In last week's post, we highlighted the trend in favour of certification of undisclosed fees class actions which was recently continued by the British Columbia Court of Appeal's decision in Finkel v. Coast Capital Savings Credit Union. This week, we summarize the Court's potentially novel interpretation of the types of claims permitted under British Columbia's consumer protection legislation.
The bulk of the Court of Appeal's analysis considered the adequacy of the pleadings and, in particular, the claim for relief under section 171 of the Business Practices and Consumer Protection Act ("BPCPA"). This provision creates a statutory cause of action for consumers to recover pecuniary loss caused by deceptive acts and practices that are committed by suppliers. It requires a plaintiff to establish that she has suffered damage or loss "due to" a contravention of the BPCPA.
The plaintiff in Finkel advances a very broad and novel interpretation of section 171, asserting that the fact of a contractual breach is sufficient to link a statutory breach to a plaintiff's loss. Coast Capital, in appealing the certification decision, argued that it was plain and obvious that such a claim would not succeed. According to Coast Capital's argument, reliance on an alleged misrepresentation is a necessary element of the cause of action under section 171 of the BPCPA, as it is required to prove causation of damage or loss.
The Court of Appeal disagreed, emphasizing that reliance and causation are not independent requirements. Rather, the reason for insistence on reliance in past case law is to prove causation. Accordingly, if a breach of duty can be adequately linked to a loss by alternate means, individual reliance need not be shown. Where, as in Finkel, a deceptive act or practice is allegedly committed in the context of a direct contractual relationship and involves a breach of a contractual term and related loss, the Court of Appeal held it is arguable that the fact of the contractual breach sufficiently links the statutory breach to the loss for the purposes of causation under section 171 of the BPCPA.
The Takeaway: The Finkel decision continues the trend in favour of certification of actions for undisclosed fees. It also appears to leave the door open, at least until the issue is decided on its merits, for plaintiffs to advance claims for certain breaches of the BPCPA without needing to establish individual reliance in every case. This could potentially have further ramifications for cases brought under consumer protection legislation in other provinces (such as the Ontario Consumer Protection Act, 2002) that provide for similar relief.
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