What happened: A Quebec court has authorized a class action against Yellow Pages Ltd. (TSX:Y) over the terms of its contracts.
Why it matters: While the case specifics are only relevant in Quebec, small business owners across Canada have complained about Yellow Pages’ business practices, which will be under scrutiny.
A Quebec court has authorized a class action lawsuit against Yellow Pages Ltd. (TSX:Y).
Several thousand Yellow Pages clients are expected to seek damages from the company over its commercial practices and billing policy, which the plaintiffs’ lawyer argues violate Quebec law.
“It’s exciting. We’re realizing more and more that the class might even be bigger than we thought at first,” said Jean-Philippe Caron, founder of Calex Legal Inc., which is bringing the class action forward.
In Quebec, individuals have the legal right to unilaterally terminate certain services contracts before their term, no matter their reason.
Yellow Pages contracts in the province ask clients to renounce that right when signing up for services. The contracts also state that clients do not have the ability to terminate their contract unilaterally.
In its decision to authorize the class action, the court noted that these contracts were ambiguous in their ask of clients to renounce their rights.
“We got every single conclusion we were asking for,” said Caron. He added that he is expecting between 2,000 and 3,000 individuals and businesses to sign on to the suit.
Yellow Pages' vice-president, secretary and general counsel says the claims are unfounded.
“We are aware of the class action, we believe the allegations of the plaintiff are unfounded and that we will be vigorously opposing them. This said, we cannot comment further on an ongoing legal proceeding," stated Treena Cooper in an email to BIV.
She added that the company is committed to serving its customers.
The action is open to any individual or corporation in Quebec who tried to cancel their service contract with Yellow Pages after June 8, 2015, and were refused the right to terminate it.
In January, Business in Vancouver reported that hundreds of small business owners across Canada had complained about Yellow Pages’ corporate practices. The company has also been involved in hundreds of lawsuits. Caron said more than 1,300 cases have been filed in the Court of Quebec over the last three years.
At the time, his firm had identified between 600 and 700 individuals whose legal cases had been surrendered by default because those individuals had failed to respond to Yellow Pages’ claims.
“We’re going to get a fair compensation for the little companies that got often trapped in a contract they didn’t understand," Caron told BIV back in January.
The class action submission highlights the story of Quebec-based renovation company Toitures T.B. Boyer Inc.
Toitures Boyer claims it tried to cancel its $8,250-per-month contract with Yellow Pages in March 2017. The company also claims Yellow Pages denied its right to do so unless it could prove Yellow Pages was not meeting its contractual obligations.
Yellow Pages eventually considered Toitures Boyer to be in default, and sent the company a legal claim for nearly $46,000 in March 2018, according to court documents.
Caron says his firm is aiming to finish preparing the class action for trial by the end of 2020. It would then look to secure a trial date in 2021, or sooner if possible.
This story was updated to include a comment from Yellow Pages.