It’s business as usual for class actions after Canada’s Supreme Court issued a trilogy of decisions holding that so-called indirect purchasers can sue for damages caused by price fixing, and that whether indirect purchasers suffered harm can be certified as a common issue in a class action so long as the plaintiffs demonstrate a methodology capable of showing that price fixing overcharges were passed on to the indirect purchaser level.
Direct purchasers are purchasers who buy directly from the participants in a price fixing conspiracy. They pay more for the product than they would otherwise. Indirect purchasers are those purchasers who buy the product itself from the direct purchasers, or who buy products that include the product whose price was fixed. Some indirect purchasers, particularly consumers, may be at the end of a long line of intermediate purchasers. Indirect purchasers only suffer a loss if the purchasers above them in the distribution chain pass the overcharge on instead of absorbing it. Competitive factors at each level of the distribution chain will impact whether the overcharge is passed on at all, and in what amount.
Claims based on passing on raise a number of problems, however.
First, passing on as a defence has been rejected in a number of court decisions, culminating in the decisions of the Supreme Court in Canfor and Kingstreet. In the US, this same rejection of passing on as defence led the US Supreme Court to reject indirect purchaser claims, which are founded on passing on.
Read the full article in the Litigator.