The Power of Perspectives

The Canadian Bar Association

Yves Faguy

Bank of Montreal v. Marcotte: Reactions

September 26 2014 26 September 2014

Last week the Supreme Copurt rendered its trilogy of decisions, most notably Bank of Montreal v. Marcotte, in which it ruled that that provincial consumer protection legislation applies to federally-regulated banks and credit card issuers. Kevin Kiley boils it down:

The decisions increase the sphere of provincial legislation that could apply to federally regulated financial institutions, give the provinces greater scope in consumer protection, and send financial institutions a strong message about consumer protection in the context of credit.

David Neave and Rebecca von Rüti argue the decision will have wider implications:

The Marcotte decision will likely apply to several other federally-regulated areas, outside of banking. It is anticipated that plaintiffs will attempt to expand the Court’s ruling in Marcotte to support provincial consumer protection act class action claims not only against banks but also against other federally-regulated businesses in Quebec and the other provinces. As in Marcotte, constitutional arguments may be ineffective to immunize those types of businesses from such claims.

Dawn Jetten, Jeff Galway, Elizabeth Sale, and Preston MacNeil take a wait-and-see approach:

The Supreme Court decision does not go so far as to foreclose the paramountcy argument being raised in future cases in respect of other provincial consumer protection provisions. The Supreme Court noted that where a provincial requirement conflicts with a Bank Act provision, the result may be operational conflict or an undermining of the purpose underlying the Bank Act. Examples given by the Supreme Court of where the paramountcy doctrine might come into play are if a province provided for a different grace period or a different method of interest computation or disclosure from that provided under the Bank Act.

Time is required to fully assess the impact of the Supreme Court’s decision on the way banks and other federally regulated entities must conduct business across the country. Based on this decision, however, going forward the challenge will be to identify with certainty when compliance with provincial law by a federally regulated entity is not required.

Léonid Sirota would have liked the Court to offer a better “blueprint” for the general rule applicable here:

In effect, it seems to suggest that complementary provincial requirements will not conflict with or frustrate the purpose of federal regulations, although parallel (and non-identical) provincial rules might do so. I think that this makes sense, and it is also a more easily applicable standard than what the Court has come up with on interjurisdictional immunity. Still, the Court doesn’t quite articulate this test. Its reasons do not openly go beyond the case before it. So even here, we can only infer the general rules.

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