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What if you face a class action even though no one was harmed?

Author(s): Laura Fric, Robert Carson

Dec 11, 2023

In a new trend, plaintiffs are launching proposed class actions even though no person has suffered any meaningful harm from the alleged wrongdoing. Many industries have been targets of these kinds of actions. Notable examples include proposed class actions filed after a business notified its customers that a hacker had breached its IT systems, an auto manufacturer notified its customers that it was recalling airbags or Health Canada announced the recall of a medication. In these cases and others like them, the proposed class actions have been filed immediately after the announcement, regardless of whether the event caused any harm to customers. These actions present real risk to businesses operating in Canada who may be forced to deal with time consuming claims that have no merit.

There is, however, some positive news for the business community. Even before a class action is filed, businesses can take steps to strengthen their position in the face of an incident that could result in litigation. And there is more good news. In many recent cases, defendants have been able to persuade courts to end these cases at an early stage precisely because the plaintiff has not suffered compensable harm...

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