Ontario Superior Court Narrows Foreign Exchange Class Action

Published date02 June 2020
AuthorMr Ranjan Agarwal, Emrys C. Davis, Alexander C. Payne and Tim Heneghan
Subject MatterLitigation, Mediation & Arbitration, Class Actions, Trials & Appeals & Compensation
Law FirmBennett Jones LLP

The Ontario Superior Court's recent decision granting certification in a foreign exchange price-fixing class action (Mancinelli v. Royal Bank of Canada, 2020 ONSC 1646) reminds counsel and stakeholders of: (a) the relatively low threshold for class action certification in Ontario, and (b) the Court's significant discretion to narrow or alter a proposed class.


The plaintiffs commenced a wide-ranging claim against 18 groups of financial institution defendants. The plaintiffs alleged that over 11 years the defendants had engaged in a conspiracy to fix prices of currency traded on the foreign exchange market. By the time the court heard the certification motion, 14 of the 18 defendants had settled.

The plaintiffs alleged that, in order to carry out the conspiracy, dealers within the defendant financial institutions communicated from time to time by chatrooms named "The Cartel" and "The Bandits' Club" to coordinate prices offered to individual customers and manipulate benchmark exchange rates. As a result, the plaintiffs alleged that this conduct impacted the prices of various FX instruments bought directly or indirectly by the plaintiffs, causing substantial losses.

Analysis and Takeaways

The approach taken and principles applied by Justice Paul Perell, the Certification Judge, largely confirmed existing jurisprudence. That said, the "episodic" nature of the alleged conduct raised novel issues and distinguished aspects of the conduct here from a typical price-fixing class action, where the conspiracy is usually alleged to have affected all prices over the class period, and not to have had episodic effects on certain transactions.

Justice Perell considered the episodic nature of the conduct and its impact on certification at various stages of the analysis, including:

  1. whether the plaintiffs' pleading discloses a cause of action;
  2. whether there is an identifiable class;
  3. whether there are common issues as between class members and
  4. whether a class action is the preferable procedure.

Ultimately, the unique features of foreign exchange transactions and the alleged price-fixing of such transactions were an important consideration underlying the Court's refusal to certify the claims of certain categories of proposed class members.

1. The Cause of Action Criterion is a "Molehill", not a Mountain

To succeed on the cause of action criterion, Justice Perell said that the plaintiffs "need only climb over the molehill of the plain and obvious standard".


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