote a judgement on his decision, acknowledging the existing law, but denying the two companies’ an appeal nonetheless.

In denying the approval, Judge Strathy stressed that two benefits of class action settlements are efficiency and certainty, and said that to appeal the settlement would undermine these benefits, causing the settlement process to drag out. 

Though this broadly benefits defendants, in turn, it can have consequences for Class Members. Per this decision, Class Members now have fewer recourses to opt out to the settlement deal and pursue their own litigation.

The justices note that pursuing class action litigation exposes plaintiffs to less risk than if they had pursued independent litigation, noting that with this decreased risk, comes a decreased ability to object to the settlement established during class action litigation. 

Now, the judges have the final decision on if an appeal of a settlement can go through, though the Class Proceedings Act says that Class Members have more rights in the area of flexibility and appeals during the settlement process. 

However, this new decision may benefit Class Members who would otherwise have to wait for other members of the Class to appeal the settlement, possibly breaking down barriers for Class Members to get compensation. 

What do you think of the recent Canada class action ruling? Let us know in the comments below.

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