A study by NERA Economic Consulting released July 22, 2014 shows that consumer class action settlements in the US have increased steadily over the past four years (the “Study Period”).  The study also showed that cases relating to privacy violations, specifically cases relating to SPAM and to improper use of personal information, increased significantly over the Study Period.

Additional description of the study and a link to the text of the study are available HERE.

More headlines from the study include:

  • The banking and finance sector had the most cases settled during the Study Period;
  • The banking and finance sector had approximately half the settlement dollars over the Study Period;
  • Over half of the total settlement dollars during the Study Period related to competition (antitrust) cases; and
  • Only approximately 10% of settlement dollars during the Study Period related to the motor vehicle industry.

Implications for Canadian Class Action Litigants? 

Historically, it was often the case that US class action trends were echoed in Canada.  However, there been a divergence between Canadian and US class action law over the past few years, with more barriers to certification being seen in the US and fewer barriers in Canada.  See, for example, a recent article noting such an apparent trend HERE and a recent McCarthy Tétrault blog post HERE.  As a result the different legal trends between the two countries, Canadian settlement trends may well not echo the US experience.

However, the increase in privacy class actions seen in the US is likely to be echoed in Canada.  The data breach and SPAM issues noted by NERA as the frequent subjects of such cases are seen on both sides of the border, often involving companies with a presence on both sides of the border.  The overall consumer focus on privacy is also similar on both sides of the border. Indeed, the arguably lower bar to certification in Canada may mean that the increase in such cases in Canada is even greater than that seen in the US over the Study Period.