Court of Appeal Adds Banks to FX Price Fixing Class Action
June 27th, 2018
In overturning a lower court decision, the Ontario Court of Appeal ruled that TD Bank and BMO would be added as defendants in a price fixing class action against major banks.
The case was Mancinelli v. Royal Bank of Canada. The plaintiffs brought the proposed class action in 2015 against sixteen major banks, alleging the banks conspired to fix prices in the foreign exchange market by engaging in secret internet chats.
In 2016, the plaintiffs moved to add TD Bank and BMO as defendants. The plaintiffs’ basis for adding the new defendants was that they first learned of TD Bank and BMO’s involvement in the alleged conspiracy from another, settling defendant that was cooperating with the plaintiffs.
The lower court dismissed the motion to add the new defendants. Even though the lower court accepted the plaintiffs did not know they had claims against TD Bank and BMO until they obtained the evidence from the cooperating defendant, it nevertheless held the plaintiffs should have done more to investigate their claims and identify the parties to name as defendants.
The Court of Appeal overturned the lower court and confirmed the discoverability principle applies to the Competition Act. The question was whether the plaintiffs had a reasonable explanation on proper evidence as to why they could not have discovered their claims against TD Bank and BMO by the limitation date through the exercise of reasonable diligence.
The Court of Appeal held the lower court should have permitted the plaintiffs to add TD Bank and BMO as defendants. It reasoned that on a motion to add defendants in an action alleging a secret conspiracy, evidence of the plaintiffs’ due diligence that essentially consisted of reviewing publicly available documents was sufficient.
The appeal decision reaffirms the low bar plaintiffs must meet to identify and bring claims within the limitation period in actions alleging secret conduct that was concealed by the defendants.