Have A Contract In Canada? Your Class Action Risk Is Greater Than You May Think

Non-Canadian companies: welcome to the Canadian class action party. In recent years, Canadians have increasingly begun to recognize and actively manage the major business risk posed by class actions, as more and more businesses have found themselves facing class actions in Canadian jurisdictions. But that growing risk does not stop at the Canadian border. Companies that do business in Canada—or even that simply have a contract formed in Canada or some other Canadian connection—should know that they can now be dragged into a Canadian class action in circumstances that might surprise them.

Traditionally, courts could assert jurisdiction over foreign defendants only if they were present in or had consented to the relevant jurisdiction. In a sharp break from the traditional rules, Canadian courts have come to recognize a third basis for asserting jurisdiction where there is a "real and substantial connection" between a dispute and the province the courts of which are