Court Raises The Discoverability Bar For Private Attorneys General

Plaintiffs' counsel in civil Competition Act class actions often view themselves (and sometimes even refer to themselves) as 'private attorneys general' pursuing those whose conduct distorts the economic landscape. In what is certain to be seen as a controversial ruling, Justice Perell of the Ontario Superior Court has reminded plaintiffs' counsel that if they want to fulfill the role of a private attorney general, then they must act like one.1 The decision arises in the context of the massive ongoing futures exchange market ("FX Market") price fixing class action.

In June 2013, a report was published by Bloomberg News alleging that a group of currency traders had been front-running their clients' orders and rigging the foreign exchange benchmark rates. Regulatory investigations in the US, UK and EU were immediately launched and class action lawsuits followed. The Canadian class action was commenced in September 2015. Sixteen groups of financial institutions were named as defendants. It was alleged that the conspiracy spanned the period January 1, 2003 through December 31, 2013. Noticeably absent from the list of defendants were the Bank of Montreal and the Toronto-Dominion financial institutions, despite these institutions being known to be involved in the FX Market.

In May 2016, plaintiffs reached a settlement with the UBS defendants, subject to court approval being obtained. In accordance with the terms of the settlement, UBS provided an evidentiary proffer that allegedly implicated the Bank of Montreal and Toronto-Dominion institutions. In July 2016, plaintiffs moved to add these parties as defendants. Following lengthy delays, the plaintiffs' motion was heard in late November 2017. Plaintiffs took the position that they could not have "discovered" the involvement of the Bank of Montreal and Toronto-Dominion conspirators until the UBS proffer. Their affiant deposed that no public document had previously referred to these parties' alleged involvement in the conspiracy and that the May 2016 UBS proffer was the first occasion that they could have learned of their involvement. They refused, however, to divulge the details of this evidentiary proffer. The Bank of Montreal and Toronto-Dominion institutions took the position that the plaintiffs had failed to exercise reasonable diligence in their investigation. They did not dispute that there had been no public reference to their alleged involvement.

After reviewing the relevant limitation...