De Minimis Rule is Back in the Context of Class Actions

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De minimis non curat praetor — this ancient legal maxim suggests that judges should not have to hear trivial cases. The maxim seems to have lost most of its significance in the context of class actions. In several instances, class actions have been filed to claim damages for minor and transient inconveniences, under various heads of damages, such as “psychological injuries” or “trouble and inconvenience”.

That being said, in Sofio c. Organisme canadien de réglementation du commerce des valeurs mobilières, rendered on November 6, 2015, the Quebec Court of Appeal (Court) reiterated that petitioners must demonstrate the existence of tangible injury subject to monetary compensation to certify a class action.

CONTEXT

The class action arose out of the loss of a laptop computer by an employee of the Investment Industry Regulatory Organization of Canada. The computer contained personal information about clients of brokerage firms, including the petitioner. The latter filed a motion to authorize a class action claiming C$1,000 in compensatory damages payable to each class member for [translation]  “stress, inconvenience and measures made necessary” as a result of the loss of the computer. The motion to certify was dismissed in the first instance because the Superior Court of Quebec was of the opinion that the condition of a serious colour of right had not been met, hence the appeal.

REASONS FOR JUDGMENT

The Court dismissed the appeal on the grounds that the petitioner had failed to demonstrate tangible injury subject to monetary compensation.

De Minimis Injury Not Compensable

In the Court’s view, damages are not awarded based on the seriousness of the alleged fault, but rather of the resulting injury. A fault does not automatically cause injury. Such injury must be alleged, even at the certification stage.

In this case, the allegations did not reveal compensable injury, given that the petitioner did not specify the nature, extent or intensity of the stress he had allegedly suffered. Unless there is a minimum of facts demonstrating that the petitioner has actually sustained injury, the action does not meet the threshold of tangible injury subject to monetary compensation within the meaning of Mustapha v. Culligan of Canada Ltd. (Mustapha)

In Mustapha, a Supreme Court of Canada (SCC) decision rendered in 2008, the plaintiff claimed damages from the defendant, alleging that he had suffered mental injury as a result of seeing dead flies in a water bottle sold by the defendant. The trial judge held that seeing the flies in the water had resulted in psychological injuries to the plaintiff and awarded him C$342,000 under several heads of damages. The SCC overturned the judgment and dismissed the action on the grounds that psychological distress constituting compensable injury must be distinguished from simple upset. Compensable injury at law connotes serious trauma or illness rather than upset, disgust, anxiety, agitation or other mental states that fall short of injury and that people living in a society routinely accept, if sometimes reluctantly. The SCC concluded that, “[q]uite simply, minor and transient upsets do not constitute personal injury, and hence to do not amount to compensable injury.”

It is meaningful that the Court relied on the Mustapha judgment, an individual claim decided on the merits, as a basis for the analysis of a motion to authorize a class action. The Court further stated that class actions as a procedural vehicle [translation] “are not intended to allow lawsuits that should not be brought otherwise. Such actions require time the judges could otherwise devote to other parties; from a global perspective, they hinder access to justice and efficient use of judicial resources”. The Court thus implicitly referred to the principle of proportionality, according to which a lawsuit must be proportionate to what is at stake, which has become a guiding principle in Quebec civil procedure.

It is also interesting to note that, in the Court’s view, the court must consider the colour of right condition set out in Article 1003(b) of the Code of Civil Procedure in light of the petitioner’s individual claim. If the petitioner is unable to demonstrate that he himself has suffered compensable injury, the class action cannot be certified; the fact that one or several other members of the proposed class may have sustained such injury is irrelevant for that purpose.

CONCLUSION

This judgment is an example of the application of the de minimis rule to class actions, to the effect that insignificant or transient injuries are not subject to compensation when it comes to the analysis of the petitioner’s colour of right. The conditions established by the SCC in Mustapha to acknowledge compensable injury and the principle that a legal recourse must be proportionate to what is at stake are relevant conditions in this context. In addition, this judgment confirms the condition that the colour of right condition must be assessed based on the petitioner’s individual claim, meaning that potential injury to other class members is irrelevant in this respect.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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