Financial Post - Canada's telecom giants face $18-billion class action suit over system access fees

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An $18-billion class-action suit has received the go-ahead to proceed against Canada's Big Telecom companies. What’s the contested litigation? The long-imposed – but often vague – system access fees. Late last month, The Supreme Court of Canada rejected an appeal issued by Bell, Rogers and Telus (among others) that argued against the case.

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Article by Jamie Sturgeon for Financial Post

An old fee that’s made untold millions for the country’s big cellphone providers may now end up costing them billions, while wireless users everywhere could find a few bucks put back in their pocket.

The Supreme Court of Canada has refused an appeal by Rogers Communications Inc., BCE’s Bell Mobility and Telus Corp. and others, who were asking the top court to throw out a case over controversial “system access fees.”

The decision means a class-action suit originally filed in a Saskatchewan court in 2004 can proceed — with 30,000 people already having joined the case, according to lawyer Tony Merchant.

“The ultimate goal is, they were overcharging people, charging people wrongly and we want the money back,” said Mr. Merchant of Merchant Law Group and a lead lawyer in the action.

Mr. Merchant, whose firm has spearheaded high-profile cases in the past such as the 2008 Maple Leaf Foods class action over a Listeria outbreak, said the motion seeks $18-billion from the national carriers as well as regional providers SaskTel (Saskatchewan), MTS (Manitoba) and Bell Aliant (Eastern Canada) for “unjust enrichment” through the fees.

For years, mobile providers charged subscribers up to $9 a month for “access” to their network. The fees, sometimes labeled as administration costs, were charged on top of monthly usage rates and helped elevate Canadian cellphone bills to the highest per customer in the Organisation for Economic Co-operation and Development by 2009.

The carriers, who have defended the charges as a means to maintain investment in their networks, moved to phase them out as new competitors like Wind Mobile and Mobilicity prepared to enter the market offering flat-rate plans that charged nothing for network access.

Last November, the Saskatchewan Court of Appeal struck down a motion from the carriers to have the suit dismissed, supporting in its decision previous rulings that said the “legitimacy” of the fees could be questioned. A three-member panel of justices also said the notion of “unjust enrichment” was strong enough to carry a class-action suit against the companies.

The Supreme Court’s rejection of the carrier’s latest attempt at dismissing the case Thursday clears the way for Merchant to proceed to a trial at the Saskatchewan Court of Queen’s Bench.

Merchant’s claim also includes complaints the fees were not adequately disclosed to customers.

“It’s about this money for consumers but it’s also advertising and communication from businesses that’s fair and done properly. It’s not supposed to misdirect people,” Mr. Merchant said.

The statement of claim lists “All residents of Canada who have purchased wireless services from any of the defendants since April 1, 1987” as being eligible to participate. Read more »

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